@zachharris.eth
Hyperliquid et all liquid staking filum feeders are NGMI. IMO news last week will be devastating once institutional allocators wake up.
Their chief risk offers will mandate compliant sale even if at markdown. This will create a cascading effect.
When the laggards wake up because of the bundled trenches of Stablecoin yield credit went from AAA → Junk. Gonna be devastating IMO.
Most likely this T0 bottleneck will create a run on who can get out while first, so QC will be forced to throttle.
This would create a gating effect and functional insolvency by way of lots of custodial notional collateral is currently tied up as working capital.
Meaning ironically they’re temporarily illiquid and don’t have enough immediate cash for a massive run.
Similar to what we saw when Gemini blew up, it created an 18 month arbitration to creditor queue.
But today at 2 - 3X the leverage with no backstop. I’m scared.
https://youtu.be/TeDjIPIKYY4?si=DhH5brfvP_-ymgyQ
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