Uzbekistan has established a special crypto mining zone across Karakalpakstan, introducing tax incentives, expanded power options, and a dedicated regulatory framework to attract licensed mining companies.

Under a presidential resolution that took effect on April 20, Uzbekistan has designated the entire Republic of Karakalpakstan as the Beshkala Mining Valley, creating a regulated environment for cryptocurrency mining while linking the initiative to the region’s economic development plans.

The resolution allows licensed mining companies operating within the zone to use electricity from the national grid, renewable energy sources such as solar power, and hydrogen-based power generation. It also creates a legal pathway for miners to sell their digital assets through Uzbekistan’s licensed crypto exchanges, foreign trading platforms, direct agreements, or by converting them into other liquid crypto assets.

Companies participating in the program must transfer revenue from crypto asset sales to bank accounts held in Uzbekistan, a requirement intended to keep transactions within the country’s regulated financial system while maintaining oversight of mining-related income.

Uzbekistan has expanded the crypto mining framework

Only legal entities registered in Karakalpakstan will qualify for resident status within the Beshkala Mining Valley. Businesses seeking to operate there must first obtain resident status through the zone’s directorate before applying for a crypto mining license issued under the supervision of the National Agency for Perspective Projects, the authority responsible for regulating the sector.

A dedicated directorate will oversee the management of the mining valley and process applications from prospective operators. Besides regulating mining activity, the administration will supervise implementation of the project’s development policies across the region.

Mining companies will also be permitted to reuse excess heat generated by their equipment for greenhouse farming on agricultural land, creating an additional use for energy produced during mining operations.

The resolution exempts income earned from mining activities from taxes and mandatory payments until Jan. 1, 2035, providing one of the main financial incentives for companies considering investment in the zone.

Crypto miners can use more than solar power

The latest framework also changes part of Uzbekistan’s previous mining policy.

Earlier licensing rules introduced in October 2023 required miners to obtain official authorization before operating and largely limited mining activities to electricity generated from solar power, except where legislation provided otherwise.

Under the new framework for the Beshkala Mining Valley, approved residents can instead draw power from the unified electricity grid alongside renewable energy and hydrogen-based generation. The updated approach gives operators more flexibility while preserving the country’s licensing requirements for crypto mining businesses.

Uzbek law continues to define crypto mining as the computational process used to maintain distributed ledgers by validating blocks and preserving network integrity. The activity remains restricted to legal entities rather than individual miners.

Mining revenue will remain inside Uzbekistan

Alongside operational rules, the government has tightened financial requirements governing proceeds from crypto mining.

Residents of the mining valley may sell mined digital assets through domestic exchanges, overseas trading platforms, direct contracts, or by exchanging them for other liquid crypto assets. Regardless of where the assets are sold, proceeds must ultimately be transferred to bank accounts located in Uzbekistan.

The framework is intended to keep mining-related revenue within the domestic banking system while allowing companies to access international cryptocurrency markets.

According to an earlier presidential decree signed on April 17 and effective from April 20, residents of the mining zone are also required to pay a monthly fee equal to 1% of mining income to the zone’s directorate, even as they benefit from tax exemptions running through the beginning of 2035.

Karakalpakstan remains central to investment plans

Creation of the Beshkala Mining Valley forms part of Uzbekistan’s ongoing efforts to attract investment into Karakalpakstan, a region that has remained a priority for economic development initiatives.

Government plans have linked the mining zone with improvements in regional living standards while encouraging more efficient use of renewable energy resources through regulated crypto mining projects.

The mining initiative follows another technology-focused program launched for Karakalpakstan in 2025, when Uzbekistan approved a separate tax-free zone for artificial intelligence and data center projects. That program offered discounted electricity prices and tax incentives to foreign investors, with reports stating that investments of at least $100 million could qualify for exemptions from taxes and customs duties until 2040.

Officials said the AI and data center project was designed to attract more than $1 billion in foreign investment by 2030, placing the new crypto mining zone within a series of long-term development initiatives targeting the region.

Russia’s Federal Security Service (FSB) charged Telegram founder Pavel Durov with aiding terrorist activity and placed him on an international wanted list, the agency said Wednesday.

The FSB accused Telegram of failing to remove channels, chats and bots allegedly used by Ukrainian intelligence and extremist groups to coordinate sabotage, attacks and cyber fraud inside Russia, according to Interfax.

Durov charges carry a sentence that could lead to life imprisonment. The FSB did not say whether Russia had requested an Interpol Red Notice, which would not, in itself, constitute an international arrest warrant.

The case escalates an investigation opened in February after Russia began restricting Telegram’s operations. The platform has been fined more than 100 million rubles ($1.25 million) this year, primarily for failing to remove content prohibited under Russian law, Interfax reported.

Telegram is one of crypto’s largest distribution platforms, hosting project communities, trading groups, bots and blockchain-based Mini Apps.

The UK Financial Conduct Authority has identified cross-border payments as the strongest practical application for stablecoins after gathering feedback from banks, payment companies and crypto firms during its Stablecoin Sprint.

According to the UK Financial Conduct Authority, participants in its Stablecoin Sprint said stablecoins currently offer the clearest value in cross-border payments, especially in markets where access to U.S. dollars remains limited, while consumer adoption for everyday retail payments in the UK is likely to develop more slowly because existing payment systems already provide fast and low-cost transactions.

The regulator published the findings from the policy sprint, held in March 2026, alongside insights from a trade finance roundtable conducted in May. Around 75 representatives from banks, payment service providers, merchant acquirers, fintech companies, infrastructure providers, stablecoin issuers and industry groups attended the two-day event, while another 30 participants later discussed programmable payments in trade finance.

The exercise forms part of the FCA’s work on stablecoin payment regulation after it finalized rules for UK-issued stablecoins on June 30. Those rules require issuers to fully back stablecoins with reserve assets and redeem tokens at par, while the regulator said feedback gathered during the sprint will continue shaping future policy for stablecoin payments.

Stablecoin payments offer the strongest case in cross-border transfers

During the discussions, participants agreed that cross-border transfers present the strongest commercial opportunity for stablecoins because they can reduce settlement delays and improve access to dollar-based payments in countries where banking infrastructure remains limited.

The FCA said participants drew a distinction between emerging markets and established payment corridors. In mature markets where international payment services are already efficient and relatively inexpensive, firms considered the advantages of stablecoins less pronounced.

Domestic retail payments generated a different assessment. Participants told the regulator that UK consumers have little reason to replace existing payment methods because bank transfers and card payments are already widely available, inexpensive and completed quickly.

Businesses, however, could still benefit from stablecoin payments. According to the FCA, merchants identified lower transaction costs and faster settlement as potential advantages, particularly where payment delays or intermediary fees remain an issue.

Trade finance discussions held in May also examined programmable payments, with participants exploring how smart contract-based settlement could support commercial transactions through automated payment execution.

The latest findings build on the FCA’s wider crypto regulatory framework published on June 30, which established the next phase of the UK’s digital asset regime.

Under those rules, firms seeking to conduct regulated crypto activities will be able to apply for authorization from Sept. 30, 2026, before the full regime takes effect on Oct. 25, 2027. The framework covers trading platforms, custodians, staking providers and stablecoin issuers, while existing anti-money laundering registrations will not automatically transition into the new licensing system.

The FCA also adjusted part of its stablecoin framework after industry feedback. Final rules lowered the proposed capital requirement for stablecoin issuers to 1% of issued value from an earlier 2% proposal, with Executive Director for Payments and Digital Finance David Geale previously saying the regulator revised the requirement after reviewing evidence submitted by industry participants.

Most sterling-denominated stablecoins will remain under FCA supervision, while tokens considered systemically important would fall under oversight by the Bank of England.

Industry feedback has influenced earlier UK proposals

The Stablecoin Sprint findings follow several months of consultation between regulators and industry participants over how Britain should supervise fiat-backed digital assets.

In May, the Bank of England said it was reviewing parts of its proposed stablecoin framework after digital asset firms argued that reserve requirements and temporary holding limits could reduce the commercial viability of pound-backed stablecoins.

The central bank had proposed requiring issuers to keep at least 40% of reserves in non-interest-bearing deposits at the Bank of England while introducing temporary limits on individual and corporate holdings during an initial rollout period.

According to comments reported at the time, industry participants argued that ownership caps would be difficult to enforce across wallets and trading venues, while reserve requirements that generated no interest income could materially reduce issuer profitability.

Bank of England Deputy Governor Sarah Breeden said the central bank was reassessing whether those temporary holding limits remained necessary and whether reserve requirements should be adjusted.

The policy debate has also extended beyond domestic regulation. Bank of England Governor Andrew Bailey warned in May that the international growth of dollar-backed stablecoins could require closer coordination between regulators and described future discussions with the United States over global standards as a likely point of negotiation.

FCA also links stablecoins with programmable finance

Outside payments policy, the FCA has recently connected stablecoins with emerging artificial intelligence systems capable of carrying out financial decisions without continuous human involvement.

In its July review on the future of retail financial services, the regulator said autonomous AI agents managing payments, investments and savings accounts could increase demand for programmable digital money because conventional banking infrastructure may struggle to support machine-speed financial transactions.

The report identified stablecoins and tokenized bank deposits as payment infrastructure capable of supporting automated settlement through distributed ledger technology while maintaining that firms cannot transfer legal accountability to AI systems.

Every dollar Robinhood Chain earns, a tenth goes to a DAO treasury controlled by strangers. The arrangement has been covered a dozen times as good news for Arbitrum’s token.

Nobody has asked the other question: what a licensed brokerage that spent a decade removing intermediaries bought by becoming a tenant.

There is a particular irony in a company whose entire founding pitch was the removal of intermediaries acquiring one. Robinhood spent a decade telling retail investors that the layers between them and the market were extractive, that commissions were a tax on participation, and that the right architecture was fewer parties taking a cut. On July 1 it launched its own blockchain, the most complete expression of that philosophy available: a settlement layer it controls, sequencing it operates, and fee revenue it collects. And under the terms of the technology stack it chose, a tenth of what that chain nets goes to somebody else. Specifically, 8% goes to a treasury controlled by holders of a governance token, and 2% funds a developer guild, both under an arrangement called the Arbitrum Expansion Program. The mechanism has been reported repeatedly since Offchain Labs disclosed it, always from one direction: what it means for ARB, why the token rallied, how a governance asset acquired a revenue claim. This piece asks the question those pieces did not. What did Robinhood buy, what is it paying, and does the arithmetic work.

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What the arrangement actually is

The mechanics are specific enough to matter, and they have been reported loosely in several places.

The Arbitrum Expansion Program applies to any Layer 2 or Layer 3 chain built with Arbitrum’s Orbit toolkit that settles outside Arbitrum One or Arbitrum Nova. Those chains route 10% of net protocol revenue back to the Arbitrum ecosystem. Of that 10%, eight percentage points flow to the Arbitrum DAO treasury, which ARB tokenholders control through governance, and two percentage points fund the Arbitrum Developer Guild, which supports tooling, grants, and protocol work.

Three details in that description carry weight and are frequently dropped.Net, not gross. The calculation runs on revenue remaining after network operating costs, which ties the payment to a chain’s actual profitability instead of raw transaction throughput. That is materially friendlier to an operator than a gross fee would be, and it means a chain running at thin margins pays little regardless of volume.

Sequencer profits are the base. The revenue subject to sharing comes from the entity that orders and processes transactions, which on Robinhood Chain is Robinhood. That is the same revenue line this publication has examined as the core economics of any Layer 2, and it is precisely the line the chain exists to capture.

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MEV may be included. If the chain adopts Timeboost, Arbitrum’s mechanism for capturing maximal extractable value from transaction ordering, those revenues could fall under the sharing arrangement as well. Whether Robinhood adopts it is a live question with real dollars attached, since ordering advantages on a chain hosting tokenized equities are worth considerably more than on a memecoin venue.

For contrast, Arbitrum One sends 100% of its own fees to the Arbitrum treasury. The Orbit arrangement is the lighter one, which is the point: it is the price of using the stack without settling on the flagship chain.

The numbers, now that they exist

For the first three weeks this was an abstraction. It is not anymore.

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Robinhood Chain has passed $2 million in cumulative revenue since its July 1 launch, with approximately $200,000 routed to the Arbitrum ecosystem under the program. That is a clean 10%, and it is the first hard confirmation that the mechanism operates as described, not as an aspiration in a governance document.

Around that sit the throughput figures that produced it. The chain processed roughly 4 million transactions in its first week. Uniswap alone recorded $500 million in 24-hour volume on it. A single day in early July cleared $568 million. Within about two weeks the chain was clearing more than $800 million in daily decentralized exchange volume, briefly exceeding Ethereum’s, with roughly $3.9 billion across a week. Arbitrum reported the network earning over $800,000 in revenue across seven days, which annualizes near $42 million. Deposits crossed $600 million this week, rising 50% in seven days.

Now the distortion that every honest reading has to apply. The chain is running a 90-day gas subsidy, expiring around October, which means users are not paying the fees a mature chain would charge and the revenue figures are suppressed accordingly. Our audit of the chain’s first month documented how thoroughly that subsidy inflates activity metrics; it works in the opposite direction on revenue. The $42 million annualized figure is therefore both a real number and a floor, and the interesting reading comes after the subsidy lapses, when volumes and revenues both reprice. For broader context, crypto.news has also explained the subsidy distorting these numbers.

At current run rates, Arbitrum’s share is roughly $4 million a year. Against Robinhood’s quarterly revenue near $1.27 billion, that is a rounding error. Against the chain’s own economics, it is a tenth of everything.

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What Robinhood bought

The arrangement only looks strange if you assume the alternative was free. It was not, and the alternatives are worth setting out because the choice reveals the strategy.

Build independently. A brokerage could commission a chain from scratch, own 100% of sequencer revenue, and pay nothing to anyone. The cost is time, engineering risk, and security. Rolling your own settlement layer means auditing it, defending it, and answering for it when something breaks, which for a regulated financial institution holding customer assets is not a theoretical exposure. It also means no ecosystem: no existing tooling, no bridges, no wallets that already work.

Use an existing chain. Deploy on Arbitrum One or Base or anywhere else, pay ordinary fees, capture nothing. This is what Robinhood actually did first, launching tokenized stock offerings on Arbitrum in 2025 before committing to its own chain, and the limitation is obvious: you are a tenant with no landlord’s economics and no control over the roadmap, the fee schedule, or who else gets to build next door.

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Take the Orbit path. Get a chain you brand, control, and sequence, with Offchain Labs providing technical support, inheriting the Arbitrum ecosystem’s tooling and security assumptions, at the price of a tenth of net revenue. The launch specifications suggest what that bought: 100-millisecond block times, EVM compatibility, ETH as the gas asset instead of a new token nobody asked for, and a chain live and processing millions of transactions within a week of announcement.

Read that way, the 10% is a build-versus-buy decision resolved in favour of speed, and for a public company with a stock to defend and a crypto revenue line that fell 47% year over year in the first quarter, speed was plausibly worth more than margin. Our earnings analysis covered why the timing mattered so much.

The uncomfortable version of the same read is that Robinhood, having concluded that owning the rails is where the value sits, does not actually own them. It leases them, with favourable terms, from a decentralized organization whose token holders vote on what to do with the proceeds.

The tenant problem

That last sentence is not a rhetorical flourish. It describes a governance relationship that no traditional financial infrastructure arrangement resembles, and it has consequences nobody has priced.

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The 8% going to the Arbitrum DAO treasury is controlled by ARB tokenholders through governance votes. Those holders decide how the money is deployed. They also, through the same governance process, hold influence over the direction of the technology stack Robinhood’s chain depends on. A licensed brokerage supervised by federal regulators is now a revenue contributor to, and a dependent of, an entity whose decision-making runs through token voting by anonymous participants.

For most crypto-native businesses that is unremarkable. For a public company that files with the SEC, answers to a board, and holds customer assets under regulatory obligation, it is a novel counterparty structure. The questions it raises are practical, not philosophical: what happens if governance votes to change the fee arrangement, what recourse exists if the stack’s roadmap diverges from the tenant’s needs, and how a regulated institution documents dependency on a DAO in its risk disclosures.

There is also a competitive dimension. The Orbit program applies universally, meaning any competitor can take the same path on the same terms. The arrangement Robinhood entered is not exclusive and confers no advantage over the next brokerage to build a chain, which limits how much of a moat the whole exercise creates. What it does create is a template, and the rest of the industry has noticed: our coverage of the tokenized-equity race documented Nasdaq building blockchain share issuance with Kraken’s parent and ICE working with OKX, none of which requires anyone to build from scratch.

Does the arithmetic work

Set aside the framing and ask the commercial question, because the answer determines whether any of this matters.

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Roughly $42 million annualized in chain revenue, before the subsidy expires, against $4 million to Arbitrum. Against a company whose quarterly revenue runs near $1.27 billion, the chain contributes something in the low single-digit percentage range of annual revenue at current run rates, and the Arbitrum payment is immaterial to the parent by any measure.

Which means the fee share is not the story financially. It is the story structurally, because it clarifies what the chain actually is. Robinhood did not build a chain to earn sequencer fees; the numbers are too small relative to its brokerage business for that to be the motivation. It built one to control the settlement layer for tokenized equities, to avoid depending on a competitor’s infrastructure as that market develops, and to own the venue where its own products trade. Sequencer revenue is a byproduct, and 10% of a byproduct is a reasonable price for the option.

The test comes when the byproduct stops being small. If tokenized equities scale the way the DTCC’s entry into the same market suggests they might, and if Robinhood Chain hosts a meaningful share of that activity, the sequencer line grows and the 10% grows with it. A tenth of a rounding error is nothing. A tenth of a business is a negotiation, and the Arbitrum Expansion Program’s terms were set by the party that wrote them.

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The precedent this sets

Strip out the two companies and the arrangement describes something the industry has been moving toward without naming: infrastructure providers taking a percentage of businesses they do not operate.

Arbitrum’s position under this model is closer to a franchise operator than a blockchain. It supplies the technology, the tooling, the security assumptions, and the developer support, and it collects a percentage of what franchisees earn across an expanding set of chains it did not build. Offchain Labs has been explicit that this is the strategy, framing enterprise adoption as the revenue thesis and noting that the flagship chain’s economics are separate. The model compounds with adoption in a way that grants and one-time licensing never do.

That has an obvious appeal for anyone holding the governance token, and it has a less obvious implication for everyone building on the stack. A percentage arrangement set at launch, when the tenant is small and the terms are generous, is an arrangement that becomes expensive precisely when the tenant succeeds. Ten percent of nothing costs nothing. Ten percent of a settlement layer hosting a meaningful share of tokenized equities is a real line item, and it is collected by a party whose consent the tenant needed at the start and whose terms the tenant did not write.

The comparison from outside crypto is the app store. Developers accepted a percentage when the platform was small and the alternative was no distribution, and spent the following decade in litigation and regulatory complaint about the rate. Nothing about the Arbitrum arrangement is coercive in that way, since alternatives genuinely exist and the terms are public. But the structural shape is familiar, and the history of platform percentages is that they are renegotiated by the largest tenants, eventually, loudly.

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Robinhood is now among the largest tenants on this particular platform. Whether it ever behaves like one is a question for the quarter after the subsidy expires, when the numbers stop being small enough to ignore.

What to watch

The revenue line after October. The 90-day gas subsidy expires around then, and the first unsubsidized quarter is the only honest read on what the chain actually earns. Both volumes and revenues reprice, in opposite directions, and the net is unknown.

Whether Timeboost gets adopted. MEV capture on a chain hosting tokenized equities is worth real money, and adopting Arbitrum’s mechanism would likely bring those revenues under the sharing arrangement. The decision is a direct read on how Robinhood values ordering revenue against the cost of sharing it.

Disclosure in the filings. Whether the chain’s economics, including the Arbitrum arrangement, appear in Robinhood’s regulatory filings as a described dependency or a risk factor, and in what language. A public company documenting a revenue-sharing obligation to a DAO would be a first worth reading closely.

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Whether the terms hold. The Expansion Program’s rates are set by Arbitrum governance. Any proposal to change them, in either direction, would test how much leverage a large Orbit tenant actually has, and Robinhood is now among the largest.

Competing chains on the same terms. Every brokerage that follows takes the same deal. If the tokenized-equity market fragments across several Orbit chains, the interesting question stops being what Robinhood pays and becomes what Arbitrum collects from an entire category it does not operate.

A final note on why the framing in the existing coverage matters more than it looks. Every account of this arrangement published so far was written for holders of a governance token, which meant the operative question was always whether the revenue share is large enough to justify a rally. That is a legitimate question and it produced accurate reporting. It also produced a blind spot, because a revenue share has two sides and only one of them was ever examined.

The side nobody covered is the one with the public company, the regulatory filings, the customer assets, and the board. Robinhood’s chain is now a material piece of its strategic story, its stock trades on the strength of that story, and the chain’s economics include a permanent obligation to an entity that no securities analyst covering the stock has any reason to have heard of. That gap between how crypto covers a deal and how equity markets would cover the same deal is where most of the useful analysis in this sector currently sits, and it is worth reading every ecosystem announcement with the question of who else is party to it. The same platform-ownership pattern is also visible in the same playbook in prediction markets, where distribution, licensing, and customer ownership intersect.

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Frequently asked questions

What is the Arbitrum Expansion Program?

An arrangement under which any Layer 2 or Layer 3 chain built with Arbitrum’s Orbit technology stack, and settling outside Arbitrum One or Nova, routes 10% of its net protocol revenue back to the Arbitrum ecosystem. Of that, 8% goes to the Arbitrum DAO treasury controlled by ARB tokenholders, and 2% funds the Arbitrum Developer Guild.

How much has Robinhood Chain actually paid?

Roughly $200,000, against more than $2 million in cumulative chain revenue since the July 1 launch, which confirms the 10% rate operating in practice. Arbitrum separately reported the network earning over $800,000 in a single seven-day period, annualizing near $42 million, though those figures are suppressed by an ongoing gas subsidy.

Is the 10% calculated on gross or net revenue?

Net, after network operating costs, which ties the payment to a chain’s actual profitability rather than to transaction volume. The revenue base is sequencer profits, and if the chain adopts Arbitrum’s Timeboost mechanism for capturing value from transaction ordering, those revenues may fall under the arrangement as well.

Why did Robinhood not just build its own chain from scratch?

Time, risk, and ecosystem. Building independently means owning all the revenue and also owning the security, auditing, and defence of a settlement layer holding customer-adjacent assets, with no existing tooling, bridges, or wallet support. Orbit delivered a branded, controlled chain with 100-millisecond block times and technical support from Offchain Labs, live within a week, at the cost of a tenth of net revenue.

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Does the payment matter financially to Robinhood?

Not currently. At present run rates the Arbitrum share is roughly $4 million a year against quarterly company revenue near $1.27 billion. The chain itself contributes a low single-digit share of annual revenue at best. The arrangement matters structurally rather than financially, because it defines what the chain is and who it depends on.

What is unusual about paying a DAO?

The counterparty structure. The 8% flowing to the Arbitrum DAO treasury is controlled by token holders voting through governance, and those same holders influence the roadmap of the technology stack Robinhood’s chain runs on. A federally regulated public company holding a revenue-sharing obligation to, and infrastructure dependency on, a decentralized organization is a novel arrangement with unsettled disclosure and risk-management questions.

Does this give Robinhood any advantage over competitors?

Not through the arrangement itself, which is available to anyone on identical terms. Any brokerage can build an Orbit chain and pay the same 10%. Robinhood’s advantages, if they hold, come from distribution and from operating the venue where its own products trade, and the tokenized-equity market is already attracting incumbent exchanges building comparable infrastructure.

What should investors watch?

The first unsubsidized quarter after the gas subsidy expires around October, whether Timeboost is adopted and MEV revenue enters the sharing arrangement, how the chain’s economics and the Arbitrum obligation appear in regulatory filings, and any governance proposal to change the Expansion Program’s rates. This is educational analysis, not investment advice.

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Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. Revenue figures reflect third-party trackers and company statements available at the time of writing and are subject to revision, and chain activity is currently affected by a temporary fee subsidy. Nothing here is a recommendation to buy, sell, or hold any security or asset. Always do your own research. Information is accurate as of July 29, 2026.

Trade.xyz, an operator of onchain perpetual markets on Hyperliquid, said it will cover eligible liquidation losses after a price anomaly hit its contract tracking SK Hynix, a South Korean chipmaker and producer of high-bandwidth memory for artificial intelligence.

Trade.xyz said the SKHYNIX contract’s mark price fell from $1,127.90 to $917.25 at 23:01 UTC on Monday after an executed trade was relayed by multiple independent data providers. Eligibility requirements will be announced soon, with distributions expected in the coming days.

The SK Hynix contract ranks among Hyperliquid’s most active markets. On Wednesday, Hyperliquid data showed the contract had generated over $1.5 billion in 24-hour volume and held nearly $600 million in open interest at the time of writing.

Trade.xyz said its oracle was tracking the external venue used as the primary South Korean pre-market and had “worked as intended according to its specification.” It acknowledged traders’ frustration and described the reimbursement as a “one-time discretionary decision,” adding that it would review how prices are formed during extreme market events.

The platform did not disclose how many traders would qualify for reimbursement or the total amount it expects to distribute. 

SK Hynix trading chart. Source: Hyperliquid

How the anomaly reached the perpetual market

Trade.xyz said the sharp move originated from an executed transaction on an external market rather than its own order book. Its SK Hynix oracle tracks the US dollar value of one SKHX common share by converting the underlying Korean won price using the prevailing exchange rate, according to its documentation. 

The external print fed into the oracle and contributed to the contract’s mark-price move. Hyperliquid uses the mark price to value positions for margin purposes and determine when leveraged positions should be liquidated.

The platform said it is considering giving more weight to prices formed on its own order books, which it said now provide meaningful liquidity and market signals. 

Related: Onchain commodity trading is here to stay, but liquidity remains an issue

Trade.xyz operates under Hyperliquid’s HIP-3 framework, which allows builders to launch perpetual contracts tied to assets with external price feeds. 

The platform accounted for more than $22 billion of HIP-3’s first $25 billion in cumulative volume and later launched an officially licensed S&P 500 perpetual using S&P Dow Jones Indices data.

Magazine: How Hong Kong is turning tokenized bonds into real market infrastructure

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

Trade.xyz, the operator behind onchain perpetual markets on Hyperliquid, says it will reimburse eligible liquidation losses after an abrupt price move affected its Hyperliquid-traded SK Hynix (SKHYNIX) contract. In a post on X, the platform linked the incident to an external market trade that its oracle incorporated into the contract’s mark price, triggering liquidation mechanics.

According to Trade.xyz, the SKHYNIX mark price dropped from $1,127.90 to $917.25 at 23:01 UTC on Monday after a trade on a separate venue was relayed through multiple independent data providers. The operator said it will announce eligibility criteria soon, with reimbursement expected over the following days.

Key takeaways

• Trade.xyz plans to cover liquidation losses tied to an SKHYNIX mark-price dislocation on Hyperliquid.
• Trade.xyz attributes the move to an external market print that flowed into its oracle, not to changes in its own order book.
• The affected contract is a high-activity Hyperliquid market, with $1.5B+ in 24-hour volume and about $600M open interest shown by Hyperliquid data.
• Reimbursement is described as a one-time discretionary decision, with eligibility and total amounts yet to be disclosed.
• Trade.xyz is reviewing how it forms prices during extreme events, including whether to weight its own order-book liquidity more heavily.

What happened to the SKHYNIX contract

Trade.xyz said the incident began with an executed transaction on an external market rather than activity directly in Hyperliquid’s SKHYNIX order book. The platform’s oracle tracks the US dollar value of one SKHX common share by translating the underlying Korean won price into USD using the prevailing exchange rate, based on its published documentation.

In this case, Trade.xyz said the oracle received the external print and that the mark price moved sharply as a result. On Hyperliquid, the mark price is used for margin valuation and for determining when leveraged positions should be liquidated—meaning sudden oracle-driven shifts can quickly cascade into liquidation outcomes for traders holding risk on the contract.

Trade.xyz did not specify how many traders will qualify, nor did it disclose the total amount it expects to distribute. It said the market will be eligible only under criteria to be released soon.

Why Hyperliquid mark pricing matters for liquidations

Hyperliquid’s design relies on mark prices to keep leverage risk measurable and liquidation thresholds predictable. While that approach can work smoothly during normal market conditions, it can be exposed to abrupt external price dislocations—especially when oracles pull in values that may not immediately reflect the trading dynamics on the contract’s own venue.

Trade.xyz acknowledged trader frustration and framed its response as a “one-time discretionary decision” to cover eligible liquidation losses. At the same time, it said the oracle “worked as intended according to its specification,” emphasizing that the system performed the task it was built to do—incorporating the external venue pricing feed and converting it via the exchange rate.

Looking ahead, Trade.xyz said it will review how prices are formed during extreme market events. The operator also indicated it is considering adding more weight to prices formed on its own order books, saying those order books now provide meaningful liquidity and market signals.

Scale of exposure: a top Hyperliquid market

The SKHYNIX contract is among the most actively traded offerings on Hyperliquid. Hyperliquid data shared by the platform showed that the contract had produced more than $1.5 billion in 24-hour volume and held nearly $600 million in open interest at the time of writing (Wednesday).

That level of activity matters because it increases the number of traders potentially affected when margin and liquidation thresholds change quickly. It also raises the stakes for oracle and mark-price methodology: even when a disagreement is rooted in external venue pricing, the on-chain mechanics that rely on mark prices can convert the move into immediate forced position closures.

Trade.xyz’s reimbursement plan is therefore aimed at mitigating the downstream consequence of the mark-price shift rather than disputing the oracle’s intended behavior.

Where the price feed fits in Hyperliquid’s ecosystem

Trade.xyz operates under Hyperliquid’s HIP-3 framework, which allows builders to launch perpetual contracts tied to assets using external price feeds. In other words, the contract’s mark price doesn’t come purely from the local order book—it can be driven by an external reference intended to reflect the underlying asset’s value.

Trade.xyz has also been active within the HIP-3 launch phase: Cointelegraph previously reported that the firm accounted for more than $22 billion of HIP-3’s first $25 billion in cumulative volume. It later launched an officially licensed S&P 500 perpetual using S&P Dow Jones Indices data, according to earlier coverage.

In practical terms, the SKHYNIX episode highlights a core tension in this model. External feeds can help anchor derivatives to real-world reference prices, but they can also import sudden prints that may not line up with the contract’s own trading behavior at the moment the print lands.

Trade.xyz’s comments suggest it recognizes that mismatch and is open to adjusting weighting—potentially blending external feed inputs with the signals derived from the order book where liquidity is now deeper than it may have been earlier in the platform’s growth.

Traders watching Hyperliquid next should focus on when Trade.xyz publishes eligibility criteria and how it decides what counts as “eligible liquidation losses.” They should also watch for any technical or policy changes around mark-price formation in extreme events, particularly whether the platform moves toward a higher reliance on local order-book pricing during volatile or anomalous periods.