Payward to Launch US-Regulated Perpetual Futures on Hyperliquid
Kraken's parent company plans to integrate regulated derivatives with Hyperliquid's blockchain infrastructure.
1Regulated On-Chain Derivatives
Payward plans to introduce US-regulated perpetual futures on Hyperliquid's blockchain, combining decentralized infrastructure with traditional financial oversight. The setup uses Hyperliquid's on-chain order book while maintaining compliance through Payward's regulated entities - Bitnomial Exchange and NinjaTrader. This hybrid model represents a significant step in bridging DeFi with regulated markets, though trading access will be strictly permissioned unlike Hyperliquid's usual open protocol.
2Three-Party Regulatory Structure
The proposed structure divides responsibilities: Hyperliquid provides blockchain infrastructure, Bitnomial Exchange administers markets as HIP-3 deployer, and Bitnomial Clearinghouse handles settlements. NinjaTrader manages customer accounts, with trades requiring approval from both NinjaTrader and Bitnomial allowlists. This multi-entity approach ensures regulatory obligations remain with licensed firms (CFTC-registered Bitnomial and NFA-member NinjaTrader) while keeping Hyperliquid itself unregulated as purely an execution layer.
3Existing Regulatory Framework
Payward's May 2023 acquisition of Bitnomial provided crucial US derivatives licenses: Bitnomial Exchange as a designated contract market and Bitnomial Clearinghouse as a registered derivatives clearing organization. These existing registrations enable the Hyperliquid integration without requiring new approvals for the underlying regulatory structure. The company already offers perpetual contracts on Kraken Derivatives US through this framework, covering major cryptos like Bitcoin and Ethereum.
4Technical Implementation
The HIP-3 framework normally allows permissionless market creation on Hyperliquid, with deployers controlling contract specs, oracles, and leverage limits. Payward's version transfers these controls to regulated entities while maintaining Hyperliquid's core blockchain functionality. This preserves Hyperliquid's public infrastructure but overlays institutional-grade compliance mechanisms - a novel approach that could set precedent for other DeFi protocols seeking regulated access.
5Strategic Expansion
Hyperliquid represents the first protocol in Payward's multi-protocol strategy to expand regulated crypto derivatives. The company claims no registered US exchange has previously deployed on Hyperliquid, positioning this as pioneering infrastructure integration. However, the project remains subject to regulatory approval, with key details like supported assets, launch timeline, and liquidity integration still undisclosed - suggesting ongoing negotiations with authorities.
6Market Differentiation
Unlike Payward's existing perpetuals on Kraken Pro (which use Bitnomial's infrastructure), the Hyperliquid version would offer distinct technical architecture while maintaining identical regulatory compliance. This demonstrates Payward's strategy to provide institutional clients multiple access points to the same regulated products, potentially attracting different segments of the professional trading market.
7Unresolved Operational Details
Critical trading parameters remain unspecified, including leverage limits, collateral requirements, margin rules, funding mechanisms, and position caps. These will ultimately follow Bitnomial Exchange rules rather than Hyperliquid's standard protocols. The lack of clarity on whether the markets will connect to existing Hyperliquid liquidity pools also creates uncertainty about execution quality and market depth for potential participants.
8Regulatory Implications
The proposal tests boundaries of decentralized finance regulation by maintaining Hyperliquid's technical decentralization while routing all compliance through traditional financial intermediaries. If approved, this model could provide a blueprint for other DeFi protocols to offer regulated products without becoming regulated entities themselves - potentially accelerating institutional adoption while preserving blockchain's core value propositions.