trade.xyz said on Aug. 1 that it has started reimbursing traders affected by a sharp pricing event in its SK hynix perpetual market on Hyperliquid, after an anomalous pre-market stock print in South Korea helped trigger roughly $60 million in long liquidations.

The episode began on July 27 and centered on a USDC-margined SK hynix perpetual that was, as of July 30, the largest builder-deployed market on Hyperliquid with $638 million in open interest. According to the incident report and market estimates cited by the company, the move erased leveraged long positions across about 960 accounts even though the external price feed itself appeared to function as intended.

A traditional-market trade rippled into crypto

The disruption traced back to South Korea’s conventional equity market, where one SK hynix share changed hands at about $868 during the NextTrade pre-market session, roughly 30% below the previous close. Within minutes, the price rebounded to nearly 1.7 million won, but the initial print had already fed into related crypto markets.

The xyz: SKHYNIX perpetual is designed to track the dollar value of one SK hynix share and to switch to external pricing once NextTrade opens. Trade.xyz said the low trade was valid and was confirmed by multiple data providers, meaning the oracle followed its rules rather than malfunctioning.

Why the move caused so many liquidations

Trade.xyz said its mark price is derived from three data sources and includes smoothing intended to reduce abrupt swings. That mechanism reportedly neutralized around 11% of the distorted move, but it was not enough to prevent forced closures once the market repriced.

The mark price still fell by about 18.7% almost immediately. Open interest dropped from $481 million to $331 million within minutes. Galaxy Research estimated that around 960 accounts were liquidated, with long positions totaling between $57 million and $80 million.

As the market fell, profitable short positions were also deleveraged. The report said 406 long liquidations were absorbed by a backstop address before that address itself was liquidated.

How the reimbursement program works

The company said refunds are being calculated using a reference rate of $1,115.5. Traders whose losses were below $10,000 are being reimbursed automatically, while those with larger losses must submit an application.

Trade.xyz described the payouts as a one-time discretionary measure, not a permanent compensation policy. The platform’s position is that the broader pricing system operated correctly, even though the resulting market impact was severe for traders caught in the move.

What the incident says about builder markets

The event underscores the risks that come with tokenized-stock perpetuals, where price shocks in traditional markets can be transmitted directly into onchain leveraged products. That exposure may become more significant as Hyperliquid’s builder-market segment expands.

Trade.xyz is a perpetual futures venue of the tokenization protocol Unit and was the first market launched under Hyperliquid’s HIP-3 framework, which lets teams that stake 500,000 HYPE create their own perpetual markets. According to the source article, trade.xyz has represented more than 90% of HIP-3 open interest and nearly 98% of builder-market trading activity.

The next confirmed step is operational rather than legal or regulatory: trade.xyz said it is accelerating work on pricing methods for stressed conditions, particularly when its orders may be prioritized over trades by other market participants.

Source: Cryptopolitan