Hyperliquid, a decentralized derivatives exchange, experienced a 27-minute API outage on July 29, 2025, freezing all trading activity between 14:20 and 14:47 UTC. The disruption stemmed from an API server malfunction caused by a sudden traffic spike, which severed communication between Hyperliquid's decentralized protocol and its centralized frontend interfaces.
During the outage, users were unable to open/close trades, manage short positions, or withdraw funds. Despite the blockchain backend remaining operational, all standard access points – including mobile apps and website – became non-functional. Community reports confirmed trading paralysis, with third-party platforms like BasedApp (backed by Delphi, Hashed, and Spartan) also affected.
HYPE, Hyperliquid's native token, immediately dropped 5% from $45 to $42.87 before partially recovering to $44.25. The incident exposed critical vulnerabilities in DeFi infrastructure, highlighting how centralized frontends remain single points of failure – a weakness previously exploited in attacks on Curve Finance, Ethena Labs, and Balancer.