Chinese trader and founder of Equation News, Vida, announced on the X platform that he allegedly earned around $1 million from the hacking incident involving the BROCCOLI714 token.
Vida said it took advantage of the imbalance between spot and futures prices by detecting unusual price movements early.
According to Vida, when the price of BROCCOLI714 increased by more than 30% in 60 minutes, he immediately closed his previously established arbitrage positions. Originally worth $500,000 each, his hedge positions grew to $800,000 in the spot market and $500,000 in the futures market. By instantly closing all of its arbitrage positions, Vida made a profit of $300,000.
Vida then noticed a large buy order of $5 million with a buy depth of 10% on the BROCCOLI714 spot market on Binance. In contrast, there were only $50,000 worth of buy orders on the futures contract with the same depth. At that time, the market capitalization of BROCCOLI714 in the main order book was $40 million and the total buy orders were $26 million. According to Vida, this indicated either that a user account had been compromised or that there was a serious error in the market maker’s software.
Vida suspected that the $26 million in spot order book funds were used to inflate the spot price, thereby driving up the price of the futures contracts, and then exiting the futures market. He predicted that the price would continue to rise unless the hacker withdrew the spot buy orders.
During this process, Vida attempted to purchase BROCCOLI714 USDT perpetual futures contracts every 5-10 seconds through the trading terminal. Execution of these orders showed that the contract’s circuit breaker protection period had expired, creating liquidation risk. Seizing the opportunity, Vida added a long position of around $200,000 at an average cost of $0.046.
According to Vida, the hacker’s subsequent partial deactivation of the order book signaled the activation of the risk control unit. Vida began selling all of her long positions in the BROCCOLI714 spot and futures without worrying about the cost. By adding another $200,000 to his initial $200,000 position, he now has a total of $1.5 million in cash.
Vida later confirmed that the hacker had completely emptied the order book, and this time he opened a $400,000 short position at around $0.065, closing the position when the price fell to around $0.02.
However, it is important to remember that in the already high-risk cryptocurrency market, the use of leverage carries a very high probability that users will lose all their assets, including their capital.
*This does not constitute investment advice.
