The SK Hynix perpetual futures contract on the Hyperliquid decentralized exchange experienced a flash crash between 23:00 and 23:01 UTC. The price of the contract, which tracks the Seoul-traded stock, dropped 20% to $900 during this one-minute window.

The sharp decline triggered $57.4 million in liquidations across 960 accounts. Data shows the contract's mark price fell to $917.25 at 23:01 UTC. The crash originated from an erroneous trade on South Korea's NXT exchange, which was relayed by an oracle to the Hyperliquid platform.

Trade.xyz, the operator of the SK Hynix market on Hyperliquid, announced it would reimburse eligible traders for their liquidation losses. The company described the reimbursement as a 'one-time discretionary decision.' Trade.xyz operates the market under Hyperliquid's HIP-3 framework, where each market's price is the median of three inputs: the deployer controls two, and Hyperliquid controls one.

Broader Market Context

The incident occurred against a backdrop of significant volatility in traditional markets. South Korean chipmaker SK Hynix shares dropped 15% to 1,550,000 won ($1,762) on the same day, while South Korea's benchmark Kospi index fell 11%. SK Hynix American depositary receipts (ADRs) also declined 4.5% in pre-market trading to $136.51. Since reaching a peak of 1,947 won on June 26, SK Hynix shares have fallen nearly 48%.

Global tech stocks also faced pressure. US-based Nvidia shares slid 5% following a Wall Street Journal report that the AI-chip maker could provide a financial backstop of about $250 billion for an OpenAI-backed data-center project.

Platform Activity and Structure

Flash crashes on crypto exchanges are common between the US market close and the opening of markets in Asia due to thin liquidity. Hyperliquid has emerged as a popular venue for traders looking to express views on traditional assets.

The SK Hynix contract had generated over $1.5 billion in 24-hour volume and held nearly $600 million in open interest prior to the crash. Trade.xyz has been a major contributor to the platform's activity, accounting for more than $22 billion of HIP-3's first $25 billion in cumulative volume. The operator recently launched an officially licensed S&P 500 perpetual using S&P Dow Jones Indices data.