Hyperliquid absorbs $576M of forced sales during October 2025 crash

Hyperliquid, an on-chain perpetual futures venue, redirected most forced selling during the October 2025 crypto crash to its backstop instead of its public order book. Approximately 641 million dollars were force-sold on Hyperliquid at 21:19 UTC on October 10, with about 576 million dollars absorbed by the backstop and 64 million dollars reaching the order book. This division is significant as a thinning public order book can lead to lower prices and trigger more leveraged position closures. The Hyperliquid backstop mitigates this effect by absorbing orders internally. The study indicated that the backstop absorbed 62.6% of forced-sale value off-book after the crash began. The forced selling was highly concentrated, with 87.8% occurring within 30 minutes and 96.5% within one hour. The research tracked 733 million dollars of book-directed forced-sale value over a 15.7-hour period post-onset, including 644 million dollars during the initial phase. The backstop's effectiveness was modeled with a branching ratio, remaining below 0.2 in all measured scenarios, indicating it dampened liquidation feedback within the venue. The findings are specific to Hyperliquid and do not account for potential amplification of liquidations across the broader market.