Hyperliquid Founder Criticizes Underreporting of Liquidations by Major Centralized Exchanges
The founder of Hyperliquid, a leading decentralized perpetuals platform, has ignited debate in the crypto industry later than accusing major centralized platforms (CEXs) like Binance of underreporting liquidation data during high-volatility events. The comments have amplified ongoing concerns around market transparency, fairness, and the contrasting operational models of decentralized versus centralized trading platforms.
Jeff Yan, the founder of Hyperliquid, shared his criticism on social media, alleging that certain centralized platforms only display a small fraction of the total liquidations that occur during major price swings. He cited Binance as a specific example, claiming the platform reports only one liquidation per second, even when thousands may happen simultaneously. Yan emphasized that this lack of visibility misleads traders about the real extent of market stress and risk exposure.
Growing transparency gap between DEXs and CEXs
In contrast to centralized platforms, decentralized platforms like Hyperliquid provide full on-chain visibility into liquidations, funding rates, and open positions. Every trade and liquidation is publicly verifiable, ensuring that traders can independently confirm how markets behave in real time. According to Yan, this transparency is a core advantage of on-chain execution and a major reason traders are shifting to decentralized derivatives platforms.
“When platforms hide the true scale of liquidations, they distort how traders perceive volatility,” Yan said. “Hyperliquid is built on transparency – anyone can view exactly what happens, when it happens, and to what extent.”
The remarks came amid a wave of forced liquidations across the crypto market, as volatile price swings triggered billions in positions being closed. Data aggregators such as Coinglass and Laevitas reported over $1 billion in liquidations within 24 hours, though on-chain data from decentralized platforms showed even higher real-time volumes.
While Binance has yet to issue an official statement regarding the allegations, several CEX industry voices have defended the practice of rate-limiting liquidation updates. They argue that these technical limits prevent server overload and API congestion during peak activity. Some also maintain that displaying aggregated liquidation data instead of every individual event offers a cleaner user interface without compromising overall transparency.
Analysts, however, suggest that such explanations fail to address the core issue of trust. By filtering or delaying liquidation reports, centralized platforms may unintentionally obscure systemic risks and prevent traders from understanding market dynamics in real time.
Implications for the future of on-chain trading
The controversy has reignited discussions around the benefits of on-chain execution and verifiable market data. As regulatory scrutiny intensifies and traders demand more accountability, decentralized platforms like Hyperliquid are positioning themselves as transparent alternatives to their centralized counterparts.
Industry experts believe that this debate could accelerate the shift toward verifiable trading infrastructure, where all liquidations and order flows are recorded on-chain. As Yan noted, “Transparency isn’t just a feature – it’s the foundation of fair markets.”
With more traders prioritizing trust and visibility, the ongoing clash between CEX opacity and DEX transparency may define the next major shift in crypto market structure, pushing the industry toward a new standard of real-time, verifiable data integrity.
