Trade.xyz issued a statement on X on July 29 announcing that it will proactively cover liquidation losses caused by the SK Hynix (SKHYNIX) perpetual contract pin event. It said this is a one-time discretionary decision and does not guarantee that it will take similar action in the future. In this incident, liquidation losses were about $57.4 million. Trade.xyz explained that the price drop stemmed from an abnormal order during pre-market trading on the Korean alternative stock trading platform NXT.
Technical background of the SK Hynix contract pin event: abnormal NXT pre-market printing
Based on Trade.xyz’s statement and related reports, the technical chain of this incident is as follows: NXT (a Korean alternative stock trading platform launched in March 2025, trading hours from 8:00 AM to 8:00 PM local time) recorded an SK Hynix order of 1,272,000 KRW during the pre-market trading session. SK Hynix’s closing price on the previous trading day was 1,785,000 KRW, implying a drop of 28.7%.
Trade.xyz’s SKHYNIX oracle tracks NXT data, converts KRW to USD, and forms the mark price. The contract’s “discovery boundary” sets the maximum allowable intraperiod volatility at 10% (allowing one reset). After comprehensive calculation, the lower bound is 19% below the session reference price. The actual drop of 17.9% stayed within this cap, and the guardrail absorbed nearly 11 percentage points of volatility.
Details of Trade.xyz’s statement on taking on the losses
According to the on-chain analysis published by MarketsAlpha and Trade.xyz’s statement, the financial figures for this incident are as follows:
Forced liquidation accounts: 960 long accounts
Nominal liquidation size: about $57.4 million
Actual loss for long accounts (MarketsAlpha data): about $17.3 million
Deleveraging of short accounts (MarketsAlpha data): 100 accounts profited about $10.8 million (then automatically deleveraged)
Trade.xyz 500,000 HYPE collateral: about $27.4 million at Tuesday’s price (verifiers can vote to burn)
HYPE token: close to $54.82 on Tuesday, down about 9%
Trade.xyz said that eligibility requirements will be announced as soon as possible, with distribution expected to be completed within the next few days. It also noted that neither Hyperliquid nor Trade.xyz made an official response to the MarketsAlpha data above.
FAQ
How did the SK Hynix SKHYNIX perpetual contract pin event happen?
According to Trade.xyz’s statement, at 23:01 UTC on July 27, NXT, a Korean alternative trading platform, had an abnormal SK Hynix order of 1,272,000 KRW in its pre-market session (previous day close: 1,785,000 KRW). Trade.xyz’s oracle tracked this data to form the mark price, which fell from $1,127.9 to $917.25 (-17.9%), triggering forced liquidation for 960 accounts.
Why did Trade.xyz proactively assume liquidation losses?
According to Trade.xyz’s July 29 statement, although the oracle system was operating normally by design, given that market integrity is the core value—and “user trust has been earned and will continue to be earned”—the company decided to cover the liquidation losses caused by this abnormality through a one-time discretionary decision. It explicitly said this does not guarantee taking similar action in the future.
Can Trade.xyz’s collateral staking of 500,000 HYPE tokens be used to compensate affected users?
According to the original text, the collateral for the HIP-3 rule is burned rather than distributed to affected users. Even if the full penalty is applied, it cannot recover losses for the 960 liquidated accounts because the allocation is to burning rather than compensation. Verifiers can take action during the 7-day period to cancel the staking queue.
