Hyperliquid and tradeXYZ Push CFTC to Open U.S. Energy Perps

Hyperliquid Policy Center and tradeXYZ filed a joint letter with the CFTC on August 26 seeking a regulated U.S. path for energy perpetual contracts on WTI crude, Brent crude and Henry Hub natural gas after their markets logged more than $500 billion in cumulative volume. The products already trade 24/7 on Hyperliquid for non-U.S. users and, the groups argue, already deliver the weekend price discovery traditional futures cannot.

The filing answers the Commission’s June request for comment on continuous trading and energy perps. It arrives after digital-asset perpetuals won limited CFTC clearance in May and after a sharp Middle East supply shock showed where risk management now happens when CME floors stay dark.

What the Joint Letter Requests

Hyperliquid Policy Center, an independent research and advocacy group tied to the Hyperliquid ecosystem, and tradeXYZ, the first major third-party deployer of HIP-3 markets, submitted the joint comment letter on energy perpetuals in response to RIN 3038-AF75. tradeXYZ has run the markets since October 2025. By late summer 2026 its books held roughly $4 billion in open interest across more than 80 markets and had processed over 440 million fills. Energy products sit inside that total.

No tradeXYZ market is available to U.S. persons today. The interface geoblocks American wallets. The letter asks the CFTC to change that under existing Core Principles rather than new legislation. The five concrete steps are straightforward:

• Adopt a technology-neutral, principles-based framework for energy perpetuals and 24/7 trading
• Confirm that exchanges and clearinghouses may run continuously when they meet Core Principles
• Clarify how “business day” and other time-bound rules apply to markets that never close
• Recognize stablecoins and tokenized traditional assets as eligible margin for cleared derivatives
• Allow compliant on-chain systems for trading, margin, clearing, settlement and recordkeeping

The groups also want leverage limits calibrated by asset, plain-language funding and liquidation disclosures, and market-integrity rules. They stress perpetual contracts should sit alongside dated futures, not replace them. Dated contracts keep their role for specific delivery months and physical settlement. Perps handle continuous exposure without the monthly roll.

The Weekend That Made the Case

On February 28 conflict in the Middle East halted regional energy exports. U.S. oil futures were closed for part of the initial shock. Airlines, refiners and funds with crude exposure had limited regulated options until Sunday evening. On-chain oil-linked perpetuals on Hyperliquid kept trading. Roughly two-thirds of the total price move from Friday close to Sunday reopen had already occurred there, the filing states.

Research attached to the letter examined nearly two dozen weekend closures of the CME WTI benchmark after the tradeXYZ crude market launched. In nearly 75 percent of those weekends the perpetual’s closing price sat closer to the actual Sunday reopening than the benchmark’s own Friday close. Larger funding premiums reliably pointed the direction of the next reopen move. The same pattern has held for years in bitcoin perpetuals versus CME bitcoin futures.

Key weekend numbers from the filing and supporting study:

• Two-thirds of the first Iran-conflict weekend oil move already priced on-chain before U.S. futures reopened
• Nearly 75 percent of sampled weekends saw the perpetual finish closer to the Sunday price than Friday’s close
• $1.58 million simulated reopening loss on a $10 million crude position cut to roughly $62,000 net with a perpetual hedge
• No statistically significant deterioration in CME WTI reopening quality after the perpetual launched

Brent later touched nearly $120 a barrel. Jet-fuel prices roughly doubled in the following weeks. Airlines that had hedged absorbed the shock better than those that had not. The letter notes that jet fuel still accounts for about 31 percent of airline operating costs and that many carriers hedge crude rather than the crack spread itself, leaving residual basis risk a continuous crude instrument can help manage between scheduled rolls.

How Energy Perps Keep Prices Anchored

A perpetual contract has no expiry, no delivery date and no forced roll. Funding payments every hour (capped at ±4 percent in the tradeXYZ design) transfer cash between longs and shorts so the contract price stays near the reference. When the perpetual trades rich, longs pay shorts; when it trades cheap, the reverse occurs. Funding is not a venue fee. It is a pure peer-to-peer incentive.

tradeXYZ markets run a two-mode reference system. During underlying market hours the oracle pulls institutional liquidity-provider and real-time data. When those sources go dark the system switches to an internal mechanism drawn partly from the live order book, with hard discovery bounds and per-tick clamps so prices cannot free-float. The mark price used for margin and liquidation is the median of three independent inputs, one generated by HyperCore itself. No single feed, including the deployer’s, can dictate it alone.

After the launch of the crude perpetual, CME WTI reopening spreads and stabilization times showed no meaningful worsening. Busier perpetual weekends did not predict worse traditional reopenings. The instruments appear complementary rather than cannibalistic so far.

Who Sits Exposed When Futures Sleep

Commercial users with continuous crude exposure are the clearest stake-holders. Airlines sell tickets months ahead at fixed prices while buying fuel over time. Refiners and funds face the same calendar mismatch. When a geopolitical shock hits on a Saturday the only regulated U.S. venue is closed. Offshore and on-chain books become the only continuous price signal and the only place to adjust hedges without waiting for the open.

The letter quotes the practical cost: a simulated short perpetual against a $10 million long crude position over the March 6 weekend cut the reopening loss from $1.58 million to about $62,000 after funding and fees. That is not a full replacement for crack-spread or jet-fuel hedges. It is a tool that can sit between them when the main market is dark.

Incumbent exchanges have noticed. Earlier reporting described ICE and CME conversations on Capitol Hill about the risks of unregulated on-chain oil pricing. Hyperliquid’s growing share of weekend volume makes the competitive pressure concrete. tradeXYZ markets already account for a large slice of Hyperliquid’s overall perpetual activity and have at times exceeded native crypto volume. Similar RWA growth shows up elsewhere on the chain, including silver volume already beating Solana on Hyperliquid.

On-Chain Rails That Never Need a Banking Day

Traditional futures close for more than trading-floor convenience. Variation margin, settlement banks, surveillance staffing and end-of-day processes all run on the banking calendar. Continuous operation would require those systems to work without maintenance windows or next-business-day recovery assumptions.

Hyperliquid’s design collapses execution, matching, margining, liquidation, funding and settlement into a single on-chain state transition. Positions are pre-funded. Margin is reassessed on every trade. Liquidation is rules-based and staged. Across tradeXYZ markets, ordinary order-book liquidation has resolved 97.9 percent of all notional liquidated to date; pre-specified backstops handle the rest. Every order, fill, margin change and liquidation is written to a public ledger that supports continuous surveillance without new reporting burdens on participants.

Stablecoins and tokenized assets move outside banking hours, which is why the letter asks the CFTC to treat them as eligible margin. The same logic underpins permissionless prediction markets on the same chain: once the infrastructure runs continuously, new product types follow.

Oil prices move 24/7. The markets that American businesses use to hedge them do not. When another crisis breaks on a Saturday night, American businesses should not have to wait until Sunday evening to manage their risk.

Hyperliquid Policy Center, official statement accompanying the filing

The full operational record and legal analysis sit in the full filing with operational data submitted to the Commission.

What Happens if the CFTC Stays Silent

The Commission’s June CFTC request for comment on 24/7 energy already framed the two questions: extending standard futures hours and listing energy perpetuals. Comment deadlines were extended to August 26, the same day this letter landed. Chairman Michael Selig has publicly emphasized building a data-driven record while protecting against manipulation.

Digital-asset perpetuals already trade under limited U.S. rules. Energy is the next asset class flagged for case-by-case review. The letter argues the economic structure of a perpetual (funding, margin, continuous convergence) does not change when the reference asset switches from bitcoin to WTI. Treating them differently would leave the product structure intact while simply denying U.S. commercial access.

If regulators open the path, American airlines, refiners and funds gain a continuous hedge tool under CFTC oversight and on-chain transparency. If they do not, the $500 billion experiment continues offshore, weekend shocks continue to be priced elsewhere, and the next Saturday-night supply disruption will again leave U.S. balance sheets waiting for Monday’s open.

The moat around traditional energy futures was never the contract design itself. It was the calendar. That calendar has already been breached by volume and by crisis performance. The only remaining question is whether U.S. regulation will catch up before the next shock arrives.