Trade.xyz, a crypto trading venue built on Hyperliquid, is trying to pull round-the-clock price discovery into markets traditionally defined by exchange hours, benchmark prices and recognized trading venues. Since October, its perpetual contracts tied to crude oil, precious metals, stock indexes and pre-IPO companies such as SpaceX have generated about $500 billion in trading volume, more than 99% of total activity in Hyperliquid’s HIP-3 third-party market system.
That performance has pushed Trade.xyz and Hyperliquid toward a larger goal: convincing US regulators to allow pre-IPO perpetual contracts into the American market. They argue that such products can create fuller price discovery before a company officially lists, potentially changing how the IPO process works.
Trading continued while legacy oil markets were closed
On the last Saturday of February, when the US and Israel launched airstrikes on Iran, major global oil markets were shut. Crude prices, however, did not stop moving.
On Trade.xyz, traders spent the weekend buying and selling an on-chain oil derivative. By the time traditional futures markets reopened, on-chain traders had already spent hours pricing in the possible impact of the conflict.
For decades, modern finance has revolved around a shared structure: approved venues, fixed trading hours and benchmark prices used as reference points elsewhere. Crypto markets break from that pattern. They run 24/7, move across borders with relative ease and are increasingly filling gaps left when traditional exchanges close.
Trade.xyz has become a test case for how far that shift might go.
A small team built multiple traditional-asset perpetual markets in less than a year
The startup, with a team of roughly a dozen people, rolled out perpetual contracts linked to crude oil, precious metals, stock indexes and pre-IPO companies including SpaceX in less than a year.
Hyperliquid currently operates outside the US and does not formally open its platform to US traders. The same limitation applies to Trade.xyz. Still, President Donald Trump, who supports the crypto industry and whose family has broad involvement in related businesses, said last week that regulators are studying how Hyperliquid could enter the US market.
Unlike traditional futures that settle on a fixed date, perpetual contracts do not expire. Investors can hold positions over longer periods without repeatedly rolling expiring contracts into new ones. These products can also carry very high leverage. Some platforms allow investors to borrow $100 for every $1 posted.
Walter Li, a former Royal Bank of Canada ETF trader who now mainly runs his personal trading portfolio through Trade.xyz, said there is always “somewhere that’s in a bull market.”
He added that if a popular asset class has not yet been brought on-chain, Trade.xyz can build a market for it.
Oil contracts tracked sentiment, but not perfectly reopened futures
Bloomberg’s analysis of Trade.xyz contracts during the US-Iran conflict found that, during relatively calm periods, those contracts broadly tracked moves in traditional oil prices. When legacy markets were shut, they also reflected trader sentiment in real time.
But during some of the most volatile moments of the conflict, price swings in Trade.xyz contracts were smaller than the moves seen after traditional markets resumed trading.
Trade.xyz uses a mechanism called “price discovery boundaries” to limit extreme price moves when markets become highly volatile. As the venue has matured, it has gradually loosened those limits.
A Trade.xyz spokesperson said the purpose of the mechanism is to allow price discovery while preventing weekend-market manipulation.
The participants and liquidity sources in those weekend contracts are not the same as those in the traditional crude futures market used for comparison. Several professional oil traders said they would treat such contracts as indicators of sentiment, but not necessarily as tools for predicting reopening prices in Brent crude or West Texas Intermediate.
Unit Labs built the platform, while Paradigm investment talk remains unconfirmed
Trade.xyz was developed by Unit Labs, whose team members mostly use pseudonyms. According to people familiar with the matter, Unit Labs received backing from venture firm Paradigm more than a year ago. Spokespeople for both Unit Labs and Paradigm declined to comment on the investment.
The platform’s reach has since moved deeper into traditional financial markets.
In March, Trade.xyz and S&P Global launched what they described as the first officially licensed perpetual contract tied to the S&P 500 Index. That product now has about $450 million in open interest. Trade.xyz also offers a perpetual contract that tracks the Nasdaq 100.
The largest HIP-3 markets are all developed by Trade.xyz and are tied to the S&P 500, SK Hynix shares and gold. Combined open interest across those three markets is about $1.2 billion.
Round-the-clock trading is creating new regulatory friction
Before Hyperliquid introduced HIP-3, perpetual contracts linked to assets such as equities already existed. HIP-3, however, significantly accelerated the shift toward globally distributed, around-the-clock trading.
Yesha Yadav, a Vanderbilt Law School professor who focuses on digital asset research, said Wall Street regulators that were used to markets trading only on weekdays now “have to confront the migration of liquidity to other markets, and the possibility of price discovery occurring in offshore markets, especially when traditional markets are closed.”
Collins Belton, Unit Labs’ chief operating officer and general counsel, said at an industry conference in July that the sector is dealing with an administration that is “very willing to be supportive.” He said he had expected more concern from institutions and regulators.
That policy shift has also produced a clash involving CME Group, the world’s largest derivatives exchange.
In June, CME sued the US Commodity Futures Trading Commission and its chair, Michael Selig, over guidance that was seen as clearing a path for US platforms to offer crypto perpetual contracts.
The CFTC said at the time that the lawsuit was “without merit.”
SpaceX became a live test for pre-IPO pricing
Unlike oil contracts, pre-IPO company contracts address a different market gap.
Companies such as SpaceX do not have continuously traded public share prices before listing. Their valuations are usually inferred from financing rounds and secondary-market trades, which may be separated by months.
Perpetual contracts introduced by Trade.xyz and its rivals do not give traders ownership of the underlying company’s shares. Because those companies are not yet public, there is also no listed security that can anchor contract pricing through direct arbitrage.
The role of those contracts is to publicly reflect how traders value a company before it begins trading on an exchange.
So far, Trade.xyz’s pre-IPO perpetuals have broadly foreshadowed opening performance in the related stocks. The report said that in several large listings this year, including SpaceX and SK Hynix, the contracts indicated ahead of time that shares would begin trading above the offering prices set by underwriting banks.
David Schamis, chief executive officer of Hyperliquid Strategies, a firm focused on accumulating Hyperliquid’s native token, said: “A group of market participants who have never actually seen this company’s stock came closer to the opening price than the underwriting syndicate that spent two weeks marketing the deal.”
In an Aug. 18 letter to Securities and Exchange Commission Secretary Vanessa Countryman, Trade.xyz and a lobbying group linked to Hyperliquid cited the prior performance of pre-IPO perpetuals and argued that the products can provide public market signals before a listing, improving the IPO pricing process.
High leverage has already amplified dislocations
Extreme leverage has also exposed weaknesses in the market.
In mid-June, a few days after SpaceX shares began trading, a short squeeze in the Trade.xyz perpetual tied to Elon Musk’s rocket and satellite company briefly pushed its implied valuation to $3 trillion, above Amazon or Microsoft at the time.
More than $50 million in short positions were automatically liquidated.
About a month later, the same market structure produced an unusually large move in the opposite direction in the Trade.xyz perpetual linked to SK Hynix.
After the contract fell 20%, holders were forced to close nearly $60 million in long positions. Earlier, SK Hynix shares had dropped as much as 30% in premarket trading. The move was triggered by what appeared to be an anomalous single-stock trade on the Nextrade market.
Trade.xyz said it would compensate users for losses caused by the abnormal portion of the SK Hynix price swing.
The platform said: “In the future, we will continue improving the pricing system to handle extreme events.”
Liquidity is becoming the moat
To launch a perpetual market on Hyperliquid, an operator must stake 500,000 HYPE tokens, worth about $39 million at current prices.
Some early entrants have already shut down. At the same time, new competitors backed by firms including Multicoin Capital and Hyperion DeFi are targeting markets where Trade.xyz is not yet dominant.
Skew, which is backed by Hyperion, plans to focus on pricing data that is “hard to replicate,” according to Hyperion chief executive officer Hyunsu Jung, who said that would be the platform’s differentiating factor.
Trade.xyz’s liquidity, however, remains difficult to overcome. That edge comes from launching new markets earlier and charging less than rivals.
Trade.xyz perpetuals posted $107 billion in total trading volume in July, but data compiled by DefiLlama show annualized revenue at current levels is only about $27 million.
Pratik Kala, portfolio manager at digital-asset hedge fund Apollo Crypto, said: “I don’t even look at the other markets. Liquidity is what matters most, and the others are very poor. If I want to place even a $500,000 order, the bid-ask spread widens quickly.”
Can stress spill back into traditional finance?
Yadav said one potential risk from Trade.xyz’s rapid growth is that large liquidations like those seen in SpaceX and SK Hynix perpetuals could eventually transmit stress into traditional markets.
In the worst case, she said, a weekend market crash could create a “balance-sheet crisis” for institutions that also hold traditional financial assets.
“By Monday morning, will they still have enough capital to keep trading in traditional markets? That’s the danger that could emerge in the future,” she said.
Walter Li worries less about that than about missing trades while asleep.
He said he used ChatGPT to design a monitoring system that scans activity across Trade.xyz markets and sends alerts when any 24/7 perpetual contract becomes more active.
“If you build the right monitoring system and you really know what you’re looking for, you don’t need to sit at the trading desk all the time,” Li said.