Hyperliquid Reimburses $2M to Users After 37-Minute API Outage

Hyperliquid, a major decentralized derivatives trading platform, has reimbursed approximately $2 million to affected users following a 37-minute API outage on July 29, 2025. The disruption occurred amid a surge in traffic after the platform reached a record $14.7 billion in total open interest, leaving traders unable to execute orders during the downtime. In a rare move for a decentralized platform, Hyperliquid voluntarily compensated users for their losses, with no legal obligation to do so [2].

Users who lost less than $10,000 were fully reimbursed without needing to provide additional information. For those who incurred larger losses, the platform introduced a KYC verification process to ensure transparency and compliance. As of early August, more than $1.5 million had already been distributed, with the remaining funds expected to be issued by August 18, following the completion of the verification process [2].

The decision has been widely praised by the crypto community for its transparency and user-first approach. Unlike many platforms that operate without service-level agreements (SLAs) or contractual obligations to cover such incidents, Hyperliquid took full responsibility, reinforcing its commitment to accountability and trust [2].

This action follows a period of reputational rebuilding for the platform. In March 2025, Hyperliquid faced scrutiny after a $6.26 million exploit involving the token JELLY. Despite that setback, the platform has continued to grow in prominence, now ranking as the seventh-largest derivatives exchange globally according to CoinGecko [2]. The recent refund initiative further highlights its ability to respond effectively to operational challenges, potentially setting a benchmark for other decentralized exchanges.

Industry analysts suggest that Hyperliquid’s approach could serve as a model for how decentralized platforms manage trust and reliability during outages. By prioritizing user experience and transparency, Hyperliquid is demonstrating that decentralized infrastructure can offer not just security but also fairness and accountability—traits traditionally associated with centralized exchanges [2].

The move underscores a broader shift in the crypto industry, where user trust and operational excellence are becoming increasingly critical. As decentralized platforms continue to compete with their centralized counterparts, actions like Hyperliquid’s may influence other exchanges to adopt more transparent and user-focused policies [2].

Source:

[1] Cointelegraph - [https://cointelegraph.com/news/hyperliquid-reimburses-2m-crypto-traders-outage](https://cointelegraph.com/news/hyperliquid-reimburses-2m-crypto-traders-outage)

[2] Altcoin Buzz - [https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/hyperliquid-repays-2m-after-api-outage/](https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/hyperliquid-repays-2m-after-api-outage/)