The trading platform trade.xyz has started to repay traders whose leveraged trades were cancelled after a single wrong SK hynix order in South Korea, which later led to around $60 million in long liquidations on Hyperliquid. This situation shows how one mistake in the traditional stock market can easily carry over to the world of on-chain derivatives, especially now that tokenized-stock perpetuals are becoming a bigger part of crypto trading.
The payouts, confirmed by trade.xyz on Aug. 1, resolve a pricing incident that unfolded on July 27. The market at the center of the event, a USDC-margined SK Hynix perpetual, was far from niche. According to Galaxy Research, it was the largest builder-deployed market on Hyperliquid, with $638 million in open interest as of July 30.
How one share in Seoul reached an onchain order book
The chain of events started in South Korea’s conventional stock market. Galaxy Research expert Will Owens stated that when the pre-market time slot of NextTrade started at 8:00 in the morning on July 28, one share of SK hynix was worth 1,272,000 won (around $868), which is around 30% less than the previous price. Although this price met the daily limit imposed by the stock exchange, buyers entered the market, and the price started to rise to almost 1.7 million won within a couple of minutes.
By then, the reaction had already reached the cryptocurrency markets.
The xyz: SKHYNIX perpetual product of trade.xyz tracks the dollar value of one share of SK hynix and switches to outside pricing once NextTrade opens. The company stated in its incident report on July 29 that the $868 transaction was valid, having been confirmed by different independent market data providers, thus demonstrating a proper operation of the oracle.
Why the liquidations hit crypto traders so hard
trade.xyz calculates its mark price by considering the average of three sources of data and introduces a smoothing method to eliminate sudden fluctuations. According to Owens, the service neutralized about 11% of the almost 30% incorrect movement. Still, there was much more left that caused liquidation.
The mark price itself dropped about 18.7% almost immediately, while the open interest fell within minutes from $481 million to $331 million.
According to Galaxy Research, approximately 960 accounts were liquidated with long positions amounting from $57 million to $80 million. As prices dropped, profitable short positions were automatically deleveraged, and 406 liquidated long positions were taken up by a backstop address until its liquidation.
Following the mentioned events, trade.xyx announced that the mark price had decreased from $1,127.9 down to $917.25 by 23:01 UTC on July 27, which coincided with the opening of NextTrade’s pre-trade session.
What the distributions actually cover
The refunds were calculated by trade.xyz using the reference rate of $1,115.5. As such, traders whose losses did not exceed $10,000 were entitled to automatic refunds, while those whose losses were larger had to apply for them.
The company makes it clear that refunds are a “one-time discretionary decision” and not a regular obligation, since everything went right with the system.
In addition, the company mentioned that it is speeding up efforts to improve its pricing strategy in tough market conditions where, in the matter of price, the orders of the company are prioritized over trades made by other market players.
The stakes for Hyperliquid’s builder-market boom
The situation also emphasizes the significance of builder markets within Hyperliquid’s ecosystem.
trade.xyz, a perpetual futures branch of tokenization protocol Unit, was the first market to open under Hyperliquid’s HIP-3 enhancement, which was rolled out in mainnet in October 2025. Under the upgrade, any team that stakes 500,000 HYPE (around $27 million) can create its own perpetual futures markets.
trade.xyz has made up over 90% of HIP-3 open interest and almost 98% of builder market trades, as per Galaxy Research.
The market has also grown exponentially. From a mere 2% earlier in the year, HIP-3 now accounts for almost half of all Hyperliquid’s perpetual trading transactions. The volume on builder marketplaces alone is around $98 billion for the last thirty days, while HIP-3’s open interest has reached approximately $3.6 billion.
The incident illustrates that a pricing glitch of a single stock-linked perpetual is no longer an isolated case. It can influence a large part of the entire onchain derivatives market.
The timing added to the perplexity of the case. SK hynix faced significant selling pressure that week, sliding down by 14.65% to reach 1.55 million won. It further declined after the announcement of its quarterly results the next day. The crashes triggered circuit breakers for several trading days for the first time in the history of the Korean market, according to Galaxy Research, thus giving credence to the initial decline prior to the identification of the erroneous transaction.
