Hyperliquid’s S&P 500 perpetual market topped $100 million in 24-hour volume on Friday, making it one of the 10 largest markets on the booming blockchain.
It’s impressive growth for a market that debuted just days earlier, and it’s the latest sign that blockchain-based traders are eager to trade in futures for traditional assets.
Hyperliquid has become a popular venue for weekend trading of tokenised oil futures amid the war in Iran, topping $1 billion in weekend volume earlier this month.
As traders increasingly use Hyperliquid and other blockchains to trade over nights and weekends, they may become a venue for true price discovery.
Oracles that bring the price of real-world assets onchain give enormous weight to an asset’s most recent price on traditional markets in order to prevent dramatic price swings in relatively illiquid onchain markets, Marcin Kazmierczak, founder of crypto oracle RedStone, told DL News.
“But as we move forward and this trading volume on HIP-3 keeps growing, this divergence between Friday closing and weekend trading can be larger and larger,” he added, referring to a Hyperliquid feature that allows users to deploy new markets without seeking permission from the blockchain’s creators.
Trade[XYZ], the firm that licensed S&P’s index for use on Hyperliquid, has a name for its feature limiting after-hours price movements: “Discovery Bounds.” It rolled out an updated version of this feature on Thursday for six new markets in order to allow prices greater freedom to move as trading outside regular business hours increases.
That feature was first introduced earlier in the week, after one of Trade[XYZ]’s oil markets hit $1 billion in weekend volume.
“To realise the radical concept of 24/7 trading, we made an explicit trade-off: limit the extreme tails of price movement, and the range within becomes substantially more conducive to genuine price discovery,” a pseudonymous employee wrote on X last week.
But Trade[XYZ]’s blockbuster markets have changed that calculus.
“With more participants, deeper liquidity, and higher-signal price movements, we’ve reached a point where the static protections themselves have become the primary constraint on price discovery,” they wrote.
And there’s much more room for onchain markets to reduce their reliance on price signals from traditional markets, according to Kazmierczak — all they need to do is grow.
“The closing price on Friday, it can have a parameter of relevance — let’s call it 90% and then 10% is the price discovery that’s happening [onchain] over the weekend,” Kazmierczak said.
“As more and more volume happens on Hyperliquid, this parameter can be diminished to, let’s call it 80% and maybe 70% and so on. It’s just the question of how much of the volume and the serious players will be playing.”
