Andrei ( )

On Friday, 10 October, Hatom encountered the heaviest stress test of its suite of products since going live. With the entire crypto ecosystem seeing over $19 billion in liquidations, this was one of the worst black swan events ever witnessed. We are proud to announce that our work over the years to build one of the most resilient products in DeFi has paid off. Hatom operated without interruption throughout the event, liquidating approximately $800K in collateral and proving once again that our design is built to protect users. During periods like this, when asset prices depreciate sharply in a short time, many users could be liquidated instantly if there were no mechanisms to counteract price manipulation. In moments like these, price integrity is everything. This is where our Price Aggregator and Oracle design protects users. How it works Our Aggregator collects quotes from multiple reputable exchanges and publishes a median. In parallel, our Oracle reads the DEX Safe Price, a time-weighted average that smooths short spikes. On every update, the Oracle compares the Aggregator median with the DEX Safe Price. If they are within tolerance, the new price is accepted. If they diverge beyond the first threshold, the Oracle returns the last valid price; if they exceed the final threshold, the Oracle is temporarily suspended and requires manual intervention to review and unpause. During Friday’s cascade, this logic filtered out exchange wicks and isolated prints. Sudden one-venue drops did not force instant liquidations because the Safe Price and the Aggregator median disagreed beyond tolerance, so the system used the last valid price until markets realigned. When the broader market moved in a sustained way, fresh submissions arrived and the Oracle advanced to a new fair price, allowing liquidations to proceed where they were truly warranted. The result is simple. Legitimate market moves are honored, and short-lived manipulation attempts are ignored. Users are protected from unfair liquidations, liquidators have clear rules, and the protocol maintains orderly operations even under extreme stress. We are glad to see many users protected during the crash by these mechanisms, and we are deeply saddened for those who were liquidated. Unfortunately, this is part of using leverage. Please remember that leverage is risky, and everyone using it should be aware of the consequences, especially the importance of using safe, liquid, and proven collateral. Since Friday’s event was brutal, with many CEXs going down, we want to be transparent about outcomes on our side. During the peak volatility window, the protocol incurred approximately $3.6K in bad debt, while protocol revenue totaled over $36K from liquidations. According to our analysis, this bad debt was caused solely by the sharpness of the decline in price, without being caused by liquidity shortages, unsafe collateral, hidden leverage, or inefficient liquidations in terms of both participation and economic profitability. We want to assure you that no users will be penalized for this. The entire bad debt will be covered from protocol revenue. We are aware that some competitors in the ecosystem, after Friday’s event, reportedly incurred roughly 5x more bad debt on 10x lower liquidity and chose to socialize that loss across suppliers. In practice, this means every user who supplied USDC directly or through vaults was penalized, regardless of whether they had an active borrow. This is something we believe could be avoided through better protocol-design decisions and by ensuring that all code is audited and stress-tested prior to launch on Mainnet. But code is only one side of the coin; effective risk management is even more crucial. We encourage every protocol to strengthen its design, find edge cases, and ensure they can handle unfortunate events like the most recent one. User safety is paramount, and depositors should not bear losses caused by architectural weaknesses. The beauty of DeFi should be in the technology working for users, not against them. This is why we believe it is important to use Hatom!

On Friday, 10 October, Hatom encountered the heaviest stress test of its suite of products since going live. With the entire crypto ecosystem seeing over $19 billion in liquidations, this was one of the worst black swan events ever witnessed. We are proud to announce that our work over the years to build one of the most resilient products in DeFi has paid off. Hatom operated without interruption throughout the event, liquidating approximately $800K in collateral and proving once again that our design is built to protect users. During periods like this, when asset prices depreciate sharply in a short time, many users could be liquidated instantly if there were no mechanisms to counteract price manipulation. In moments like these, price integrity is everything. This is where our Price Aggregator and Oracle design protects users. How it works Our Aggregator collects quotes from multiple reputable exchanges and publishes a median. In parallel, our Oracle reads the DEX Safe Price, a time-weighted average that smooths short spikes. On every update, the Oracle compares the Aggregator median with the DEX Safe Price. If they are within tolerance, the new price is accepted. If they diverge beyond the first threshold, the Oracle returns the last valid price; if they exceed the final threshold, the Oracle is temporarily suspended and requires manual intervention to review and unpause. During Friday’s cascade, this logic filtered out exchange wicks and isolated prints. Sudden one-venue drops did not force instant liquidations because the Safe Price and the Aggregator median disagreed beyond tolerance, so the system used the last valid price until markets realigned. When the broader market moved in a sustained way, fresh submissions arrived and the Oracle advanced to a new fair price, allowing liquidations to proceed where they were truly warranted. The result is simple. Legitimate market moves are honored, and short-lived manipulation attempts are ignored. Users are protected from unfair liquidations, liquidators have clear rules, and the protocol maintains orderly operations even under extreme stress. We are glad to see many users protected during the crash by these mechanisms, and we are deeply saddened for those who were liquidated. Unfortunately, this is part of using leverage. Please remember that leverage is risky, and everyone using it should be aware of the consequences, especially the importance of using safe, liquid, and proven collateral. Since Friday’s event was brutal, with many CEXs going down, we want to be transparent about outcomes on our side. During the peak volatility window, the protocol incurred approximately $3.6K in bad debt, while protocol revenue totaled over $36K from liquidations. According to our analysis, this bad debt was caused solely by the sharpness of the decline in price, without being caused by liquidity shortages, unsafe collateral, hidden leverage, or inefficient liquidations in terms of both participation and economic profitability. We want to assure you that no users will be penalized for this. The entire bad debt will be covered from protocol revenue. We are aware that some competitors in the ecosystem, after Friday’s event, reportedly incurred roughly 5x more bad debt on 10x lower liquidity and chose to socialize that loss across suppliers. In practice, this means every user who supplied USDC directly or through vaults was penalized, regardless of whether they had an active borrow. This is something we believe could be avoided through better protocol-design decisions and by ensuring that all code is audited and stress-tested prior to launch on Mainnet. But code is only one side of the coin; effective risk management is even more crucial. We encourage every protocol to strengthen its design, find edge cases, and ensure they can handle unfortunate events like the most recent one. User safety is paramount, and depositors should not bear losses caused by architectural weaknesses. The beauty of DeFi should be in the technology working for users, not against them. This is why we believe it is important to use Hatom!