Jeff Yan, founder of the Hyperliquid blockchain, said that some centralized exchanges (CEXs) deliberately underreport liquidations by hundreds of times, creating the illusion of stability during market turmoil.

“Some CEXs publicly document that they dramatically underreport user liquidations. For example on Binance, even if there are thousands of liquidation orders in the same second, only one is reported. Because liquidations happen in bursts, this could easily be 100x under-reporting under some conditions,” he said.

According to the developer, the real number of liquidations on CEX is much higher than the market sees, but it is almost impossible to verify the accuracy of this data due to the lack of online transparency.

He emphasized that the Hyperliquid model is radically different, as every order, trade, and liquidation is executed directly on the blockchain:

“Hyperliquid is a blockchain where every order, trade, and liquidation happens onchain. Anyone can permissionlessly verify the chain’s execution, including all liquidations and their fair execution for all users. Furthermore, anyone can verify the solvency of the entire system in real time.”

He also added that transparency and neutrality are key principles that should underpin the new financial system:

“Hopefully the industry will see transparency and neutrality as important features of the new financial system, and others will follow.”

The statement came after a large-scale market collapse on the night of October 10-11, 2025, which resulted in record liquidations of futures positions of more than $19 billion per day.

Hyperliquid accounted for the largest share — $10.3 billion, making it the platform with the highest liquidation volume of any exchange. It also had the largest single liquidation, with a trader losing over $203 million.

Amid the market crash, the founder of Hyperliquid stressed that it is the complete online transparency that allows avoiding manipulations and seeing the exact scale of events:

“Hyperliquid’s fully onchain liquidations cannot be compared with underreported CEX liquidations.“

The expert noted that such openness could become an important competitive advantage of decentralized platforms over centralized exchanges, which are increasingly facing accusations of data distortion.

As a reminder, more than 1,000 Hyperliquid users lost all their funds, and the total losses exceeded $1.23 billion. At least 205 traders lost more than $1 million, and four large accounts lost between $13 million and $18 million each.