Trade.xyz to Reimburse $60 Million in Liquidations After SK Hynix Perpetual Flash Crash

Trade.xyz said it will cover roughly $60 million in trader losses after its SK Hynix perpetual futures contract crashed 19% late Monday. The company said its price oracle worked exactly as designed, relaying a real trade from a thin pre-market venue in Korea that briefly distorted the contract’s mark price.

A Single Trade Moved the Market Nearly 20%

Trade.xyz operates its SK Hynix perpetual market on Hyperliquid under HIP-3, a framework that lets independent builders list and manage their own perpetual contracts while Hyperliquid’s underlying infrastructure handles execution, margining, and liquidations.

The contract’s mark price, the reference figure used to calculate profits, losses, and forced liquidations, fell from about $1,128 to $917 at 23:01 UTC on July 27, according to the company. Multiple independent data providers relayed the same executed trade, which came from what Trade.xyz called the primary Korean pre-market venue for SK Hynix shares.

The venue’s thin liquidity meant a single order moved the price by nearly a fifth, triggering liquidations across positions tied to the contract.

Trade.xyz Says Its Price Oracle Functioned as Designed

“The oracle system worked as intended according to its specification,” Trade.xyz said in a statement. The company said nothing malfunctioned and it has seen no evidence so far that anyone manipulated the market. 

The oracle, a tool that feeds external price data into a blockchain-based system, faithfully reported an actual trade on a market where liquidity was too thin to absorb it without a large price swing.

A One-Time Fix, Not a Standing Policy

Trade.xyz said covering the losses is a discretionary, one-time decision rather than a commitment to reimburse traders after future incidents. Eligibility rules for the reimbursement have not yet been published, and the company said payouts are expected within days.

The more significant change is how Trade.xyz plans to source prices going forward. The company said it is revisiting its reliance on external venues and will give more weight to its own order books, which it said “carry increasingly meaningful depth and signal in relation to external sources.”

Part of a Broader Pattern in Crypto Perpetuals

Research into crypto market structure has found that perpetual futures on Bitcoin and Ether often lead spot prices rather than follow them. A similar dynamic played out when pre-IPO perpetuals tracking SpaceX priced the company’s first trading day more accurately than the traditional bookbuilding process used for its offering.

The SK Hynix flash crash also arrived just hours before a sharp, two-day decline in Korean equities. SK Hynix shares fell about 17% on Wednesday after the company’s quarterly profit rose 557% year-over-year but still missed analyst estimates.

It remains unclear whether Trade.xyz’s shift toward its own order-book pricing will prevent similar dislocations. The outcome will depend on how much liquidity the company builds on its own platform relative to the external venues it has relied on until now.