Trade.xyz compensates traders after stock failure caused a US$60 million cryptocurrency long positio

Trading platform trade.xyz began to repay customers whose leveraged trading was cancelled due to erroneous orders from SK Hynix

A wrong order from SK Hynix in the South Korean stock market resulted in the liquidation of approximately US$60 million of long positions on Hyperliquid. Since then, trading platform trade.xyz has begun to make payments to relevant leveraged traders. This incident shows that a mistake in the traditional stock market can easily spread to the field of on-chain derivatives, especially at a time when tokenized stock perpetual contracts are gradually becoming an important part of cryptocurrency trading.

trade.xyz confirmed the payment on August 1, which resolved a pricing controversy that occurred on July 27. The core market of the incident was SK Hynix's USDC margin perpetual contract, which is not a niche product. According to Galaxy Research, as of July 30, the contract was the largest builder deployment market on Hyperliquid, with open interest values of US$638 million.

How a share in Seoul enters the chain order book

The chain reaction of the incident began in South Korea's traditional stock market. Galaxy Research expert Will Owens pointed out that when NextTrade's pre-market trading session began at 8 a.m. on July 28, SK Hynix's share was worth 1,272,000 won (about US$868), down about 30% from the previous price. Although the price hit the daily price limit set by the exchange, buyers immediately entered and the stock price rose to nearly 1.7 million won within minutes.

By this time, the cryptocurrency market has already felt the impact.

Trade.xyz's SKHYNIX sustainable product tracks the dollar value of a share of SK Hynix and switches to external pricing after NextTrade opens. The company said in a July 29 incident report that the $868 deal was valid and had been confirmed by multiple independent market data providers, indicating that the oracle was operating normally.

Why clearing affects cryptocurrency traders so much

trade.xyz calculates the token price by taking the average of three data sources and introducing a smoothing method to eliminate sudden fluctuations. According to Owens, the platform eliminates about 11% of the nearly 30% false fluctuations. However, there were still large residual fluctuations that led to liquidation.

The token price itself fell by about 18.7% almost instantaneously, while open interest fell from $481 million to $331 million in a matter of minutes.

According to Galaxy Research, approximately 960 accounts were cleared, with long positions ranging from US$57 million to US$80 million. As prices fell, profitable short positions were automatically deleveraging, and the 406 liquidated long positions were taken over by a backing address until that address was also liquidated.

Following the above incident, trade.xyz announced that the mark price had dropped from US$1,127.9 to US$917.25 at 23:01 UTC on July 27, which coincided with the opening time of NextTrade's pre-market trading session.

Actual coverage of claims

trade.xyz uses a reference exchange rate of US$1,115.5 to calculate refunds. As a result, traders who lose less than US$10,000 will automatically receive a refund, while traders who lose more than that amount will need to request a refund.

The company made it clear that the refund was a "one-time discretionary decision" rather than a regular obligation because the system itself was operating normally.

In addition, the company mentioned that it is accelerating improvements to its pricing strategy to cope with severe market conditions. When it comes to price issues, the company's orders will take precedence over transactions by other market participants.

Risks behind the Hyperliquid Builders Market Prosperity

This incident also highlights the importance of the Builders Market in the Hyperliquid ecosystem. Trade.xyz is a perpetual contract branch of the Tokenization Agreement Unit. It is the first market opened by Hyperliquid after the upgrade of HIP-3 on the main network in October 2025. Under the upgrade, any team pledging 500,000 HYPE (approximately US$27 million) can create its own perpetual contract market. According to Galaxy Research, trade.xyz accounts for more than 90% of HIP-3 open interest and nearly 98% of builder market transactions.

The market is also growing exponentially. HIP-3's share of all perpetual contract transactions in Hyperliquid has increased from just 2% at the beginning of the year to nearly half today. In the past 30 days alone, trading volume in the Builders Market has reached approximately US$98 billion, while open interest on HIP-3 has reached approximately US$3.6 billion.

This incident demonstrates that the pricing failure of a single equity-linked perpetual contract is no longer an isolated case. It could affect a large part of the derivatives market across the chain.

The timing of the incident adds to the complexity.

SK Hynix faced huge selling pressure that week, with its share price falling 14.65% to 1.55 million won. Shares fell further after quarterly results were announced the next day. According to Galaxy Research, the plunge triggered a circuit breaker for multiple consecutive trading days for the first time in South Korean market history, providing evidence for the initial decline before the wrong trade was identified.