Payward, the corporate entity behind the popular cryptocurrency brokerage platform Kraken, has announced an ambitious plan to bring on‑chain perpetual futures to its U.S. client base through the Hyperliquid protocol. This move follows Payward’s recent $550 million acquisition of Bitnomial, a well‑established U.S.
futures brokerage that specializes in crypto‑derivative products. By integrating Bitnomial’s regulatory expertise and operational infrastructure with Hyperliquid’s high‑performance, decentralized trading engine, Payward aims to become the first fully registered U.S.
exchange to offer on‑chain perpetual futures—a product that blends the liquidity and speed of decentralized finance (DeFi) with the compliance safeguards required by U.S. securities law.
### Why On‑Chain Perpetual Futures Matter Perpetual futures are derivative contracts that allow traders to speculate on the price movement of an underlying asset without an expiration date. Traditionally, these contracts have been hosted on centralized exchanges, where the clearing and settlement processes are managed by a single entity. An on‑chain implementation, however, records every trade, margin adjustment, and settlement directly on a blockchain, typically Ethereum or a layer‑2 solution.
This architecture offers several advantages: transparency, immutable audit trails, reduced counterparty risk, and the ability to tap into a broader ecosystem of decentralized liquidity providers. For U.S.
traders, the prospect of accessing such products while remaining under the protection of a regulated exchange could represent a significant step forward in bridging the gap between traditional finance and DeFi. ### The Hyperliquid Protocol: A Technical Overview Hyperliquid is a next‑generation, permissionless trading protocol designed to deliver sub‑millisecond latency, high throughput, and provably fair order matching.
It leverages a combination of on‑chain smart contracts for settlement and off‑chain order books for order entry, employing a validity proof system that ensures orders cannot be manipulated after submission. The protocol also supports cross‑margining, allowing traders to allocate collateral across multiple positions, and features automated funding rate calculations that keep perpetual prices in line with spot markets. By building on a layer‑2 rollup, Hyperliquid can achieve the scalability required for institutional‑grade trading volumes while keeping transaction costs low enough for retail participants. ### Bitnomial’s Role in the Partnership Bitnomial, founded in 2018, has built a reputation for providing regulated crypto‑derivative services to U.S.
investors. The firm holds the necessary registrations with the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), and it maintains robust AML/KYC procedures. Payward’s acquisition of Bitnomial gives it immediate access to these licenses, as well as an experienced compliance team and a suite of risk‑management tools tailored to the U.S. market.
By merging Bitnomial’s regulatory framework with Hyperliquid’s technology stack, Payward can launch a product that satisfies both the demand for decentralized trading experiences and the stringent oversight imposed by U.S. regulators. ### Regulatory Landscape and Compliance Strategy Offering on‑chain derivatives to U.S.
customers requires navigating a complex regulatory environment. The CFTC classifies most crypto‑futures as commodity derivatives, subjecting them to the Commodity Exchange Act.
Meanwhile, the SEC has signaled that certain crypto‑based contracts may be securities, depending on their characteristics. Payward intends to file the appropriate registration statements, maintain continuous reporting, and implement real‑time surveillance systems to detect market abuse. Additionally, the firm will employ a custodial solution that keeps user funds segregated, with smart‑contract audits performed by third‑party security firms to ensure that the on‑chain settlement layer does not expose clients to unintended risks.
### Market Impact and Competitive Positioning If successful, Payward’s on‑chain perpetual futures could reshape the U.S. crypto‑derivatives market. Competitors such as CME Group, Binance US, and Coinbase have already launched regulated futures, but none currently offer a fully on‑chain product. By being the first mover, Payward can attract sophisticated traders seeking the transparency of DeFi combined with the reassurance of a regulated entity.
The initiative may also pressure other exchanges to explore similar hybrid models, potentially accelerating the broader adoption of decentralized infrastructure within the regulated financial sector. ### Timeline and Future Developments Payward has indicated that a beta launch is slated for early 2025, with a full rollout expected by the end of that year, pending regulatory clearance. The initial offering will focus on major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), with plans to expand to a wider array of assets, including layer‑2 tokens and select altcoins, as liquidity deepens. In the longer term, the company envisions integrating additional DeFi primitives—such as automated market makers and lending protocols—into its platform, creating a seamless bridge between spot, derivatives, and yield‑generating services.
### Conclusion The convergence of Payward’s acquisition of Bitnomial, the capabilities of the Hyperliquid protocol, and the growing appetite for regulated yet decentralized trading solutions positions the company to become a pioneer in the U.S. on‑chain derivatives space. By delivering perpetual futures that are both transparent and compliant, Payward aims to set a new standard for how crypto products can be offered to mainstream investors, potentially ushering in a new era where the benefits of DeFi are accessible within the protective framework of traditional financial regulation.