From crypto whale James Wynn to market manipulation, unraveling the opportunities and concerns of on-chain contract Hyperliquid

Written by: Lawrence, Mars Finance

Hyperliquid: The new overlord of on-chain liquidity

May 2025, the crypto market ushered in a new round of market breakthroughs, with Bitcoin breaking through the $110,000 mark and Ethereum standing at $2,600.

The rise of Hyperliquid is not accidental. Its average daily trading volume accounts for more than 70%, and the 7-day trading volume has increased by 46%, far exceeding similar platforms.

Behind this phenomenon is the extreme pursuit of high leverage, low fees and transparency by giant whales. Take James Wynn, a well-known trader, for example, who recently opened a long position of $568 million in bitcoin on Hyperliquid with 40x leverage, which directly pushed the BTC price above the psychological barrier of $100,000, which is almost impossible to achieve in traditional CEXs. Hyperliquid's "on-chain CEX" feature – a combination of decentralized transparency and centralized leverage – makes it an excellent arena for whale games.

Whale Hunting Logic: From Position Game to Market Sentiment ManipulationIn

Hyperliquid's ecosystem, Whale's profit model has evolved beyond simple long and short trading, and has evolved into a combination of "attention economy" and "psychological warfare".

Taking James Wynn as an example, his trading strategy presents three characteristics: high leverage (40 times), large positions (hundreds of millions of dollars), and open orders. By taking open positions, he not only attracts follow-up funds to push up the price of the underlying asset, but also amplifies market sentiment through social media, forming a positive feedback loop of "position-sentiment-price". For example, its continued shouting of "$100,000 is still undervalued" for bitcoin directly led to a large number of retail investors following the trend and further consolidating the bullish trend.

This strategy is not an isolated case. Previously, another Hyperliquid whale @qwatio had made a precise bet on the Federal Reserve's interest rate decision with 50 times leverage, making a profit of more than $9 million in a single day.

Although on-chain detective ZachXBT revealed that his real identity is British fraudster William Parker, this has not diminished its market presence. Such cases reveal a harsh reality: in the on-chain contract market, the "legitimacy" and "profitability" of whales are often decoupled, and the market is more focused on the outcome than the means.

What is even more alarming is that the on-chain operation of giant whales has derived new market manipulation methods. For example, by withdrawing unrealized profits to reduce margin, the platform's liquidation mechanism can be induced to take over the position, thereby transferring the risk to a liquidity pool (such as HLP Vault). In the March 2025 Hyperliquid liquidation event, a giant whale made a profit of $1.86 million through this method, while the platform's liquidity pool lost $4 million. This "in-rule arbitrage" exposed risk management loopholes in on-chain contracts, and also forced Hyperliquid to urgently reduce leverage (BTC to 40x, ETH to 25x) and improve the margin system.

Meme Coins and Leverage: The "Double-edged Sword" of Giant WhalesIn

the Hyperliquid ecosystem, the combination of Meme Coins and high-leverage contracts has become another powerful tool for Giant Whales to harvest liquidity. James Wynn's rise is closely related to the meme coin: in 2023, he bet on PEPE with a stake of $7,000 and ended up making a profit of more than $25 million;