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FollowingTrade.xyz will pay SK Hynix for its extraordinary liquidation losses on Hyperliquid
Trade.xyz said it will pay for the liquidation losses caused by the sudden collapse of its SK Hynix Perpetual Contract on July 27. The incident affected nearly 1000 leveraged positions on Hyperliquid.
Looking back, the marked price of the contract plummeted from US$1,127.90 to US$917.25. According to preliminary analysis, this fluctuation triggered a large-scale liquidation chain reaction, resulting in positions of approximately US$57 million being liquidated and an actual loss of approximately US$17.3 million.
The team behind the Hyperliquid HIP-3 operator said the price originated from a deal executed by multiple independent data providers. Its oracle was tracking an external trading venue that the platform described as South Korea's main pre-market trading venue.
According to them, the oracle operates according to existing specifications. However, the resulting marker price triggered liquidation before the underlying market recovered from this isolated deal price.
Trade.xyz outlined that they will pay for liquidation losses caused by this unusual event. The platform will soon announce eligibility requirements and expects to complete payment distribution in the next few days.
The company also described the compensation as a one-time discretionary measure. It stressed that this decision does not guarantee that compensation will be paid in the event of similar incidents in the future.
Theannouncement also mentioned the direct financial impact faced by traders, but did not change the way leveraged positions are automatically closed when the oracle price falls.
In addition, the company plans to strengthen its pricing system to respond to similar tail risk events. The scope of the review will cover the platform's reliance on external trading venues and the assumptions used in constructing markup prices.
The team said it would also consider giving higher weight to trading activity on its own order book.
