Hyperliquid co-founder Jeff Yan and analytics platform CoinGlass stated that the largest centralized exchanges, including Binance, may systematically underestimate the volume of liquidations during market crashes.
Record liquidations amid market crash
The market experienced the largest wave of liquidations in history. After Donald Trump announced new trade tariffs against China, Bitcoin fell to $102,000, Ethereum to $3,500, and Solana dropped below $140.
According to CoinGlass, $16.7 billion in long positions and $2.46 billion in short positions were liquidated in a single day, setting an absolute record for the crypto market.
However, according to Jeff Yan, the real numbers may be much higher. He noted that Binance and other centralized platforms only count one liquidation per second for each pair, whereas during panic there may be dozens or even hundreds.
‘Since liquidations occur in bursts, the actual volumes may be underestimated by a factor of one hundred,’ Yan wrote on X.
CoinGlass also confirmed that Binance’s liquidation reporting may not reflect the full picture, especially during peaks of volatility.
Failures and compensations on Binance
The price collapse revealed the vulnerability of centralized systems. Binance users massively complained about failures: orders were stuck, buttons did not respond, and the only function that continued to work was liquidations.
Later, Binance explained that the zero prices displayed for a number of tokens were an interface error related to a change in minimum price increments. In an official statement, the company clarified that this was a ‘visual bug,’ not an actual collapse of assets to zero.
At the same time, some users did lose funds due to the depreciation of certain products, and Binance reported that it paid out more than $280 million in compensation.
Decentralized platforms demonstrated resilience
<img loading="lazy" decoding="async" class="aligncenter size-full wp-image-144625" title="photo_2_2025-10-13_21-40-54" src="https://coinspot.io/wp-content/uploads/2025/10/photo_2_2025-10-13_21-40-54.jpg" alt="The USDe stablecoin from Ethena maintained its peg to the dollar on Curve, although on Binance and Bybit the price dropped to $0.70." width="1280" height="634" srcset="https://coinspot.io/wp-content/uploads/2025/10/photo_2_2025-10-13_21-40-54.jpg 1280w, https://coinspot.io/wp-content/uploads/2025/10/photo_2_2025-10-13_21-40-54-360×178.jpg 360w, https://coinspot.io/wp-content/uploads/2025/10/photo_2_2025-10-13_21-40-54-400×198.jpg 400w, https://coinspot.io/wp-content/uploads/2025/10/photo_2_2025-10-13_21-40-54-768×380.jpg 768w" sizes="(max-width: 1280px) 100vw, 1280px" / alt="The USDe stablecoin from Ethena maintained its peg to the dollar on Curve, although on Binance and Bybit the price dropped to 
.70.” title=”photo_2_2025-10-13_21-40-54″>
Amid failures at centralized players, decentralized protocols (DeFi) showed greater resilience. The USDe stablecoin from Ethena maintained its peg to the dollar on Curve, although on Binance and Bybit the price dropped to $0.70.
According to Ethena Labs, users withdrew $2 billion USDe within a day without technical problems, and token issuance and redemption worked stably. Dragonfly fund head Haseeb Qureshi noted that a mass sale of USDe up to $90 billion on Binance triggered a chain reaction of liquidations and a sharp drop in illiquid markets.
Meanwhile, Hyperliquid stated that it did not experience a single delay and fully withstood the record load.
‘This stress test showed that a fully decentralized architecture is capable of withstanding extreme market fluctuations,’ the team said in a statement.
What this means for the market
The scandal over underestimating liquidations raised the issue of transparency at centralized exchanges. If the data is indeed distorted, investors and analysts cannot adequately assess risks and the depth of the collapse.
According to experts, the crisis became one of the first large-scale comparisons between centralized and decentralized systems. DeFi projects proved that they can operate autonomously even during shock market movements, while the CeFi segment faced overload and technical errors.
Read more: Why did USDe lose its dollar peg: attack or oracle failure?
