In the fast-paced world of crypto trading, where fortunes can flip in minutes, a recent event on Hyperliquid has everyone talking. A sudden pump in $LAUNCHCOIN—a Solana-based token tied to an AI-powered launchpad for new coins—triggered a massive liquidation for GSR Markets, a prominent crypto market maker. This wasn't just a single hit; it set off a chain reaction, wiping out their short positions on several other assets and resulting in over $4 million in losses within 24 hours.

For those new to the lingo, a "short position" means betting that a token's price will drop. You borrow the asset, sell it high, and hope to buy it back cheaper later. But if the price pumps instead, you get liquidated—forced to buy back at a loss to cover your position. Hyperliquid is a decentralized exchange (DEX) specializing in perpetual futures (perps), which allow traders to use leverage for bigger bets without owning the underlying asset.

According to on-chain data shared by Lookonchain on X, GSR Markets' short on $LAUNCHCOIN got squeezed hard. The liquidation didn't stop there; it cascaded to their shorts on $MNT (Mantle), $POPCAT (a popular cat-themed meme coin), $LINK (Chainlink), and $LDO (Lido DAO). The account was essentially zeroed out.

Looking at the trade history, it's clear how quickly things unraveled. Multiple market order liquidations happened in rapid succession on September 9, 2025, starting with LAUNCHCOIN and spreading to the others. The closed PNL figures paint a grim picture: losses ranging from thousands to hundreds of thousands per trade.

Transfers from the GSR Markets wallet show inflows and outflows in USDC, likely attempts to fund or withdraw amid the chaos. Just hours before, there was a $3.4M deposit via Hyperliquid's bridge, but it wasn't enough to stem the tide.

What is $LAUNCHCOIN, and why did it pump so hard? As per CoinGecko, it's the native token of Believe, an AI-driven platform that lets creators launch new tokens quickly on Solana. It rewards communities and offers lifetime fees—perfect for the meme coin frenzy where quick launches fuel hype. On that day, LAUNCHCOIN saw an 18.86% price increase, trading around $0.09 with hefty volume. This volatility is par for the course in meme and utility tokens on Solana, where pumps can come from community buzz, listings, or even viral tweets.

GSR Markets, known for providing liquidity across exchanges, isn't new to risks, but this highlights the perils of leveraged trading in volatile markets. Meme coins like $POPCAT add an extra layer of unpredictability, driven more by social media trends than fundamentals.

The crypto community on X had mixed reactions. Some called it "hyperliquidated," others joked about institutions learning hard lessons on stop losses. One user noted, "that's wild, a single $launchcoin squeeze nuking gsrm’s whole book shows how brutal hyperliquid liquidations can get." It's a reminder that even big players can get rekt in this space.

For meme token enthusiasts and blockchain practitioners, this event underscores key lessons: always manage risk with stop losses, diversify positions, and stay alert to on-chain signals. Platforms like Hyperliquid offer high rewards but come with high stakes. If you're diving into perp trading or launching your own meme coin via tools like Believe, keep an eye on liquidity and market sentiment to avoid similar fates.

Stay tuned to Meme Insider for more updates on meme token drama, tech innovations, and trading insights. What's your take on this liquidation saga? Share in the comments!