Decentralized exchange Hyperliquid has delisted the Solana-based meme coin JELLYJELLY to prevent a liquidation crisis. This decision followed a user opening a $6 million leveraged short position, which became problematic as JELLYJELLY's price rose sharply. In reaction to suspected market manipulation, Hyperliquid's validators voted to remove JELLYJELLY perpetual contracts. Although the validators asserted that this was necessary for network integrity, the move drew criticism for conflicting with decentralized finance principles. Users who held JELLYJELLY positions will be compensated by the Hyperliquid Foundation. The market reaction saw JELLYJELLY's price increase significantly even after the delisting. Previous events involving liquidations on Hyperliquid raised concerns about its governance and centralization, leading industry figures to question the decentralization status of the platform. This situation underscores ongoing challenges faced by decentralized exchanges amidst high liquidity and leveraged trading.

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