Hyperliquid SKHX flash crash liquidated three addresses for $4.73M while three others captured $6.96M via ADL at $931.36 lows after SK Hynix error.

According to the source, a venue-specific glitch reportedly printed BTC at 0 on Paradex, triggering mass liquidations on its derivatives market (source: source post on X dated 2026-01-19). Liquidations on most perpetual swaps are driven by mark price rather than last traded price, but disruptions in index or mark price inputs can still cause forced unwinds (source: Binance Futures Mark Price documentation: https://www.binance.com/en/support/faq/what-is-mark-price-and-last-price-360033376131). Index prices typically aggregate multiple exchanges or oracle feeds, so anomalies in a venue’s feed or index construction can propagate if the reference deviates materially (source: Chainlink Price Feeds overview: https://docs.chain.link/data-feeds/price-feeds). Losses from extreme events may be absorbed by insurance funds or trigger auto-deleveraging on some venues, which can impact opposing positions even if they are in profit (source: Binance Auto-Deleveraging documentation: https://www.binance.com/en/support/faq/auto-deleveraging-adl-7da66618b1464bfab096250fab31f4c7; dYdX Risk and Liquidations overview: https://docs.dydx.exchange). For risk management under venue stress, traders commonly reduce leverage, monitor funding and basis, and consider hedging via spot or options on deeper-liquidity venues (source: Binance Futures Trading Rules and risk guidance: https://www.binance.com/en/support/faq/360033161972; Deribit Risk Management documentation: https://docs.deribit.com).

According to @AveryChing, public-source ADL code on decentralized perpetuals exchanges lets traders know exactly how forced deleveraging will execute, with code-as-documentation and formal verification enabling solvency proofs that centralized exchanges cannot match. Source: https://twitter.com/AveryChing/status/1999009962941632833 Tarun Chitra stated that decentralized perpetuals exchanges should publish verifiable ADL policies and said Hyperliquid’s ADL is not public. Source: https://x.com/tarunchitra/status/1998985138789838914 This transparency directly reduces uncertainty around liquidation events and solvency for perp DEX participants, making ADL policy disclosure a trading-relevant exchange selection factor, per @AveryChing. Source: https://twitter.com/AveryChing/status/1999009962941632833