A huge bet on the meme coin “Fartcoin”, which drove it up even further, ended in a 50% drop.
A group of wallets attempted to drive up the price of Fartcoin by creating a $145.24 million token long position on Hyperliquid, the decentralized perpetual futures exchange that has become the venue of choice for leveraged crypto betting during the ongoing war between the United States and Iran.
The trade blew up on Wednesday, sending the token down 50% in a single hourly candle from $0.2519 to $0.1244, and costing the entity behind the wallets approximately $3 million.
Fartcoin is a Solana-based memecoin minted on Pump.fun in October 2024 for 2 SOL. It has no intrinsic value and features a transactional system where every trade produces a sound of digital flatulence, yet it has built a cult following large enough to make it a top 100 token by market capitalization and a top 10 token by derivatives open interest, with over $1 billion in futures exposure at its peak.
Hyperliquid’s on-chain data shows how the position was built and how it unraveled.
At least two wallets were used to construct the length. Address accumulated 0x511c tokens through TWAP orders, an automated system that breaks a large purchase into smaller pieces over time to minimize impact on the market, purchasing around $0.248 per token.
Address 0x71c97d opened long positions at approximately $0.205. The pair were building a rally that took Fartcoin from around $0.16 to $0.25 over several days, a move that the position itself likely contributed to, given the token’s low liquidity.
It is not clear whether the wallets belonged to the same person or a group of people who intended to drive up FARTCOIN prices.
However, the relaxation was not gradual. Address 0x511c was completely liquidated and ended at $0.00 with no positions remaining. Its liquidation records show 28.16 million FARTCOIN and a separate position of 6.7 million FARTCOIN-USD closed at $0.2155, for a total of approximately $1.45 million in liquidation value.
Address 0x71c97d was liquidated in two separate fills, 29.98 million tokens at $0.1822 and 7.49 million at $0.1880, for a total of approximately $6.87 million in liquidation value. That wallet has $35,074 left.
The liquidation was so large relative to the order book that Hyperliquid’s automatic deleveraging mechanism was activated, forcibly closing profitable short positions on the other side of the trade to prevent the system from accumulating bad debts.
Two accounts with short bias were automatically deleveraged to $0.1929, both at 7:52 am on April 9. Address 0x06ce, an account with $15.1 million in all-time combined PnL and a 100% short position distribution, received ADL on 4.75 million FARTCOIN for a closed profit of $512,522.
Address 0x4196, with $12.9 million in all-time PnL and a short allocation of 96.44%, was ADLed into 15 million FARTCOIN for $336,599. None chose to close. Hyperliquid closed them.
ADL’s combined $849,000 in profits were earned commission-free, an artifact of the mechanism rather than a business decision. Both accounts are sophisticated, short trend traders with a multi-million dollar track record on the platform. They were positioned correctly and paid for it, but not on their own terms.
FARTCOIN was also among the tokens stolen in last week’s $270 million Drift Protocol exploit, where $4.1 million worth of FARTCOIN was drained along with USDC, wrapped bitcoins, and dozens of other assets. The token is trading at $0.1244 on Wednesday afternoon.
