Trade.xyz announced that it will compensate traders who suffered liquidations after its SK Hynix perpetual futures contract dropped 19% in a sudden move linked to a single pre-market trade in South Korea. The exchange said the incident resulted from market conditions rather than any failure of its oracle or trading infrastructure.

The platform said the contract’s mark price — the reference price used to determine unrealized profits, losses, and liquidation triggers — fell from approximately $1,128 to $917 at 23:01 UTC on July 27. The move was based on an executed trade confirmed by multiple independent data providers, with the price feed reflecting activity from what Trade.xyz identified as South Korea’s leading pre-market trading venue.

According to the exchange, its oracle system operated as intended and accurately reported the available market data. Trade.xyz said there was no evidence of a technical issue or deliberate price manipulation behind the incident.

The oracle performed its role by transmitting an actual external market transaction onto the blockchain-based platform. However, the limited liquidity in the underlying market meant that a single trade had an outsized impact, pushing the price down nearly one-fifth and triggering automatic liquidations for leveraged positions.

Trade.xyz clarified that the planned reimbursements are a discretionary, one-time response and do not establish a guarantee for similar situations in the future. The company said it will publish the criteria for affected traders and expects compensation payments to be processed within several days.

The incident has also prompted the exchange to review its approach to price formation. Trade.xyz said it is exploring a greater role for prices generated from its own order books, which it believes are becoming deeper and increasingly representative compared with external market sources.

The event highlights ongoing discussions around crypto market structure, particularly the influence of perpetual futures markets. Research has shown that derivatives markets for assets such as Bitcoin and Ether can sometimes lead spot price movements rather than simply follow them. In some cases, pre-launch perpetual contracts have also provided stronger price discovery than traditional market mechanisms.

The SK Hynix contract collapse happened shortly before South Korean stock markets experienced one of their sharpest declines in recent history. SK Hynix shares later dropped around 17% on Wednesday despite reporting a 557% increase in quarterly profit, as the results still failed to meet investor expectations.