Trade.xyz disclosed that traders whose SK Hynix perpetual contracts were liquidated due to a sharp drop on the evening of July 27 will receive compensation. The platform characterized this as a one-time discretionary decision and stated that the details of the compensation will be announced later, with payments expected to be completed within a few days.
This volatility occurred around 23:01 UTC. Company data shows that the contract mark price rapidly dropped from approximately $1128 to $917, a single decline of about 19%. The mark price is the reference value used by the platform to calculate profits and losses and trigger liquidation; therefore, after the price drop, the relevant positions were immediately liquidated by the system.
The platform claims the oracle did not malfunction.
The company stated that the price drop was not triggered by a system malfunction, nor did it reveal any signs of manipulation. The change in the marked price was caused by a real trade in a low-liquidity pre-market trading venue in South Korea. This trade was captured by multiple independent data providers and transmitted to the platform's oracle.
Trade.xyz stated that the oracle operated according to established rules, simply reflecting the unusually large transaction in the external market. Given insufficient market depth, a single order was enough to drive down the price by nearly one-fifth, ultimately triggering contract liquidation.
The compensation is a one-time arrangement.
The company emphasizes that this compensation does not guarantee that similar situations will be handled in the same way in the future. The platform will announce separately the rules regarding eligibility for compensation and how losses will be calculated.
Judging from its statements, Trade.xyz is attempting to pinpoint the responsibility as a market structure issue rather than a technical failure. In other words, the platform acknowledges that the outcome caused actual losses for users, but maintains that its core system was executed as designed at the time.
The weighting of price sources will be adjusted.
More attention is focused on subsequent adjustments. Trade.xyz stated that it is reassessing its use of external price sources and will increase the weight of its own order book in price formation in the future. The company believes that as the platform's liquidity deepens, the reference value of internal transaction data for price judgment is increasing.
This line of thinking aligns with some research findings in the crypto derivatives market. Some studies suggest that Bitcoin and Ethereum perpetual contracts sometimes reflect price changes before the spot market, rather than simply following the spot market.
- Event time: Around 23:01 (UTC) on July 27
- Marked price: fell from approximately $1128 to $917
- Platform's statement: Compensation will be paid out in a one-time, discretionary manner.
Additional information:The CoinDesk headline stated that the liquidation losses involved in this incident amounted to approximately $60 million.
