Fartcoin's price crashed 50% after $145 million manipulation bet went wrong

The liquidation was so large relative to the order book that Hyperliquid's auto-deleveraging mechanism activated, forcibly closing profitable short positions on the other side of the trade to prevent the system from accumulating bad debt.

What to know:

• A highly leveraged long bet on the Solana-based memecoin Fartcoin imploded on the Hyperliquid exchange, triggering a 50 percent price crash and roughly $3 million in losses for the trader behind multiple wallets.
• On-chain data show two main wallets built a 145.24 million-token long position that helped drive Fartcoin's rally before both were forcibly liquidated in large blocks as thin liquidity magnified the move lower.
• The liquidation was so large that Hyperliquid's auto-deleveraging system kicked in, forcibly closing profitable short positions for about $849,000 in fee-free gains, while Fartcoin—already hit in a recent $270 million Drift Protocol exploit—now trades around $0.1244.

An outsized bet on the meme coin "Fartcoin," which rocketed it higher, ended in a 50% crash.

A group of wallets attempted to push Fartcoin's price higher by building a $145.24 million token long position on Hyperliquid, the decentralized perpetual futures exchange that has become the venue of choice for leveraged crypto bets during the ongoing U.S.-Iran war.

The trade blew up on Wednesday, crashing the token 50% in a single hourly candle from $0.2519 to $0.1244, and costing the entity behind the wallets roughly $3 million.

Fartcoin is a Solana-based memecoin minted on Pump.fun in October 2024 for 2 SOL. It holds no intrinsic value and features a transactional system in which each trade produces a digital flatulence sound, yet it has built a cult following large enough to make it a top-100 token by market cap and a top-10 token by derivatives open interest, with over $1 billion in futures exposure at its peak.

On-chain data from Hyperliquid shows how the position was assembled and how it came apart.

At least two wallets were used to build the long. Address 0x511c accumulated tokens through TWAP orders, an automated system that breaks a large buy into smaller pieces over time to minimize market impact, purchasing around $0.248 per token.

Address 0x71c97d opened longs at approximately $0.205. Both were building into a rally that took Fartcoin from roughly $0.16 to $0.25 over several days, a move the position itself likely contributed to, given the token's thin liquidity.

It is unclear whether the wallets belonged to the same person or a group of people who intended to drive FARTCOIN's prices up.

The unwind was not gradual, however. Address 0x511c was liquidated completely, ending at $0.00 with no positions remaining. Its liquidation records show 28.16 million FARTCOIN and a separate 6.7 million FARTCOIN-USD position closed at $0.2155, totaling roughly $1.45 million in liquidation value.

Address 0x71c97d was liquidated on two separate fills, 29.98 million tokens at $0.1822 and 7.49 million at $0.1880, totaling roughly $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 auto-deleveraging mechanism activated, forcibly closing profitable short positions on the other side of the trade to prevent the system from accumulating bad debt.

Two short-biased accounts were auto-deleveraged at $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, was ADL'd on 4.75 million FARTCOIN for a closed profit of $512,522.

Address 0x4196, carrying $12.9 million in all-time PnL and a 96.44% short allocation, was ADL'd on 15 million FARTCOIN for $336,599. Neither chose to close. Hyperliquid closed them.

The combined $849,000 in ADL profits came at zero fees, an artifact of the mechanism rather than a trading decision. Both accounts are sophisticated short-biased operators with multi-million dollar track records on the platform. They were positioned correctly and got 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 in FARTCOIN was drained alongside USDC, wrapped bitcoin, and dozens of other assets. The token trades at $0.1244 as of Wednesday afternoon.

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