Qwatio, a leverage trader on Hyperliquid, managed to quickly accumulate millions with successful bets and a way to avoid losses. Three months later, he lost $10 million in three days of liquidation after liquidation.

This incident is much smaller-scale than other famous leverage trading stories, but it contains valuable lessons. Hyperliquid closed his risk mitigation loopholes, and whale hunters organized to take him down.

Qwatio’s Wild Ride on Hyperliquid

The story of James Wynn captivated the crypto community, as one man’s leveraged trading on Hyperliquid led to $100 million losses, possibly moving the whole market.

Today, Lookonchain highlighted qwatio, another Hyperliquid trader that bet big and saw millions of gains come crashing down.

Essentially, qwatio made a series of risky Hyperliquid bets that led the community to speculate he was an insider. One day before President Trump announced the Crypto Strategic Reserve, he made a bold move.

Specifically, qwatio went long on BTC and ETH with 50x leverage, allowing him to gain $6.8 million in one day. From here, he made similar bold moves.

However, this insane leverage is not the whole story. Overleveraged trading on Hyperliquid can lead to devastating losses, but qwatio found an exploit to reduce his exposure.

After withdrawing the $6.8 million in profits, he liquidated ETH positions worth $305 million. This may seem like leaving money on the table, but it actually offloaded his riskiest positions.

After these liquidations, the Hyperliquidity Provider (HLP) had to eat the loss. This proved to be a pattern for several such trades, allowing him to accumulate millions.

Lookonchain even speculates that this tactic inspired the JELLYJELLY short squeeze, which turned into a major crisis for the platform.

In response, the HLP significantly lowered its leverage limits after this incident. Apparently, this was something of a peak for qwatio’s Hyperliquid trading career.

Things Can Fall Apart Quickly in Leveraged Trading

From this high in March, qwatio’s luck took a turn for the worse. “Whale hunter” teams organized to take him down, manipulating the price of assets in which he was overleveraged.

Although the first attempts to do this were unsuccessful, qwatio was forced to deposit millions to keep his Hyperliquid positions from liquidating. This proved to be the beginning of the end.

After a few months of this, qwatio’s continued Hyperliquid adventures have only brought negative returns. In the last three days, his positions have been liquidated six times.

This led to $10 million in losses, and he changed his handle to “falllling.” Despite this, he keeps trying, depositing $4.5 million on a BTC/ETH bet earlier today.

So, what lesson can aspiring Hyperliquid traders learn from qwatio? Simply put, overleveraged trading seems risky at face value, but it can be even more dangerous than imagined.

When he made the HLP eat its losses, the whole platform’s rules changed. Further, whale hunters tried to attack Qwatio specifically, seeing him as a vulnerable target.

There’s no “infinite money glitch” in real life. No matter how clever someone is at outsmarting the market, it has ways of snapping back. Any retail trader can try to mimic Qwatio’s Hyperliquid behavior, but one misstep can destroy everything.