The Chopping Block: Inside the $19B+ Perp Crash, ADL Explained, Binance’s USDe/Staked-Token Depeg, and the Hyperliquid Whale Debate

Welcome to The Chopping Block — where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest in crypto. This week, Doug Colkitt, Founder Ambient Finance & Founding Contributor at Fogo, joins us as one of the wildest weekends in crypto history drags us back on air: a record $19B+ in liquidations, gas spiking toward $400, exchange APIs wobbling, and ADL ripping through perps as hedges vanished. We unpack what ADL actually does, why delta-neutral farmers got nuked, and how Binance’s USDe and staked ETH/SOL pegs snapped amid index design and mint/redeem gaps—followed by refunds. We get into HLP vs. LLP (vaults vs. winning traders), the Hyperliquid “whale” short ahead of the tariff tweet, cross-margin reflexivity that torched alts, and why market makers wore outsized pain. Then we zoom out to infra: sequencers, force-inclusion in practice, and the case for on-chain clearing plus real insurance funds before the next Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform. Show highlights 🔹 Record wipeout — $19B+ liquidations, 1.6M traders rekt, gas spiking to ~$400 while major exchanges wobbled. 🔹 ADL, decoded — What happens when perps run out of counterparties; socialized losses, P&L/leverage ranking, and why hedges vanished. 🔹 Delta-neutral nuked — Cross-venue long/short farmers turned naked as ADL picked off one leg first. 🔹 Binance peg breaks — USDe to ~$0.68 on Binance, staked ETH/SOL snapped; refunds >$250M after index/oracle and mint-redeem gaps. 🔹 Flows vs. “attack” — Earn users rushing to USDT + copy-trade momentum likely amplified the depeg more than cunning index games. 🔹 DeFi vs. CeFi — Perp DEX performance broadly comparable; transparency gaps in ADL policies and liquidation mechanics laid bare. 🔹 Vaults vs. traders — HLP vs. LLP outcomes show who platforms chose to protect in tail events—and the retention risks of clipping winners. 🔹 OI collapse — Hyperliquid open interest ~15B → ~6B; cross-margin reflexivity helped nuke alts far worse than BTC. 🔹 Why it felt one-sided — Market-maker/API failures and risk misallocation made typically “safe” actors eat outsized losses. 🔹 The whale short — A massive Hyperliquid short pre-tariff tweet sparks insider-vs-coincidence debate. 🔹 Infra faceplants — Sequencers down, force-inclusion in theory only, docs offline—while base L1s largely kept ticking. 🔹 What to fix — On-chain clearing, real insurance funds, sane ADL ranking, robust mint/redeem, and better index/oracle design before the next shock. Hosts ⭐️Haseeb Qureshi, Managing Partner at Dragonfly ⭐️Robert Leshner, CEO & Co-founder of Superstate⭐️Tarun Chitra, Managing Partner at Robot Ventures⭐️Tom Schmidt, General Partner at Dragonfly Guest ⭐️ Doug Colkitt, Founder Ambient Finance & Founding Contributor at Fogo ⁠⁠Disclosures⁠⁠ Timestamps 00:00 Intro 01:11 $19B+ Liquidated 04:35 Personal Experiences & Reactions 08:30 Understanding Auto De-leveraging (ADL) 14:37 Binance & USDe Incident 23:19 DeFi vs CeFi Performance 26:05 Zero-Sum & Greedy Algorithms 34:26 Vaults & Trader Protection 39:43 Market Reactions & Trader Sentiments 44:33 Infrastructure Failures & OI Collapse 46:56 Insider Trading Allegations & Market Manipulation 52:14 Future of Perpetual DEXs Learn more about your ad choices. Visit megaphone.fm/adchoices