Hyperliquid founder Jeff Yan has recently criticized the lack of transparency around centralized exchange (CEX) liquidation reporting, contrasting it with Hyperliquid’s model.
These remarks come after one of the largest liquidation events in crypto history, which affected over 1.6 million traders. The incident has sparked a broader conversation about fairness and accountability in crypto trading.
Yan pointed out that the difference between centralized and decentralized systems is significant.
He said some CEXs openly admit to dramatically underreporting user liquidations. He cited Binance’s example saying, even if thousands of liquidation orders occur in the same second, only one might be actually reported. As these liquidations often happen in bursts, he notes that this can lead to underreporting by 100x easily in certain conditions.
He hopes that the industry sees transparency and neutrality as key parts of the new financial system, and encouraged others to follow Hyperliquid’s lead.
“Hyperliquid’s fully onchain liquidations cannot be compared with underreported CEX liquidations,” Yan said.
Hyperliquid is a blockchain where every order, trade and liquidation happens fully onchain. Anyone can verify how the chain executes, confirm every liquidation and even check the solvency of the entire system in real time.
Yan believes that transparency and neutrality are what make decentralized finance (DeFi) the right foundation for the future of global finance.
One trader suggested that exchanges should add a type of false wick liquidation protection to better safeguard users. They praised Hyperliquid’s transparent system but said additional protections are needed to prevent traders from suffering unexpected losses during volatile periods.
Community members also urged users to move away from CEXs and called for more transparency and honesty in financial systems.
Notably, Coinglass also praised Hyperliquid for improving transparency in industry data and expressed hope that other platforms and institutions will follow their example.
Binance founder Changpeng Zhao (CZ) responded indirectly to Yan’s comments.
“Some people ask why BNB is so strong. While others tried to ignore, hide, shift blame, or attack competitors, the key @BNBChain ecosystem players (Binance, Venus, and more) put hundreds of millions of their own money on the line to protect users,” he said.
He ended his post by saying “different value systems,” which many saw as a quiet dig at Hyperliquid.
The discussion followed a major market crash that shook the crypto sector. Over 1.6 million traders were liquidated, resulting in a $19B wipeout. During this period, Hyperliquid recorded the highest liquidation volume at $10.31 billion, followed by Bybit and Binance.
Despite extreme volatility, Hyperliquid maintained 100% uptime and reported zero bad debt, highlighting the strength of its on-chain infrastructure.
This critique highlights how transparency and accountability cannot be optional.
On DeFi platforms like Hyperliquid, every trade, liquidation, and position is publicly visible on-chain, giving traders a clear, real-time view of the market. Centralized exchanges, however, reportedly keep much of this data hidden, leaving traders in the dark at critical times.
Experts are now calling for clearer rules and better accountability, urging all exchanges to provide transparent, verifiable data to protect traders.
Critics allege some major CEXs dramatically underreport liquidations, sometimes by 100x, by counting burst liquidations as a single event, hiding true market risk.
During the major crash, Hyperliquid had the highest liquidation volume at over $10B, but highlighted its 100% uptime and zero bad debt due to its on-chain model.
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