Gate's market intelligence team reports that on August 27, Hyperliquid issued an official statement via its Discord channel regarding the significant volatility observed in the XPL market. The marked price of XPL experienced a rapid increase, approximately 2.5-fold, within a matter of minutes.

Throughout this turbulent period, the Hyperliquid blockchain demonstrated its robustness by functioning as intended, without encountering any technical difficulties. The protocol followed its predetermined sequence of operations: first executing liquidations based on the order book, followed by the activation of the Automatic Deleveraging (ADL) mechanism in accordance with the publicly available protocol guidelines.

It's worth noting that Hyperp employs a fully isolated margin system. This design ensures that the profits and losses of individual users remain separate from other asset positions. Consequently, the liquidation and ADL processes were confined to XPL positions, with the protocol avoiding any accumulation of bad debts.

The nature of pre-listing markets inherently involves a degree of unpredictability. Hyperp's implementation of a sophisticated marked price formula serves as an effective deterrent against instantaneous price surges. This mechanism necessitates the order book price to maintain an elevated level for an extended period, typically several minutes, before initiating any liquidation procedures.

Hyperliquid operates as a permissionless multi-market protocol, with each market exhibiting its own unique risk profile. The platform strongly encourages users to thoroughly familiarize themselves with the operational intricacies of markets such as Hyperp. This can be achieved by carefully studying the available documentation and implementing appropriate risk management strategies prior to engaging in any trading activities.

All Hyperp products come with explicit risk warnings, alerting users to potential challenges such as low liquidity, high volatility, and increased liquidation risks. These cautionary notices underscore the importance of informed decision-making in the cryptocurrency trading landscape.

In response to user feedback expressing interest in short positions with high collateral, Hyperliquid has announced plans for an upcoming network upgrade. Post-upgrade, Hyperp's marked price will be constrained within a range of 10 times the 8-hour marked price Exponential Moving Average (EMA). While this condition has not come close to being triggered historically, it establishes a mathematical boundary for the liquidation price of over-collateralized short positions.

The 8-hour EMA has been made publicly accessible as the oracle price for Hyperp, both on-chain and through the API. It's important to clarify that this planned upgrade will not retroactively alter any liquidation or ADL outcomes from the recent market event. Instead, it aims to incentivize liquidity provision during periods of heightened volatility.

Hyperliquid acknowledges that different user suggestions come with their own set of risk factors. The platform maintains that the optimal solution lies in attracting more liquidity to these markets, thereby mitigating the impact of volatility.

As the cryptocurrency landscape continues to evolve, platforms like Hyperliquid demonstrate their commitment to maintaining market integrity while adapting to user needs. Traders are reminded to exercise caution and conduct thorough research when participating in these dynamic markets.