An outsized bet on the meme coin “Fartcoin,” which sent it skyrocketing, ended in a 50% crash.
A group of wallets attempted to drive up the price of Fartcoin by creating a token $145.24 million long position in Hyperliquid, the decentralized, perpetual futures exchange that has become the venue of choice for leveraged crypto bets during the ongoing war between the United States and Iran.
The exchange exploded on Wednesday, sending the token down 50% in a single hourly candle, from $0.2519 to $0.1244, and costing the entity behind the wallets approximately $3 million.
Fartcoin is a Solana-based memecoin issued on Pump.fun in October 2024 for 2 SOL. It has no intrinsic value and features a transactional system in which every transaction produces a sound of digital flatulence, but it has built a cult following large enough to make it a top 100 token by market cap and a top 10 by derivatives open interest, with over $1 billion in futures exposure at its peak.
Hyperliquid’s on-chain data shows how the position was assembled and how it was dismantled.
At least two wallets were used to build along. Trade accumulated 0x511c tokens through TWAP Orders, an automated system that breaks a large purchase into smaller chunks over time to minimize market impact, purchasing approximately $0.248 per token.
The address 0x71c97d opened long positions at around $0.205. Both were part of a rally that took Fartcoin from around $0.16 to $0.25 over several days, a move that the position itself likely contributed to, given the token’s low liquidity.
It is unclear whether the wallets belonged to the same person or a group of people who intended to drive up the price of FARTCOIN.
The outcome, however, was not gradual. Address 0x511c was completely liquidated, ending at $0.00 with no positions remaining. Its liquidation records show 28.16 million FARTCOIN and a separate 6.7 million FARTCOIN-USD position closed at $0.2155, totaling approximately $1.45 million in liquidation value.
Address 0x71c97d was liquidated in two separate runs, 29.98 million tokens at $0.1822 and 7.49 million at $0.1880, totaling approximately $6.87 million in liquidation value. There is $35,074 left in this wallet.
The liquidation was so large relative to the order book that Hyperliquide’s automatic deleveraging mechanism activated, forcibly closing profitable short positions on the other side of the trade to prevent the system from accumulating bad debt.
Two short-term accounts were automatically deleveraged to $0.1929, both at 7:52 a.m. on April 9. Address 0x06ce, an account with $15.1 million in all-time combined PnL and 100% short distribution, was ADL on 4.75 million FARTCOIN for a closed profit of $512,522.
Address 0x4196, containing $12.9 million in all-time PnL and a short allocation of 96.44%, was allocated to ADL on 15 million FARTCOIN for $336,599. Neither chose to close. The hyperliquid closed them.
The ADL’s $849,000 in combined profits were generated without fees, an artifact of the mechanism rather than a business decision. Both accounts are sophisticated short-term traders with multi-million dollar track records on the platform. They were properly positioned and paid for it, but not on their own terms.
FARTCOIN was also among the tokens stolen in last week’s $270 million Drift Protocol exploit, where $4.1 million worth of FARTCOIN was drained alongside USDC, wrapped bitcoin, and dozens of other assets. The token is trading at $0.1244 as of Wednesday afternoon.
