An oversized bet on the meme coin “Fartcoin” that skyrocketed it ended in a 50% crash.
A group of wallets tried to push Fartcoin’s price higher by building a $145.24 million token long position on Hyperliquid, the decentralized perpetual futures exchange that has become the go-to place for leveraged crypto bets during the ongoing US-Iran war.
Trading exploded on Wednesday, plunging the token 50% in a single hourly light from $0.2519 to $0.1244, costing the entity behind the wallets around $3 million.
Fartcoin is a Solana based memecoin minted on Pump.fun in October 2024 for 2 SOL. It has no intrinsic value and has a transaction system where every trade produces a digital flatulence sound, yet it has built a cult following large enough to make it a top-100 token by market capitalization and a top-10 token by derivatives open interest, with over $1 billion in futures exposure at its peak.
On-chain data from Hyperliquid shows how the position was assembled and how it came apart.
At least two wallets were used to build the long one. Addresses 0x511c accumulated tokens through TWAP orders, an automated system that breaks a large purchase into smaller pieces over time to minimize market impact, buying around $0.248 per token. token.
Address 0x71c97d opened longs at approximately $0.205. Both were building into 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 thin liquidity.
It is unclear whether the wallets belonged to the same person or a group of people who intended to drive up FARTCOIN’s prices.
However, the relaxation was not gradual. Address 0x511c was completely liquidated, ending at $0.00 with no positions left. Its liquidation records show 28.16 million FARTCOIN and a separate 6.7 million FARTCOIN-USD position closed at $0.2155, totaling about $1.45 million in liquidation value.
Address 0x71c97d was liquidated in two separate fills, 29.98 million tokens at $0.1822 and 7.49 million at $0.1880, for a total of about $6.87 million in liquidation value. That purse has $35,074 left.
The liquidation was so large relative to the order book that Hyperliquid’s auto-degearing mechanism was activated, forcibly closing out profitable short positions on the other side of the trade to prevent the system from accumulating bad debt.
Two short-biased accounts were auto-degeared 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 a 100% short position distribution, became the ADL of 4.75 million FARTCOIN12, $5222.
Address 0x4196, with $12.9 million in all-time PnL and a 96.44% short allocation, became the ADL of 15 million FARTCOIN for $336,599. None of them chose to close. Hyperliquid shut them down.
The total $849,000 in ADL profits came at zero fees, an artifact of the mechanism rather than a trading decision. Both accounts are sophisticated card-biased operators with multi-million dollar track records on the platform. They were positioned correctly 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 in FARTCOIN was drained along with USDC, wrapped bitcoin and dozens of other assets. The token is trading at $0.1244 as of Wednesday afternoon.
