Hyperliquid co-founder Jeff Yan raises concerns about the accuracy of crypto liquidation data, particularly from centralized exchanges (CEXs). He claims that some exchanges, including Binance, might be underreporting significant liquidations during volatile periods. This accusation stems from Binance’s reported practice of only displaying one liquidation order per second, potentially leading to a massive undercount – possibly by 100 times the actual number.
The surge in crypto market volatility is highlighted by over 1.6 million traders affected by massive liquidations during recent days. This event was followed by dramatic swings in Bitcoin’s price, dipping below $105,000 before recovering to $115,353 within 24 hours.
While Coinglass reports a staggering $19.1 billion in total liquidations for that day, Yan argues that this figure may not fully capture the true extent of these events. This raises concerns about the accuracy and transparency of market data and its impact on traders’ decisions.
Yan emphasizes the risk of inaccurate data representation in crypto markets. Liquidation figures play a significant role in understanding market sentiment and volatility; accurate reporting is crucial for investors, analysts, and market participants.
The issue of underreporting extends beyond individual exchanges. However, heightened volatility demands greater transparency in this dynamic industry. More consistent and comprehensive reporting practices are essential to ensure that all liquidation events are accurately captured and communicated for informed decision-making.
By addressing these concerns, CEXs can foster increased trust among traders and contribute to a more reliable market environment.