Payward, the parent company behind the popular cryptocurrency brokerage platform Kraken, has announced an ambitious plan to bring on‑chain perpetual futures to its U.S. client base by leveraging the Hyperliquid protocol. The move follows Payward’s recent $550 million acquisition of Bitnomial, a well‑established U.S. futures brokerage that specializes in regulated derivatives trading.
By combining Bitnomial’s deep regulatory expertise with Hyperliquid’s cutting‑edge decentralized technology, Payward aims to become the first U.S.‑registered exchange to launch a fully on‑chain perpetual futures market that complies with domestic securities and commodities regulations. ### Background on Payward and the Bitnomial Deal Payward has built its reputation over more than a decade as a trusted gateway for retail and institutional investors to access a wide range of digital assets. Its flagship platform, Kraken, offers spot trading, staking, and a growing suite of derivatives products. However, the U.S.
market presents unique challenges, particularly around the offering of futures and other leveraged instruments, which are subject to strict oversight by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). In early 2024, Payward completed the purchase of Bitnomial for $550 million.
Bitnomian, founded in 2015, operates a federally registered futures brokerage and holds the necessary licenses to offer regulated futures contracts to U.S. investors. The acquisition gave Payward immediate access to a fully compliant infrastructure, a seasoned compliance team, and a suite of existing client relationships within the United States. Moreover, Bitnomial’s technology stack—built around real‑time market data feeds, risk management engines, and settlement systems—provides a solid foundation for integrating new product offerings.
### Why Hyperliquid? Hyperliquid is a next‑generation decentralized exchange (DEX) protocol that focuses on high‑throughput, low‑latency trading of perpetual contracts directly on a public blockchain.
Unlike traditional centralized exchanges, Hyperliquid’s architecture stores order books, trade execution, and settlement on‑chain, ensuring transparency and immutability while still delivering performance comparable to legacy platforms. The protocol also supports advanced features such as automated market makers (AMMs) for perpetuals, cross‑margining, and programmable risk parameters. Payward sees Hyperliquid as a strategic partner because the protocol’s design aligns with the company’s vision of blending regulatory compliance with the benefits of decentralization. By using Hyperliquid, Payward can offer its U.S.
users a product that is both auditable—thanks to on‑chain records—and efficient, with settlement times measured in seconds rather than days. Additionally, Hyperliquid’s open‑source codebase allows Payward to customize the smart contracts to meet specific U.S.
regulatory requirements, such as position limits, margin requirements, and reporting obligations. ### The Regulatory Path Forward Launching on‑chain perpetual futures in the United States is not a straightforward task.
The CFTC classifies many cryptocurrency derivatives as commodity futures, which means any exchange offering them must be registered as a designated contract market (DCM) and comply with a host of reporting, clearing, and capital‑adequacy rules. Payward’s acquisition of Bitnomial provides the necessary licensing framework, but additional steps are required to bridge the gap between a decentralized protocol and a regulated exchange. Payward plans to implement a hybrid model where the front‑end trading interface remains under the control of its U.S. subsidiary, ensuring that all user onboarding, KYC/AML checks, and trade monitoring are performed in line with federal law.
Once a user’s identity is verified, the order is routed to Hyperliquid’s smart contracts for execution. Settlement, however, will be recorded on the blockchain, creating an immutable audit trail that regulators can inspect if needed. To satisfy the CFTC’s clearing requirements, Payward intends to partner with a registered clearinghouse that will act as the central counterparty for all perpetual contracts, thereby mitigating counterparty risk. ### Product Features and Market Impact The on‑chain perpetual futures that Payward intends to launch will initially cover the most liquid cryptocurrency pairs, such as BTC/USD, ETH/USD, and a selection of top‑tier altcoins.
Traders will be able to open leveraged positions with up to 20× leverage, subject to risk‑based limits that will be dynamically adjusted based on market volatility and individual account health. Funding rates will be calculated algorithmically to keep perpetual prices in line with underlying spot indices, and the protocol will employ a robust liquidation engine to protect the system from under‑collateralized positions. Because the contracts settle on‑chain, users will benefit from near‑instant finality and the ability to transfer their positions across wallets without needing to rely on a centralized custodian.
This feature is expected to attract sophisticated traders who value both speed and ownership of their assets. Moreover, the transparency of on‑chain data may foster greater market confidence, as price manipulation and hidden order books become harder to conceal. Analysts predict that Payward’s entry into the on‑chain perpetual market could reshape the competitive landscape in the United States. Traditional futures exchanges such as CME and Bakkt have long dominated regulated crypto derivatives, but they operate on proprietary, closed‑source platforms.
By offering a decentralized alternative that still complies with U.S. law, Payward could capture a significant share of the growing demand for crypto leverage among retail and institutional investors.
### Timeline and Future Outlook Payward has outlined a phased rollout plan. The first phase, slated for Q4 2024, will involve extensive testing in a sandbox environment with a limited group of qualified traders. During this period, the company will fine‑tune its risk parameters, integrate the clearinghouse solution, and work closely with regulators to ensure full compliance.
Phase two, anticipated for early 2025, will open the market to a broader audience of U.S. clients, with additional cryptocurrency pairs and higher leverage options added over time. Looking ahead, Payward envisions expanding the Hyperliquid‑based product suite beyond perpetual futures.
Potential future offerings include on‑chain options, swaps, and even tokenized versions of traditional commodities. By maintaining a modular architecture, the company aims to stay at the forefront of innovation while adhering to the evolving regulatory landscape.
In summary, Payward’s strategic acquisition of Bitnomial and its partnership with the Hyperliquid protocol position the firm to become a pioneering force in the U.S. on‑chain derivatives market. By marrying rigorous compliance with the transparency and efficiency of blockchain technology, Payward seeks to deliver a new generation of perpetual futures that meet the needs of both seasoned traders and newcomers alike, potentially reshaping how regulated crypto products are offered in the United States.