Small Weird Failures That Are Eating Your Lunch: Liquidation Edition
When the market breaks, does your trading system know?
On Oct 10–11, 2025, over $19B in crypto positions were liquidated, the largest liquidation event on record. Hyperliquid auto-deleveraged profitable positions. Basis trades that looked hedged suddenly weren’t.
In this demo we replay a real Hyperliquid liquidation cascade and run a Binance/Hyperliquid basis trade through it, then show what breaks in the execution layer:
Positions closed by ADL with no order from you
Funding debits quietly moving margin and liquidation prices
Hedge legs that lag or partially fill in a thin book
Stale feeds and rate limits at peak volume
We’ll also cover how Hyperliquid liquidations actually work: mark price, partial liquidations, backstops, and how to build a liquidation map from real on-chain positions.
For quant developers, execution engineers, and small trading teams running their own infrastructure across venues.
Part 3 of the Small Weird Failures That Are Eating Your Lunch