TechFlow news, on December 10, Jeff, co-founder of Hyperliquid, responded on social media to an academic paper questioning the platform's auto-deleveraging (ADL) mechanism.
Jeff stated that the paper's author fundamentally misunderstood the ADL mechanism, emphasizing that "ADL does not transfer profits and losses to HLP," but instead treats HLP and users in a completely symmetric manner. He clearly pointed out that "ADL has nothing to do with HLP or backstop liquidation."
In response to the paper's claim that "ADL destroyed $653 million in gains," Jeff refuted it as a misinterpretation of the mechanism. He criticized the paper's author for using "fancy machine learning terminology" to cover up falsehoods without understanding the definitions of the subject being studied, and expressed disappointment toward these "scholars" celebrated by the industry.
