Trade.xyz to cover SK Hynix perp liquidation losses tied to price anomaly

Trade.xyz, an operator of onchain perpetual markets on Hyperliquid, said it will cover eligible liquidation losses after a price anomaly hit its contract tracking SK Hynix, a South Korean chipmaker and producer of high-bandwidth memory for artificial intelligence.

Trade.xyz said the SKHYNIX contract’s mark price fell from $1,127.90 to $917.25 at 23:01 UTC on Monday after an executed trade was relayed by multiple independent data providers. Eligibility requirements will be announced soon, with distributions expected in the coming days.

The SK Hynix contract ranks among Hyperliquid’s most active markets. On Wednesday, Hyperliquid data showed the contract had generated over $1.5 billion in 24-hour volume and held nearly $600 million in open interest at the time of writing.

Trade.xyz said its oracle was tracking the external venue used as the primary South Korean pre-market and had “worked as intended according to its specification.” It acknowledged traders’ frustration and described the reimbursement as a “one-time discretionary decision,” adding that it would review how prices are formed during extreme market events.

The platform did not disclose how many traders would qualify for reimbursement or the total amount it expects to distribute. 

SK Hynix trading chart. Source: Hyperliquid

How the anomaly reached the perpetual market

Trade.xyz said the sharp move originated from an executed transaction on an external market rather than its own order book. Its SK Hynix oracle tracks the US dollar value of one SKHX common share by converting the underlying Korean won price using the prevailing exchange rate, according to its documentation. 

The external print fed into the oracle and contributed to the contract’s mark-price move. Hyperliquid uses the mark price to value positions for margin purposes and determine when leveraged positions should be liquidated.

The platform said it is considering giving more weight to prices formed on its own order books, which it said now provide meaningful liquidity and market signals. 

Related: Onchain commodity trading is here to stay, but liquidity remains an issue

Trade.xyz operates under Hyperliquid’s HIP-3 framework, which allows builders to launch perpetual contracts tied to assets with external price feeds. 

The platform accounted for more than $22 billion of HIP-3’s first $25 billion in cumulative volume and later launched an officially licensed S&P 500 perpetual using S&P Dow Jones Indices data.

Magazine: How Hong Kong is turning tokenized bonds into real market infrastructure