POPCAT memecoin experienced a sudden collapse after a coordinated multi-wallet maneuver triggered cascading liquidations and forced protocol intervention.
$3M USDC Withdrawn from OKX
An individual withdrew $3 million USDC from OKX according to Lookonchain, dispersing the funds across 19 separate wallets. The distribution suggested a deliberate setup for multi-wallet execution, likely designed to amplify market impact while masking intent.
Massive Long Position in POPCAT
At approximately 14:45 CET, these wallets collectively placed buy orders totaling ~$20 million at $0.21, pushing their total long exposure to ~$30 million. The aggressive positioning created an artificial buy wall, temporarily propping up POPCAT’s price.
Sudden Removal of Buy Wall
The stability was short-lived. Once the buy wall was abruptly removed, the market collapsed. The sharp downturn triggered instant liquidation of the long positions, erasing the artificial support and sending shockwaves through traders.
Hyperliquid Protocol Absorbs Exposure
Hyperliquid’s protocol automatically absorbed the failed position. However, as POPCAT continued to fall, the system incurred a $4.9 million loss. To prevent further damage, Hyperliquid executed manual intervention, closing the position and stabilizing the protocol.
Arbitrum Bridge Paused
As a precautionary measure, the Arbitrum bridge was temporarily halted, though other operations across the ecosystem remained unaffected. The pause underscored the seriousness of the event and the need to contain systemic risk.
Key Takeaways
- Coordinated multi-wallet execution amplified market volatility.
- Artificial buy support created unsustainable exposure in POPCAT.
- Hyperliquid absorbed losses but required manual intervention to limit damage.
- Arbitrum bridge pause highlights defensive measures in DeFi infrastructure.
Structural Weaknesses in Perp DEXs
The attack highlights a repeatable vector across decentralized perpetual protocols:
| Weakness | Impact |
|---|---|
| Low-liquidity assets (like POPCAT) | Cheap to manipulate |
| High leverage (20–30x) | Amplifies small moves exponentially |
| Order book dependency | Fake depth breaks liquidation paths |
Protocols like GMX, Drift, MUX, Vela, and even early dydx have faced similar vulnerabilities. It takes only hundreds of thousands to trigger millions in losses, making this a systemic risk.
POPCAT’s plunge wasn’t just market volatility — it was market design weaponized. In DeFi, transparency can be both strength and weakness: predictable mechanics invite exploitation. While Hyperliquid’s intervention contained the fallout, the episode raises pressing questions about protocol resilience, trader manipulation, and systemic safeguards in DeFi.
