TL;DR
- Hyperliquid halted trading for 37 minutes after API servers collapsed under extreme traffic, causing $9 price divergences and trapped positions.
- BasedApp and leveraged traders faced liquidation risks, but HyperEVM’s blockchain remained operational throughout the front-end failure.
- New safeguards include AI traffic throttling, multi-region API redundancy, and emergency node routing to prevent recurrence.
Hyperliquid’s DEX faced a critical 37-minute trading halt on July 29 when unprecedented traffic volumes overwhelmed its API infrastructure. The disruption began at 14:10 UTC, freezing order execution across the platform despite its HyperEVM blockchain maintaining full operational status.
Traders reported failed transactions and growing price divergences reaching $9 compared to broader markets, creating liquidation risks for exposed positions. The DEX’s status page confirmed the “major outage” stemmed solely from traffic spikes, not security breaches, with services restored by 14:47 UTC after emergency interventions.
Good news: orders have resumed sending on Hyperliquid https://t.co/8vjr76UlNs
— Luke Cannon (@lukecannon727) July 29, 2025
Traffic Tsunami Cripples API Infrastructure
A sudden demand surge paralyzed Hyperliquid’s order-routing API layer when transaction volumes exceeded fail-safe thresholds. For 37 minutes, orders couldn’t reach validation nodes despite HyperEVM’s underlying chain processing 8,000+ TPS uninterrupted. Preceding the crash, negative funding rates signaled system stress as traders leveraged volatile markets.
“This exposed a front-end scalability bottleneck, not chain vulnerabilities,” developers acknowledged that Hyperliquid’s main proof-of-stake mechanics stayed intact all along.
Trader Chaos and Market Dislocations
Discord channels flooded with user complaints as market gaps widened to $9, trapping traders unable to close positions. The outage cascaded to BasedApp, a Hyperliquid-powered trading interface backed by Delphi, Hashed, and Spartan, where order placement froze completely.
“We’re investigating,” Hyperliquid’s team initially responded, later attributing the chaos to API server overload rather than malicious activity. Price discrepancies persisted until systems stabilized, preventing at least $2.1M in planned liquidations according to blockchain analysts.
Scalability Upgrades and Node-Level Safeguards
Post-incident, Hyperliquid is deploying multi-layered failover protocols:
- Dynamic Traffic Throttling: AI-driven volume detection to reroute orders during demand spikes.
- API Redundancy Clusters: Backups from servers in multiple regions prevent single points of failure.
- Priority Node Routing: Bypassing API during crises to maintain 0.2-second execution speeds.
- These upgrades preserve Hyperliquid’s low-fee advantage while accommodating 300%+ volume surges common in derivatives markets.
HYPE Token Weathers Systemic Stress Test
Hyperliquid’s native token (HYPE) fell by 3.75% to $42.59 during a major disruption. At the time of writing, the token continues its downward trend, trading at around $42 and dropping more than 5%. This strength demonstrates the market’s trust in Hyperliquid’s clear response to the crisis and the consistent transaction throughput of HyperEVM.
As the #2 leveraged futures DEX by volume, its swift infrastructure overhaul signals a commitment to institutional-grade reliability despite front-end growing pains.
