Jupiter’s risk vault is unlikely to face high lipid-style attacks

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Following the $13 million brush of Hyperliquid’s disaster, some on Solana’s orbit are wondering. Could Jupiter’s JLP Vault (a similar product to Hyperliquid’s vulnerable Vault) be faced with similar exploits?

no.

That’s my short but truly confident answer. Let’s unpack the reason.

In a brief summary, last week, last week, some unknown traders thought it would be cute by manipulating the price of thin trade jelly memo coins on decentralized perpeerrange liquids. The estimated goal was to mobilize large short apertures, which forced the protocol to absorb short losses while still being able to benefit from leveraged long positions.

The leveraged long position of the attacker quickly created an unrealized loss of over $13 million in high lipid HLP risk vaults, and forced all jelly positions to close at a price favorable to the high lipid balance sheet.

Now we can debate whether it is a remedy, a dislike for the decentralized mind, or simply controlling practical damage. The key is that it worked.

By forcing all jelly positions to resolve with the Exploiter’s short $0.0095, the protocol essentially reversed the attack. This means that while the attackers left for just less than they deposited, the high lipids actually hilariously posting about $700,000 in profits. The Hyperquid team instantly ensured that users will be whole through hyperfoundation, and everyone has lived happily ever after.

Hooray.

However, if you can attack PERPS DEX, it raises questions about Jupiter, the biggest Dex aggregator and PERPS exchange in Solana. Like Hyperliquid, Jupiter’s platform features a safe that acts as a counterpart for all your trading purposes. This is a very creatively named (/s) Jupiter liquidity provider pool, or JLP. JLP collects trading fees and earns a lot when traders lose, but they hit when they win.

HLP. JLP. That sounds pretty similar. So, with that in mind, can you squeeze this safe in a similar way? In theory, yes. Anything is possible. I’m not going to call Titanic unsinkable. However, Jupiter’s architecture is actually unlikely.

First, consider the list of assets. There was no attack on Jelly, but the tokens had little liquidity, making it easier to manipulate prices. High liquids have listed it as they prioritize a broad asset strategy to attract volume, novelty and grade.

Jupiter doesn’t do that. Its perpetual is limited to major assets such as SOL, ETH and Lap BTC. That decision alone eliminates the vulnerability of the thin market, which has made jelly so exploitable. A representative of Jupiter said the platform’s maximum order size is also much smaller than high lipids.

Secondly, the price execution. Hyperliquid relies on internal order books to match traders directly with each other. Users submit their own restricted orders and offer more flexible and dynamic pricing. But that also leads to many exploitable scenarios. Motivated attackers set up artificial moves that affect the prices displayed on the platform and cause cascade clearing and dislocation. There are no Bueno.

Jupiter’s PARP market operates in a completely different way, and instead chooses to run it at Oracle price from an external source like Pyth. Even if traders tried to pump the spot price of SOL in another exchange, they would be trading against the median on-chain price, not the quoting of the manipulated platform.

Frankly, it’s difficult to play games at home when prices come from outside the casino.

Third, Jupiter handles risks with guardrails rather than emergency exits. JLP is always a counter party. If a transaction is settled, the lever will be automatically pulled at the set oracle price. As far as we know, there is no handoff to the second vault, there is no delay in which a bad actor can play the game, and there is no pause for team calls or ballet votes. The loss goes straight to the pool.

Again, it could be argued that this will dull or not relentless the system, but LPS is what is accepted as part and parcel (and why it needs to be clarified now).

That doesn’t mean that JLP is not affected by risk. For example, in a one-sided market where most traders win, losses will occur regularly. However, Jupiter is also burning its defenses for this reason. Traders pay borrowing fees to open leveraged positions and move directly into the pool. If everyone stacks up long, the funding rate will rise to balance the associated risks.