Hyperliquid Co-founder: ADL does not transfer profits and losses to HLP, denies the claim that "ADL destroyed $653 million in profits"

According to TechFlow, on December 10, Hyperliquid co-founder Jeff responded on social media to an academic paper questioning the platform’s automatic deleveraging (ADL) mechanism.

Jeff stated that the author of the paper fundamentally misunderstood the ADL mechanism, emphasizing that “ADL does not transfer profits or losses to the HLP,” but instead treats both HLP and users in a completely symmetrical manner. He made it clear that “ADL has nothing to do with HLP or backup liquidation.”

In response to the paper’s claim that “ADL destroyed $653 million in profits,” Jeff refuted this, considering it a misunderstanding of the mechanism. He criticized the author for using “fancy machine learning terms” to cover up falsehoods without understanding the definitions of the subject being studied, and expressed disappointment in these so-called “scholars” who are respected in the industry.