Decentralized perpetuals exchange Trade.xyz said it will reimburse traders liquidated when its SK Hynix perpetual futures contract crashed 19% late on Monday, attributing the move to a single executed trade on a thin Korean pre-market venue rather than any system failure.
According to the company, the mark price — the reference figure used to calculate profits, losses and liquidations — fell from about $1,128 to $917 at 23:01 UTC on July 27. The print came from an executed trade relayed by multiple independent data providers, with the data point feeding the contract tracking what Trade.xyz called the primary Korean pre-market venue.
"The oracle system worked as intended according to its specification," the company said, adding that nothing malfunctioned and nobody manipulated anything based on the evidence so far. The oracle, a tool that fetches external data into a blockchain-based system, faithfully reported a real trade on a market thin enough that a single order moved the price nearly a fifth, triggering liquidations accordingly.
Trade.xyz said covering the losses is a one-time discretionary decision rather than a commitment to repeat the practice, with eligibility rules to follow and payouts expected within days.
Reassessing Price Sources
The company said it is revisiting its assumptions about external venues and will give more weight to price formation on its own orderbooks, "which carry increasingly meaningful depth and signal in relation to external sources."
Research into crypto market structure has found a similar pattern in bitcoin and ether, where perpetual futures often lead spot markets rather than follow them, and pre-IPO perpetuals priced SpaceX's first trading day more accurately than the bookbuild that set the offering.
The crash printed hours before Korean equities began a record two-day decline, and SK Hynix shares fell about 17% on Wednesday after quarterly profit rose 557% and still missed estimates.
