Crypto World
What is a perp DEX? The three architectures, compared
Every guide tells you a perp DEX is a decentralized exchange for perpetual futures. Almost none tells you that the label covers three incompatible designs, that who takes the other side of your trade differs completely between them, and that the difference only becomes visible during the hour you most need to understand it.
Summary
- A perpetual decentralized exchange lets traders take leveraged long or short positions on assets they never own, using contracts with no expiry, settled by smart contracts from a self-custodial wallet.
- Perpetual futures stay tethered to spot prices through the funding rate, a periodic payment between longs and shorts that makes deviation expensive, replacing the settlement date that anchors traditional futures.
- The term covers three different architectures: on-chain order books matching traders against each other, pooled-liquidity venues where depositors take the other side against an oracle price, and hybrids that separate matching from settlement.
- Who your counterparty is depends entirely on which architecture you are using, and that determines what happens under stress: order books face liquidity gaps, pooled venues face oracle dependence and depositor losses.
- Every design shares one risk chain, margin to liquidation to backstop to auto-deleveraging, and understanding where a venue sits in that chain matters more than any yield or fee comparison.
The definition of a perpetual decentralized exchange takes one sentence and explains almost nothing useful. Yes, a perp DEX is a platform for trading perpetual futures on a blockchain from a wallet you control. That sentence covers venues whose internals have almost nothing in common: one where your order rests in a public book and fills against another trader, one where a pool of depositors automatically takes the other side of everything you do at a price fed by an oracle, and one where matching happens off-chain while settlement happens on it. Those are different products wearing one label, and the difference is invisible in calm markets and decisive in violent ones, which is exactly the wrong distribution for a fact to be hidden. This guide starts with the instrument, then separates the architectures, then follows the risk chain that all of them share, because a trader who understands which machine they are inside understands what can actually go wrong.
The instrument first
Before the venue, the contract, because everything downstream follows from its structure.
A perpetual future is an agreement to take on price exposure to an asset without owning it and without an expiry date. You post collateral, open a long or a short, and your position gains or loses as the price moves, with leverage letting the position exceed the collateral behind it. Traditional futures solve the problem of keeping contract prices near spot prices by settling on a fixed date, which forces convergence. Perpetuals have no such date, so they use a different mechanism: the funding rate, a periodic payment flowing between longs and shorts depending on which side is more crowded. When the contract trades above spot, longs pay shorts, making the crowded side expensive to hold and pulling the price back. When it trades below, the flow reverses.
Two consequences deserve emphasis because new traders consistently miss them. First, funding is a real, recurring cost or income, not a technicality, and over a long hold in a persistently one-sided market it can dominate the profit or loss from price movement itself. Second, the design was invented in crypto, introduced in 2016, and became the dominant derivatives structure in the asset class, which means the vast majority of crypto derivatives volume trades in instruments with no settlement date and a payment stream that most participants never model.
Leverage completes the picture and supplies the danger. Collateral supports a position larger than itself, and when the position moves against you far enough that your collateral no longer covers the potential loss, the venue closes it. That event is called liquidation, it is automatic, it is priced off a reference calculation, not the last trade, and it is the single most common way retail participants lose money in these markets.
Three architectures
Here is where the generic explanations stop and the useful part begins. Perp DEXs solve one hard problem, how to have a counterparty, in three incompatible ways.
The on-chain order book. Traders post bids and offers into a book, and the venue matches them against each other, exactly as a traditional exchange does. Your counterparty is another trader. The design’s advantage is that pricing emerges from the book instead of from an external feed, so it can support tight spreads, professional market makers, and large size without a pool absorbing the risk. Its difficulty is technical: maintaining an order book with fast matching and cancellation is demanding on a blockchain, which is why venues using this model have generally built dedicated infrastructure instead of deploying onto a general-purpose chain. Its stress behavior is the classic one: when the book thins, liquidations execute at worse prices, and the gap between the liquidation price and the achievable price becomes somebody’s loss.
The pooled-liquidity model. Depositors contribute assets to a shared pool, and that pool takes the other side of every trade, with prices supplied by an oracle instead of discovered in a book. The advantage for the trader is that liquidity is always present at the quoted price with no slippage of the usual kind, and the advantage for the depositor is a yield derived from fees and, structurally, from trader losses. The costs are two: the venue depends entirely on the oracle’s accuracy, making price feed manipulation the primary attack vector, and the depositors are collectively the house, which means a period in which traders are systematically right is a period in which the pool loses money. That is not a malfunction; it is the design working as specified.
Hybrids and vault-backed books. Several major venues combine elements: an order book for matching, with a protocol-owned vault providing liquidity into that book and acting as the backstop counterparty when liquidations cannot clear on the open market. This structure gives traders order book pricing and gives the venue a capital buffer, funded by depositors who are compensated for absorbing exactly the events order books handle worst. The trade is that vault depositors, who often understand themselves as passive yield earners, are in fact short volatility and long the venue’s operational competence, which is a considerably more complicated position than an advertised annual percentage rate suggests. Crypto.news has also audited the category leader, where these design choices now carry market-wide importance.
The practical instruction: before using any venue, settle which of these three you are in. The answer determines whether your counterparty is a trader, a pool, or a hybrid, and therefore what stress does to your position.
The risk waterfall
All three architectures share one chain of defenses, and knowing its steps is what separates informed participation from surprise.
Step one, margin. Your position must maintain collateral above a maintenance threshold. Fall below and the position becomes eligible for closure. Thresholds vary by asset and leverage, and they are calculated against a reference price the venue computes, typically a blend of external and internal data, and not the last trade on the venue’s own book, which is a protection against manipulation and a source of confusion when a chart briefly shows a price that did not trigger anything.
Step two, liquidation. The venue closes the position, usually by pushing it into the market. If it clears near the expected price, the process ends there and the trader loses their margin, sometimes with a remainder returned depending on the venue’s rules.
Step three, the backstop. If the market cannot absorb the position, something else must. Depending on the architecture, that is an insurance fund built from prior liquidation proceeds, a protocol vault taking the position onto depositors’ balance sheet, or the pool that was already the counterparty. This is the step where designs diverge most, and where a venue’s real risk profile lives.
Step four, auto-deleveraging. If the backstop is exhausted, the accounting must still balance, and the venue reduces positions on the winning side to close the gap. This publication covers the last step in the risk chain separately because it deserves its own treatment; the summary is that in extreme conditions, profitable traders can have positions closed against their will to keep the venue solvent. It is rare, it is disclosed in every serious venue’s documentation, and it is the risk that most surprises experienced traders when it arrives.
Any venue that cannot explain, in its own documentation, exactly what happens at steps three and four is a venue whose risk you cannot assess.
What you gain and what you give up
Set against a centralized exchange, the honest ledger has entries on both sides.
The gains are real: self-custody, so your collateral is not sitting on a company’s balance sheet, a lesson the industry paid for in 2022; transparency, since positions, liquidations, and in many cases the venue’s own vault activity are publicly verifiable instead of reported; permissionless access without account approval; and, increasingly, product range, since venues that can list markets by code instead of by committee have moved into assets a regulated exchange would take years to approve. Crypto.news has covered what these venues now list as equity perps and synthetic stock markets expand the category beyond crypto pairs.
What you give up is also real and less discussed. There is no support desk with the authority to reverse anything, no deposit protection, no regulator supervising the venue’s solvency, and no recourse if the code behaves as written but not as you expected. Oracle dependence introduces a failure mode with no equivalent on a traditional exchange. Smart contract risk is permanent even after audits. And venue concentration means most on-chain perpetual volume runs through a small number of platforms, so the sector’s risks are correlated in ways the self-custody story obscures: holding your own keys does not help if the venue holding the order book fails.
How the category arrived here
A short history clarifies why these venues look the way they do, because almost every design choice is a response to something that went wrong.
The perpetual contract itself was introduced on a centralized crypto exchange in 2016, solving a real problem: crypto markets trade continuously and globally, and a derivatives instrument requiring periodic settlement and rollover fits that badly. The funding-rate design let a contract track spot indefinitely, and the structure proved so well suited to the asset class that it became the dominant form of crypto derivatives, accounting for the large majority of all derivatives volume in the market.
Decentralized versions followed, and their first generation was defined by a problem they could not solve elegantly: blockchains were too slow and too expensive to host an order book with the constant order placement and cancellation that market making requires. The workaround was pooled liquidity with oracle pricing, which needs no order book at all, and that architecture dominated the early years while carrying its two structural costs, oracle dependence and depositors serving as the house.
Two events reshaped the category after that. The collapse of a major centralized exchange in 2022 made self-custody a mainstream priority instead of an ideological preference, and volume began migrating toward venues where collateral never left the user’s control. And a second generation of infrastructure, purpose-built chains and application-specific designs, made on-chain order books practical at speeds competitive with centralized matching, which is why the venues that lead the category today mostly run books and not pools.
The most recent shift is economic, not technical. The first wave of perp DEXs bought volume with token incentives, paying users to trade, which produced impressive numbers and little durable business. The current cohort competes on real revenue: fees actually collected, insurance funds actually capitalized, and yields paid from trading activity instead of from emissions. That distinction is checkable by anyone, since protocol revenue data is public, and it is the single most useful filter for separating venues with a business from venues with a marketing budget.
What to check before using one
Five things, in the order they will cost you money if you skip them.
The architecture. Order book, pool, or hybrid, and therefore who takes the other side. This is checkable in any competent documentation and determines everything else.
The oracle. If the venue prices positions from an external feed, find out which one, how it is aggregated, and what happens if it stalls. Manipulation of thin underlying markets to move a venue’s reference price is the attack that has actually happened, repeatedly.
The backstop and the ADL policy. Read steps three and four in the venue’s own words. If auto-deleveraging exists, learn how it selects positions, which is typically by some combination of unrealized profit, leverage, and size.The funding regime. Check current and historical funding on the market you intend to trade. A persistently expensive side turns a correct directional view into a losing position over time.
The collateral. In most venues, the position is only as stable as the asset backing it. Crypto.news has explained the collateral behind every position and how USDC, USDT, RLUSD, and other dollar tokens try to hold their peg.
Your own leverage. The most controllable variable and the one most often set by ambition. Lower leverage widens the distance to liquidation, reduces your ranking in any deleveraging queue, and costs nothing but patience.
One closing caution about a number these venues advertise heavily and readers should discount appropriately. Perpetual decentralized exchanges frequently promote maximum leverage figures, and the numbers have climbed steadily as venues compete. High leverage is not a feature in any meaningful sense; it is a permission, and the permission is asymmetric in whom it benefits. A venue earns fees on notional volume, so a trader using fifty times leverage generates fifty times the fee revenue of the same collateral deployed unlevered, while the trader’s probability of surviving ordinary volatility falls accordingly. The interface presents the choice as a slider, which is an unusually elegant way to disguise a decision that determines almost everything about the outcome.
The arithmetic worth internalizing is simple. At ten times leverage, roughly a ten percent adverse move eliminates the position, before fees and funding. At fifty times, roughly two percent does, and two percent moves happen in crypto several times a day. Reference prices, maintenance margin buffers, and partial liquidation mechanics change those numbers at the edges, but not the order of magnitude. Any strategy that requires high leverage to be worth executing is a strategy whose edge is too small to survive the costs, and the deleveraging queue discussed above ranks high-leverage positions first for closure precisely because venues understand which accounts are fragile. The traders who last in these markets are, with dull consistency, the ones using far less leverage than the platform allows.
A note on where this category sits relative to the regulated world, because the boundary is moving and it changes what these venues will be. Perpetual futures are, in American regulatory terms, derivatives, and offering them to US retail customers requires registration that most on-chain venues do not hold, which is why the largest perp DEXs restrict US access formally and operate offshore in practice. That arrangement has been stable for years and is now under pressure from two directions at once. Regulated venues are moving toward perpetual-style products of their own, and at least one designated contract market has been building in that direction, which would give American retail a licensed route to the instrument for the first time. That is the regulated alternative, compared.
Meanwhile the on-chain venues have expanded into equity-linked and commodity-linked perpetuals, which pulls them further into territory that securities and derivatives regulators consider theirs.
The likely destination is a bifurcated market resembling every previous generation of derivatives: a regulated onshore version with lower leverage, identity requirements, and recourse, and an offshore permissionless version with the reverse. Traders should expect the choice between them to become explicit, not technical, and to be asked, at some point, to pick which set of protections and restrictions they want. Reading a venue’s own jurisdictional disclosures before depositing is the practical version of that decision, and it is worth doing now instead of after the perimeter moves.
Frequently asked questions
What is a perp DEX in one sentence?
A blockchain-based platform where traders take leveraged long or short positions on perpetual futures, contracts with no expiry date, using collateral from a self-custodial wallet, with pricing, margin, liquidation, and settlement handled by smart contracts rather than by a company holding customer funds.
What makes a perpetual different from a normal future?
No expiry date. Traditional futures settle on a fixed date, which forces the contract price toward spot as settlement approaches. Perpetuals never settle, so they use the funding rate, a recurring payment between longs and shorts based on which side is more crowded, to keep the contract tethered to the underlying price. That payment is a real cost or income, not a technicality.
Are all perp DEXs the same underneath?
No, and this is the most consequential thing most guides omit. Some run on-chain order books where your counterparty is another trader. Some use pooled liquidity where depositors collectively take the other side at an oracle-supplied price. Some combine both, matching on a book while a protocol vault provides liquidity and absorbs positions that cannot clear. Stress behavior differs completely across the three.
Who is on the other side of my trade?
It depends on the architecture. On an order book venue, another trader. On a pooled venue, the depositors in the liquidity pool, who profit when traders lose and lose when traders win. On a hybrid, some combination, with a protocol vault frequently acting as the counterparty of last resort during liquidations.
What happens if my position gets liquidated?
The venue closes it once your collateral falls below the maintenance requirement, calculated against a reference price rather than the last trade. If the position clears in the market, the process ends there. If it cannot, a backstop absorbs it, an insurance fund, a protocol vault, or the liquidity pool, and in extreme cases the venue reduces winning positions on the other side through auto-deleveraging to keep the books balanced.
Is a perp DEX safer than a centralized exchange?
Different, not uniformly safer. You keep custody of collateral, positions and liquidations are publicly verifiable, and access requires no account approval. Against that, there is no deposit protection, no support desk that can reverse anything, no supervisor checking the venue’s solvency, plus oracle dependence and smart contract risk that centralized venues do not share in the same form.
What is the funding rate costing me?
Whatever the crowded side is paying, charged periodically for as long as you hold. In persistently one-sided markets this can exceed the profit from a correct directional call, particularly on longer holds. Current and historical funding is published by every serious venue and should be checked before entering, not discovered afterward.
What should a beginner do differently?
Use low leverage, which widens the distance to liquidation and lowers your position in any deleveraging queue; read the venue’s documentation on backstops and auto-deleveraging before depositing; check funding history on the specific market; and size positions on the assumption that the worst-case mechanics will eventually apply to you, because in leveraged markets they eventually do. This is educational information, not investment advice.
Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. Leveraged derivatives trading carries substantial risk of loss, including total loss of collateral, and products described may be unavailable or restricted in your jurisdiction. Always do your own research. Information is accurate as of July 28, 2026.
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Crypto World
HTX’s First TradFi “Trade to Earn” Campaign Unleashes New Trading Momentum: Rewards Exceed $23,000, Fee Savings Reach 1.8 Billion $HTX
Recently, HTX’s first-ever TradFi “Trade to Earn” campaign concluded successfully. The campaign leveraged innovative gameplay – “24/7 mining” and “up to 110% fee rebates” – to ignite significant trading enthusiasm for traditional finance assets within the crypto market.
HTX’s official data reveals impressive results: the campaign generated a total trading volume of 63.37 million USDT, crowned a top winner claiming 5,206 USDT in rewards, and collectively saved users 22,238 USDT in trading fees. These achievements underscore the event’s effectiveness in enhancing the user trading experience and reducing trading costs.
Amid current market volatility, HTX’s TradFi perpetual futures contracts offer users an excellent hedging and cross-market investment tool. Through the “mining via trading” model, users can capture macro opportunities such as surging U.S. equities and gold volatility using familiar USDT capital without trading fee friction.
Enjoy Negative Trading Fee Rates 24/7
Official data reveals that the inaugural “Trade to Earn” campaign generated a robust trading volume of 63.37 million USDT. Over the campaign period, the platform distributed 23,477 USDT in rewards while saving traders 22,238 USDT in fees (an equivalent of roughly 1.8 billion $HTX). These impressive metrics highlight HTX’s trading innovations with negative fee rates and 24/7 continuous rewards.
During the campaign, users trading designated TradFi perpetual futures contracts earned $HTX rewards of up to 110% of their actual trading fees incurred. This means the platform not only covers all trading costs but also provides additional rewards, transforming trading costs from an expense into profit and truly achieving “the more you trade, the more you earn.” Additionally, the platform offered a daily prize pool of 6,000 USDT, distributed hourly to ensure round-the-clock incentives.
Notably, the campaign-designated trading assets span a diverse range of core TradFi instruments: from safe-haven and inflation-hedging tools like gold (XAU) and crude oil (USOIL), to major indices like the Nasdaq (QQQ) and tech giants including NVIDIA (NVDA) and Microsoft (MSFT). This diverse selection of assets offers users versatile macro allocation, hedging, and cross-market trading opportunities, further expanding practical use cases at the intersection of Web3 and traditional finance.
Fees for $HTX Buyback and Burn, Constructing a Positive Cycle of Trading and Ecosystem Value
Beyond trading rewards, another standout feature of this campaign is its deep integration of user trading activity with $HTX ecosystem value.
During the campaign, all trading fees generated from designated TradFi contracts were allocated to buy back $HTX tokens, with buybacks executed and burned according to the platform’s quarterly burning schedule. This mechanism links platform trading growth with $HTX value creation, continuously incentivizing user participation while reinforcing the token’s deflationary characteristics. This fosters a positive cycle: “trading growth – token buyback and burn – value accumulation.”
With the first campaign successfully concluded, HTX’s second-phase TradFi “Trade to Earn” is now in preparation. The campaign will continue to adopt negative-fee trading and 24/7 rewards, while further expanding access to popular TradFi asset trading scenarios. This will enable users to capture global market opportunities while continuously enjoying the innovative experience of “trading as earnings.”
Looking forward, HTX will leverage more diverse products, increasingly competitive incentives, and an enhanced ecosystem to drive deeper integration between crypto and TradFi, delivering a more professional and efficient digital asset trading platform for global users.
About HTX
Founded in 2013, HTX has evolved from a virtual asset exchange into a comprehensive ecosystem of blockchain businesses that span digital asset trading, financial derivatives, research, investments, incubation, and other businesses.
As a world-leading gateway to Web3, HTX harbors global capabilities that enable it to provide users with safe and reliable services. Adhering to the growth strategy of “Global Expansion, Thriving Ecosystem, Wealth Effect, Security & Compliance,” HTX is dedicated to providing quality services and values to virtual asset enthusiasts worldwide.
To learn more about HTX, please visit https://www.htx.com/ or HTX Square , and follow HTX on X, Telegram, and Discord.
The post HTX’s First TradFi “Trade to Earn” Campaign Unleashes New Trading Momentum: Rewards Exceed $23,000, Fee Savings Reach 1.8 Billion $HTX appeared first on BeInCrypto.
Russia has escalated its long-running dispute with Telegram by charging founder Pavel Durov with facilitating terrorist activities and issuing an international arrest warrant, marking one of the most significant legal actions yet against the messaging platform’s billionaire founder.
The move comes as governments worldwide intensify pressure on technology platforms over content moderation, encryption, and their responsibilities in preventing criminal activity. The latest accusations also add to Durov’s ongoing legal challenges outside Russia, including an active investigation in France.
The post Russia Targets Telegram Founder Pavel Durov With Terrorism Charges appeared first on BeInCrypto.
Bitcoin climbed 1% to about $63,800 on Wednesday while Asian equity markets suffered one of their worst stretches of the year, the second time in a seven-day period that crypto has held through a sharp unwind in the artificial intelligence trade.
The majors moved with it. Ether rose 1% to $1,899, XRP added 2% to $1.07, BNB gained to $567, solana held at $73, and dogecoin edged up. Hyperliquid’s HYPE was the only major in the red, down 3% to $54.
The damage in equities was concentrated in chipmakers. South Korea’s benchmark tumbled 11%, following an 11% drop on Tuesday and putting the index on course for a record two-day decline. SK Hynix fell about 17% after reporting a 557% surge in quarterly profit that still came in below expectations, and
Samsung slid 12% ahead of its own results on Thursday. The MSCI Asia Pacific index dropped 2% to its lowest since mid-April, and Nasdaq 100 futures fell 1%, extending a five-day losing streak for the tech-heavy gauge, its longest this year.
Cardano’s ADA and Pi Network’s PI have both posted staggering losses over the past year and are among the worst-performing cryptocurrencies during the current bear market.
Their deteriorating condition has stirred anxiety among industry participants and perhaps some fear that their prices could collapse to $0. We asked three of the most widely used AI-powered chatbots which of these tokens they consider most likely to experience such a crash this year.
PI Faces Greater Risk
According to ChatGPT, Pi Network’s native token (whose valuation recently neared its record low) is significantly more likely to collapse to $0 in 2026 than ADA.
It claimed that the former has weaker liquidity, a shorter operating history, much greater future supply expansion, and a price that is already hovering close to its historical bottom. The chatbot also touched on existing problems inside Pi Network’s ecosystem that could negatively impact PI in the near future.
“Any prolonged technical problems, delayed migrations, regulatory pressure, or loss of community confidence could have an outsized effect on the token. For PI to approach $0, investors would probably need to see several problems occur together: continued supply growth, weak application demand, declining exchange liquidity, stalled development, and a broader crypto market sell-off,” OpenAI’s platform stated.
ChatGPT noted that ADA has also been on a massive downfall lately, yet it highlighted its ability to survive previous bear markets and outlined its vast community base. It also pointed out that the majority of its eventual supply is already in the market, which makes the dilution risk far less than PI’s.
The chatbot did not rule out the possibility of a further collapse for ADA given the current conditions but claimed that reaching practically zero would require something much more destructive.
More in Favor
Perplexity agreed with ChatGPT’s theory that PI carries the higher risk of sliding to $0 sometime this year, but argued that a literal collapse to such territory looks improbable for either token.
“As long as there is any bid from speculators, community members, or exchanges, the price will be >0,” it claimed.
For its part, Google’s Gemini added a different angle to the discussion, flagging several Pi Network-related problems that the other chatbots didn’t mention and that could drag the price even lower.
Among the main ones are the accusations from multiple industry participants that the project is a pyramid scheme rather than a true decentralized network. Additionally, it pointed out that leading crypto exchanges like Binance and Coinbase still refuse to list PI, which could be interpreted as another red flag. In conclusion, Gemini said:
“While ADA may experience price swings driven by broader crypto market trends, its structural liquidity and established ecosystem make an absolute crash to $0 extremely unlikely. In contrast, Pi Network is far more vulnerable to severe price collapse or liquidity failure.”
The post Cardano (ADA) or Pi Network (PI): 3 AIs Predict Which Is More Likely to Hit $0 in 2026 appeared first on CryptoPotato.
Bitcoin traded above $64,000 on Wednesday, up 1% on the day, with the broader market green ahead of the Federal Reserve’s rate decision at 2 p.m. ET, per CoinDesk data. Ether added 1.7% to $1,909 and XRP led the majors at 2.6%.
The base case is a hold. About 70% of traders expect the Fed to keep its rate at 3.50% to 3.75%, a sixth straight meeting on pause, per CME data.
But roughly 30% now price a quarter-point hike, and the case has serious backers: Citadel Securities told clients it expects a surprise increase this week to shore up Warsh’s inflation-fighting credibility, and UBS said such a move would not surprise it.
Trade.xyz, the operator behind onchain perpetual markets on Hyperliquid, says it will reimburse eligible liquidation losses after a sudden price anomaly affected the platform’s SK Hynix perpetual contract. The incident followed a sharp drop in the contract’s mark price late Monday, after an external trade was relayed and processed through Trade.xyz’s oracle.
In a statement posted on X, Trade.xyz said the SKHYNIX mark price fell from $1,127.90 to $917.25 at 23:01 UTC on Monday. The move, it explained, was triggered after an executed transaction on an external venue was picked up by multiple independent data providers. Trade.xyz did not provide details on the size of the reimbursement pool or how many traders would qualify, saying only that eligibility requirements will be announced soon and distributions are expected in the coming days.
Key takeaways
- Trade.xyz will cover eligible liquidation losses tied to the SKHYNIX mark-price anomaly, with eligibility details and payouts expected shortly.
- The affected mark price moved after an external market execution was processed via the contract’s oracle, not from activity within Hyperliquid’s own order book.
- Hyperliquid data cited in the report shows SK Hynix is one of its most actively traded contracts, with over $1.5 billion in 24-hour volume and nearly $600 million open interest at the time of writing.
- Trade.xyz said its oracle was operating “according to its specification,” but plans to review how prices are formed during extreme market events.
- The firm is considering weighting prices derived from its own order books more heavily going forward.
A liquidation event tied to an external print
The SK Hynix perpetual ranks among Hyperliquid’s most active markets. According to data shown on Hyperliquid earlier this week, the contract recorded more than $1.5 billion in 24-hour volume and maintained close to $600 million in open interest at the time of writing.
Trade.xyz attributed Monday’s dislocation to an executed trade on a separate venue. It said the oracle behind the SKHYNIX contract tracked the price of one SKHX common share in U.S. dollar terms by converting the underlying Korean won price using the prevailing exchange rate, as described in its documentation. That external print then fed into the oracle and contributed to the mark-price jump that determined position valuations and liquidation timing on Hyperliquid.
On Hyperliquid, the mark price is used for margin accounting and for deciding when leveraged positions become liquidatable. As a result, abrupt oracle-driven mark-price movements can translate quickly into forced liquidations—even if the platform’s own trading activity does not appear to mirror the same immediate pricing signal.
Trade.xyz: oracle worked, reimbursement is discretionary
Trade.xyz said its oracle “worked as intended according to its specification,” describing the oracle’s role in transforming an external venue’s execution into a mark price for the perpetual contract. The company acknowledged that traders may be frustrated when liquidation decisions rely on mark prices that change quickly due to external feeds rather than the dynamics of the local order book.
To address the fallout, Trade.xyz characterized the reimbursement as a “one-time discretionary decision.” While the firm did not disclose the total expected reimbursement amount or qualifying criteria in the immediate announcement, it said it would release eligibility requirements soon and make payouts in the coming days.
For traders and market participants, the key question is how “eligible liquidation losses” will be defined—particularly whether the scope will be limited to liquidations directly attributable to the oracle-driven mark-price move, or whether it will include a broader window of positions impacted by the anomaly.
What Trade.xyz says it may change in extreme moves
Beyond the immediate reimbursement plan, Trade.xyz indicated it is reviewing the mechanics of price formation during stress events. Specifically, it said it is considering giving more weight to prices formed on Hyperliquid’s own order books. The rationale is straightforward: if the platform’s internal liquidity and trading activity are “now providing meaningful liquidity and market signals,” then relying solely on an external oracle during unusual conditions may produce outcomes that feel disconnected from where traders are actually transacting.
This shift—more internal weighting versus external-feed dominance—matters for risk management on perp venues. Mark-price sourcing influences liquidation outcomes, and therefore shapes how traders size positions and place risk controls. If Hyperliquid’s internal pricing is considered a more reliable reflection of market consensus during abnormal intervals, it could reduce the likelihood of liquidation cascades driven by outlier oracle updates.
Trade.xyz also placed the anomaly within the larger context of Hyperliquid’s HIP-3 framework, which enables builders to launch perpetual contracts tied to assets with external price feeds. Trade.xyz has been a significant HIP-3 volume contributor, accounting for more than $22 billion of HIP-3’s first $25 billion in cumulative volume, as previously reported by Cointelegraph. It later launched an officially licensed S&P 500 perpetual using S&P Dow Jones Indices data.
Why this episode matters for Hyperliquid’s perp model
Hyperliquid’s architecture gives traders access to highly active perpetual markets, including contracts where mark prices are dependent on external data sources. That design can be efficient when external prints represent fair value—but it also creates a vulnerability when an external venue’s execution, reporting timing, or feed relays cause sharp dislocations that arrive faster than the internal order book can reflect them.
The SK Hynix incident illustrates the trade-off inherent in oracle-based perpetuals: external feeds can improve alignment with offchain reference pricing, but they can also produce sudden mark-price jumps during extreme events. Trade.xyz’s decision to reimburse liquidation losses is an attempt to address user harm after such a jump, while its stated intent to adjust how it weighs internal order books suggests it may seek to make future outcomes less dependent on a single external print.
As eligibility criteria are released and payouts begin, market participants will likely focus on whether reimbursed losses are limited narrowly to the affected mark-price window or extend to positions impacted by broader volatility. Traders should also watch for any subsequent technical or policy updates from Trade.xyz regarding oracle handling and the balance between external reference pricing and Hyperliquid’s own order-book signals.
Myanmar’s combined Parliament approved the Anti-Online Scam Bill on July 28 after reconciling amendments adopted by its lower and upper chambers.
Summary
- 10-year-to-life terms cover crypto scams and scam-centre operations under Myanmar’s published May draft legislation text.
- Parliament approved the bill July 28 after reconciling amendments previously adopted by both legislative chambers.
- Final text, presidential assent and commencement date remain unconfirmed in publicly available official records online.
The legislation targets digital-currency fraud, online scam centres, forced scam labour and financial infrastructure used by fraud networks.
The state-run Global New Light of Myanmar reported that the Pyidaungsu Hluttaw approved the bill in full. However, the final amended text, a presidential assent notice and a commencement date were not publicly available as of July 29. The exact penalties therefore remain based on the May draft and comments from lawmakers who reviewed the final version.
What penalties does the Myanmar crypto scam bill contain?
The 63-section draft published in May proposed prison terms of 10 years to life for operating an online scam centre or committing “digital currency fraud.” It also covered recruitment, financial facilitation, telecommunications support and other conduct connected with organised online fraud.
For violence, torture, unlawful arrest, detention or cruel treatment used to force another person into scam work, the draft allowed life imprisonment or capital punishment. It required the death penalty when that conduct caused death. Lower House lawmaker Aye Chan told AFP that the final bill retained the death-penalty provision and said there were “not many significant changes” to its important sections.
Because the enacted wording has not been released, it is not yet possible to confirm whether every offence, sentencing range and exemption survived the parliamentary amendments unchanged.
The bill creates broad financial and data powers
The draft establishes a central committee, regional bodies and an Anti-Scam Centre. It authorises coordination with foreign governments and information sharing among banks, telecommunications providers and state agencies. It also provides procedures for freezing suspicious accounts and confiscating proceeds or equipment linked to scams.
Human Rights Myanmar criticised the proposal before passage, arguing that its surveillance, account-freezing and website-blocking powers could be used against journalists, civil society and political opponents. The group called the bill “a repressive security instrument.” That is an advocacy assessment rather than a finding by a court or independent regulator.
The organisation also questioned the use of capital punishment and the absence of independent oversight. Those concerns will remain difficult to assess fully until authorities publish the final law and any implementing rules.
Scam compounds remain active despite regional raids
The bill arrives as evidence shows Myanmar’s scam-centre industry remains active. Satellite analysis reviewed by Wired identified at least 25 suspected sites built or expanded around Myawaddy during the first half of 2026. The International Justice Mission said the construction suggested previous crackdowns had not stopped the networks.
A July United Nations Office on Drugs and Crime assessment said fraud groups were responding to raids by dispersing, relocating and using smaller operations. Separately, the U.S. Justice Department charged two Chinese nationals in April over an alleged cryptocurrency-investment fraud compound in Burma and announced the restraint of about $700 million in cryptocurrency alongside broader website seizures.
As crypto.news previously reported, U.S. authorities also seized a fraudulent investment domain operated from Burma’s Tai Chang compound. In related coverage, crypto.news reported that India opened an investigation into allegations that citizens were trafficked into Myanmar and forced to conduct crypto scams.
Promulgation and enforcement are the next steps
The immediate next step is publication of the final amended law. That should clarify whether presidential assent has occurred, when the rules begin, which agencies receive enforcement authority and whether transitional provisions apply.
Implementation will also require financial institutions and telecom companies to build reporting and information-sharing systems. International cooperation will be central because victims, workers, operators, payment routes and digital assets often cross several jurisdictions.
No verified crypto-market price reaction was directly attributable to the parliamentary vote. The practical test will be whether authorities pursue senior operators and financial networks, protect trafficking victims and apply the law with due-process safeguards rather than relying mainly on raids against workers.
Crypto is trading on a cautious note. The upswing in bitcoin, the leading digital asset by market value, has stalled since last Wednesday, with prices pulling back to just under $64,000 from the high of nearly $67,000.
July hike to end forward guidance
Citadel’s rate hike call is less about where the data land and more about tactics, specifically, why Warsh has more to gain from raising rates today than from waiting until September.
A surprise hike Wednesday, Frank Flight, head of macro strategy at Citadel Securities, writes, “would emphatically end the forward guidance era in which every policy move is pre-signaled and act as a cleansing event, forcing markets to price what the data imply the central bank should do rather than what they expect it will do.”
It would also “clearly underline Federal Reserve independence after two years in which it has been repeatedly questioned.”
Forward guidance is a tool central banks use to signal how they expect interest rates to evolve over the coming months, helping households and businesses adjust consumption, investment, and borrowing without sudden shocks.
Over time, however, forward guidance has, according to many, including Warsh, distorted the market’s reaction function to the point where assets began trading off expectations of how the Fed might respond to news and data, rather than on the underlying data itself.
Regulated Layer One, or RL1, began operations on July 28 as a Luxembourg-based European Cooperative Society owned by 10 financial institutions.
Summary
- Ten institutions launched RL1 as a Luxembourg cooperative for regulated tokenized markets and digital money.
- SWIAT’s production network processed more than 50 transactions worth over €700 million before RL1’s launch.
- NatWest is expected to join shortly, while KfW and L-Bank continue supporting network expansion efforts.
The founding group includes ABN AMRO, Cecabank, Chartered Investment, Crédit Mutuel Alliance Fédérale, DekaBank, DZ BANK, LBBW, Natixis CIB, SC Ventures and Seturion.
Former SWIAT managing director Henning Vollbehr will lead the cooperative. RL1 now owns the underlying distributed-ledger network, while SWIAT remains its software supplier and technical operator. The launch announcement did not include a new token, public investment product or regulatory approval for a specific security.
RL1 gives 10 institutions equal governance rights
RL1 says each founding member has an equal vote over network governance and development. The structure includes a general assembly, a supervisory board and an operational management board. The network is private and permissioned, although membership remains open to additional regulated financial-market participants.
The current RL1 participant page lists NatWest as “joining soon” and says the bank will enter in the coming weeks. That is a more concrete update than the launch release, which said discussions were underway. No formal accession date has been published. KfW and L-Bank are supporting the network’s expansion but are not among the 10 institutions named as founding cooperative members.
The site also identifies eight technical operators linked to the existing SWIAT network, including DekaBank, LBBW, SC Ventures and SWIAT. However, it states that migration of those validators to RL1 is still intended. The list should not be treated as confirmation that every operator has completed the transfer.
SWIAT gives RL1 an existing production record
RL1 is based on SWIAT’s production network, which operated for three years before ownership moved to the cooperative. The platform completed more than 50 transactions with a combined value above €700 million, according to the launch statement. Those figures refer to the inherited SWIAT network rather than activity completed by the newly established cooperative after July 28.
SWIAT’s applications, including German electronic securities registry services, remain with SWIAT. The company said those services can migrate to RL1 without changing the software layer. The separation leaves the cooperative owning the common network while SWIAT continues providing technology and operating services.
The arrangement is intended to reduce reliance on separate institutional ledgers that cannot easily exchange assets or settlement instructions. Whether RL1 achieves that goal will depend on additional members, interoperable applications and sustained transaction activity. This is an inference based on the cooperative’s stated objectives. RL1 has not published volume targets or a timetable for moving all existing SWIAT services.
RL1 targets bonds, collateral and digital money
The network is designed to support tokenized bonds, funds, real-world assets, collateral, repo transactions, securities lending and digital money. RL1 also lists stablecoins and commercial or central-bank money among potential settlement tools. These are proposed use cases, not confirmation that every product is already live.
A practical test is expected through KfW’s third blockchain bond. KfW issued the €100 million security in June and plans an autumn migration of its registrar and underlying ledger from Cashlink and Polygon to DekaBank and SWIAT/RL1. KfW also intends to use the Eurosystem’s Pontes infrastructure for later payments, although the migration and Pontes connection have not yet been completed.
ECB settlement plans could shape RL1 adoption
The European Central Bank plans to launch Pontes in the third quarter of 2026. Pontes will connect market DLT platforms with the Eurosystem’s TARGET Services so tokenized transactions can settle in central-bank money. The longer-term Appia program is expected to produce a blueprint for an integrated European tokenized financial ecosystem by 2028.
As crypto.news reported, the ECB views central-bank money as a necessary settlement anchor for tokenized securities, deposits and stablecoins. In related coverage, crypto.news reported that RL1 member Seturion is building blockchain settlement links with Société Générale and SG-FORGE.
RL1’s claim that it will become “the connecting infrastructure for Europe’s digital financial market” remains forward-looking. Its next measurable steps are NatWest’s formal admission, validator and application migrations, KfW’s autumn bond test and technical connectivity with Pontes. No deadlines have been announced for broader membership or commercial-scale transaction targets, and no verified market-price reaction followed the cooperative’s launch.
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