Trade.xyz Refunds Traders After SK Hynix Glitch Erases $60M in Longs

The trading platform trade.xyz has started to repay traders whose leveraged positions were liquidated after a single off-market trade of SK Hynix stock in South Korea fed into its on-chain oracle. The incident, which trade.xyz confirmed on Aug. 1, wiped out between $57 million and $80 million in long positions across roughly 960 accounts on Hyperliquid, according to Galaxy Research.

The chain began on July 27 in the pre-market session of NextTrade, South Korea’s stock exchange. One share of SK Hynix traded at 1,272,000 won, about $868, which was 29.96% below the previous close. The price was within the exchange’s daily limit, but it was far below where the stock had been trading. Buyers stepped in, and the price rebounded toward 1.7 million won within minutes.

By then, the damage was done.

The SKHYNIX perpetual on trade.xyz tracks the dollar value of one SK Hynix share. It switches to external pricing once NextTrade opens. The company said in its incident report on July 29 that the $868 transaction was valid, confirmed by multiple independent market data providers. The oracle functioned as designed.

trade.xyz calculates its mark price by averaging three data sources and applies a smoothing filter to dampen sudden swings. Galaxy Research’s Will Owens said the filter neutralized about 11% of the roughly 30% anomaly. The remaining 18.7% drop was enough to trigger liquidations.

The mark price fell from $1,127.9 to $917.25 by 23:01 UTC on July 27, moments after NextTrade’s pre-trade session opened. Open interest in the contract dropped from $481 million to $331 million in minutes. Galaxy Research counted 960 liquidated long accounts, with notional losses ranging from $57 million to $80 million. Short positions were automatically deleveraged as prices fell. A backstop address absorbed 406 liquidated longs until it too was liquidated.

trade.xyz calculated refunds using a reference price of $1,115.5. Traders whose losses did not exceed $10,000 were reimbursed automatically. Those with larger losses had to apply. The company called the refunds a “one-time discretionary decision” and said the system operated correctly throughout.

The incident shows the scale of builder markets on Hyperliquid. trade.xyz, a perpetual futures arm of the tokenization protocol Unit, was the first market to launch under HIP-3, an upgrade that went live on mainnet in October 2025. Under HIP-3, any team that stakes 500,000 HYPE (about $27 million) can create its own perpetual markets.

trade.xyz now accounts for more than 90% of HIP-3 open interest and nearly 98% of builder market trades, according to Galaxy Research. The market has grown quickly. HIP-3 markets represented about 2% of Hyperliquid’s total perpetual trading volume at the start of the year. Now they represent roughly half. Builder market volume alone reached about $98 billion over the past 30 days. HIP-3 open interest stands at roughly $3.6 billion.

The SK Hynix glitch was not an isolated pricing error. The stock had been under pressure that week, falling 14.65% to 1.55 million won. It dropped further after the company’s quarterly earnings the next day. The decline triggered circuit breakers on multiple trading days for the first time in Korean market history, Galaxy Research noted. The initial $868 trade, though anomalous, occurred in a context of real selling.

The refunds are a one-off. trade.xyz said it is accelerating work on improving its pricing during stressed conditions. The company made clear that the protocol met its design specs.