Hyperliquid Backstop Dampens Liquidation Feedback During Crypto Crash

A recent study on Hyperliquid, an on-chain perpetual futures venue, has found that during the worst minute of the October 2025 crypto crash, around $576 million of forced sales were diverted from its public order book to a backstop.

The research preprint, which has not yet undergone peer review, suggests that this diversion may have helped prevent a systemic crash by interrupting price-pressure feedback loops that can force leveraged positions to close.

According to the study, about $641 million was forced-sold on Hyperliquid at 21:19 UTC on October 10. Of this amount, roughly $576 million went to the backstop, while around $64 million reached the public order book.