Trade.xyz said it will reimburse traders affected by a 19% plunge in its SK Hynix perpetual futures contract, which was triggered by a single pre-market transaction in South Korea. The exchange said the incident was not caused by an oracle failure or a breakdown in its systems.
The decentralized perpetuals platform explained that the contract’s mark price, which is used to calculate profits, losses, and liquidation levels, dropped from around $1,128 to $917 at 23:01 UTC on July 27. The sharp move was linked to a completed trade reported by multiple independent data providers, with the price feed tracking activity from South Korea’s primary pre-market trading venue.
Trade.xyz said its oracle system operated exactly according to its design specifications. Based on the available evidence, the company found no signs of technical malfunction or intentional manipulation.
The oracle accurately transmitted real market data from an external source into the blockchain-based trading system. However, the underlying market lacked sufficient liquidity, allowing a single order to push prices down nearly 20% and automatically trigger liquidations for leveraged traders.
The exchange emphasized that the reimbursement program is a one-time discretionary decision and should not be viewed as a permanent policy for future events. Trade.xyz said it will release details on eligibility requirements and expects affected users to receive payouts within days.
Beyond compensation, the incident has led the platform to reassess its approach to price discovery. Trade.xyz said it is evaluating whether its own order books should play a larger role in determining contract prices, as internal liquidity and trading activity continue to grow.
The event highlights a broader issue in crypto market structure, where perpetual futures markets can sometimes influence asset prices instead of merely following spot markets. Research has shown similar behavior in major cryptocurrencies such as Bitcoin and Ether, while some pre-launch perpetual markets have produced more accurate price signals than traditional valuation processes.
The SK Hynix perpetual contract collapse occurred shortly before a major selloff in South Korean equities. Shares of SK Hynix later fell about 17% on Wednesday after the company reported a 557% surge in quarterly profit that still missed market expectations.
