wildPhantom

BTC Market Update.. Between 14:15 and 15:15 UTC, low BTC liquidity caused a price dislocation in Bulk’s orderbook while the external oracle remained near $79,600 Several highly leveraged accounts traded aggressively through the available depth. One account, 8dDu…q1Wh, repeatedly rebuilt a large BTC short while undergoing partial liquidations. It generated approximately $1.5 million of sell volume across 400 fills and was partially liquidated eight times. This concentrated activity materially reduced available book liquidity. Approximately 6.50 BTC of the account’s flow was absorbed by the protocol liquidation strategy too At 14:36:45 UTC, a protective short-close order activated near a mark price of $81,450. It became a reduce-only market buy, consumed the limited ask liquidity, and reached a resting ask at $115,115. Three additional protective short-close orders activated shortly afterward, near $82,000, $82,239, and $82,500. The resulting dislocation triggered a wider liquidation and ADL cascade. Within the primary event: > Multiple highly leveraged short accounts were force-closed > Open interest fell from approximately 26.21 BTC to 6.82 BTC > The protocol liquidator absorbed substantial inventory and incurred a material loss while containing the event. > ADL covered approximately $48,480 of account shortfall >Protocol liquidator/risk-vault capital covered approximately $66,149 that ADL could not recover Across the full incident, the protocol processed approximately 26.55 BTC of forced liquidations and approximately 17.69 BTC of matched ADL reductions. The liquidation, ADL, and risk-vault mechanisms contained the account deficits and prevented them from developing into exchange-wide insolvency This incident was driven by low orderbook depth, concentrated highly leveraged activity, and multiple execution and risk mechanisms interacting during a low-liquidity bootstrap period. We are reviewing every affected liquidation and ADL account and will reimburse eligible users for losses due to the dislocation 🙏 The next network upgrade introduces three immediate protections: 1. A mark price that is harder to move We are removing mark price’s sensitivity to a shallow or heavily skewed local book. During the liquidity-bootstrap phase: > Mark will remain more strongly anchored to robust external market data. > Small amounts of distant liquidity will not materially move mark. > Local book inputs will require sufficient depth before influencing mark. > Mark-versus-oracle divergence will be explicitly bounded 2. User equity will no longer depend on instantaneous local liquidity User equity currently is evaluated using an estimated price-to-close. This is conservative in a deep market, but in a thin market a missing price level can make the estimated closeout cost deteriorate suddenly! During the bootstrap period: > Equity and liquidation eligibility will use market price instead of instantaneous local price-to-close. > Sparse depth will no longer immediately reduce account equity. > A temporary liquidity gap will not by itself trigger a broad liquidation cascade. > Liquidation eligibility will remain aligned with the market reference used by users and market makers. Liquidity-aware equity will return when the books have normal, reliable depth, with explicit impact caps, minimum-depth requirements, and stronger oracle anchoring These protections are designed for the current low-liquidity phase and will remain active while deeper, more resilient market liquidity is established Bulk has zero tolerance for market manipulation. Any deliberate attempt to exploit low-liquidity conditions, manipulate the order book, or externalise losses onto users or the protocol will be thoroughly investigated and will not be tolerated User safety, platform security, and the protection of customer trades come before every other priority. Eligible users affected by this dislocation will be reimbursed following the incident review today xitter.cf/Rutto02/status/2096647…