Hyperliquid plans automated refunds for affected users following API outage

Hyperliquid, a popular decentralized exchange built on its own Layer 1 blockchain, has confirmed it will issue automated refunds to users affected by an API server issue that led to over 30 minutes of trading downtime on Tuesday.

Multiple users began reporting trade execution issues from 14:10 UTC on Tuesday, with price divergences caused by traders being unable to close positions during the downtime.

Although Hyperliquid's status page initially did not reflect the problem, a subsequent update confirmed the "major outage," outlining that the root cause was due to a spike in traffic rather than a hack or vulnerability exploit.

What happened?

"Yesterday, the API servers experienced a significant spike in traffic, leading to order delays from approximately 14:10-14:47 UTC," Hyperliquid reiterated in its latest message. "The past weeks have seen back-to-back-to-back all-time highs in open interest as well as record highs in protocol revenue. While growing pains are challenging, they are a testament to Hyperliquid's momentum," it added.

Hyperliquid's blockchain, consensus, and HyperEVM operated normally, with blocks continuing to be produced at the usual rate despite API server congestion. However, the API returned error messages even though transactions were successfully sent to the mempool and later confirmed onchain, the team explained. "This confused many users, and improvements are being rolled out to address this," it said.

Hyperliquid's native token fell slightly by 3.75% to around $43 during the incident and is currently trading at $42.60, according to The Block's HYPE price page.