Payward, the corporate entity behind the well‑known cryptocurrency brokerage Kraken, has announced an ambitious plan to introduce on‑chain perpetual futures products to its U.S. client base by leveraging the Hyperliquid protocol. This move follows the company’s recent $550 million acquisition of Bitnomial, a U.S.‑focused derivatives exchange that brings both regulatory clearance and a suite of sophisticated trading technology to Payward’s expanding portfolio. By integrating Hyperliquid’s high‑performance, decentralized infrastructure with Bitnomial’s licensed market‑making capabilities, Payward aims to become the first fully registered U.S.

exchange to offer perpetual futures that settle directly on a blockchain, thereby marrying the transparency and security of on‑chain settlement with the compliance standards required by American regulators. ### Strategic Rationale Behind the Initiative The decision to pursue on‑chain perpetual futures is rooted in several converging market trends.

First, the demand for cryptocurrency derivatives in the United States has surged dramatically over the past few years, with retail and institutional traders alike seeking leveraged exposure to digital assets without the need to hold the underlying tokens. Traditional futures contracts, typically cleared through centralized clearinghouses, have faced regulatory scrutiny and operational bottlenecks, prompting innovators to explore decentralized alternatives that can reduce counter‑party risk and improve settlement speed. Second, the Hyperliquid protocol, originally designed for low‑latency, high‑throughput trading of perpetual contracts on a public ledger, offers a unique blend of decentralization and performance.

Its architecture utilizes a combination of optimistic roll‑ups and on‑chain order‑matching engines, allowing trades to be executed in milliseconds while still benefitting from the immutable audit trail of a blockchain. For U.S. traders, this translates into near‑instant trade confirmations, reduced reliance on custodial intermediaries, and a clearer view into the mechanics of price discovery. Third, Payward’s acquisition of Bitnomial provides a crucial regulatory foothold.

Bitnomial holds a Commodity Futures Trading Commission (CFTC) registration and a New York State Department of Financial Services (NYDFS) trust charter, both of which are essential for offering derivatives to U.S. customers in a compliant manner. By merging Bitnomial’s licensed framework with Hyperliquid’s technology, Payward can navigate the complex U.S.

regulatory landscape while delivering a product that retains the innovative edge of decentralized finance (DeFi). ### How the On‑Chain Perpetual Futures Will Work In practical terms, Payward’s on‑chain perpetual futures will function much like traditional perpetual contracts but with key differences in settlement and custody.

Traders will open positions using U.S. dollars or stablecoins that are held in a custodial account overseen by Payward, ensuring that the assets remain within a regulated environment. When a trade is executed, the order is routed to the Hyperliquid smart contract, which records the position on the blockchain and calculates funding rates in real time. Funding rates are a core component of perpetual contracts, designed to keep the contract price aligned with the spot price of the underlying asset.

On Hyperliquid, these rates are computed algorithmically based on market demand and are posted on‑chain, allowing participants to verify the calculations independently. Settlement occurs continuously; profits and losses are reflected in the trader’s custodial balance each funding interval, eliminating the need for a final settlement date that characterizes traditional futures.

Risk management will be handled through a combination of on‑chain margin checks and Payward’s proprietary risk engine, which draws on Bitnomial’s experience in monitoring position limits, liquidation thresholds, and market volatility. Should a trader’s margin fall below the required level, the system will trigger an automated liquidation process that sells the position on the open market and repays the borrowed funds, all recorded transparently on the blockchain. ### Compliance and Consumer Protection One of the most significant challenges in offering crypto derivatives to U.S.

customers is meeting the stringent requirements set forth by the CFTC, the Securities and Exchange Commission (SEC), and state regulators. Payward plans to address these obligations through a multi‑layered compliance strategy.

First, all on‑chain contracts will be wrapped in a regulatory wrapper that ensures only eligible U.S. residents—verified through Know‑Your‑Customer (KYC) and Anti‑Money‑Laundering (AML) procedures—can access the product. Second, transaction data will be reported to the CFTC in real time, satisfying the exchange’s reporting obligations for derivatives trading. Furthermore, Payward will maintain a robust insurance fund, funded partially by a portion of trading fees, to cover unexpected market events and protect users from systemic losses.

This insurance mechanism mirrors the safety nets employed by traditional futures exchanges and demonstrates Payward’s commitment to safeguarding client assets. ### Market Impact and Competitive Landscape If successful, Payward’s on‑chain perpetual futures could reshape the competitive dynamics of U.S.

crypto derivatives. Currently, the market is dominated by a handful of centralized platforms such as CME Group, Binance US, and Bybit, each offering futures contracts that settle off‑chain. By delivering a product that settles on a public ledger while adhering to U.S. regulatory standards, Payward may attract traders who are skeptical of custodial risk yet unwilling to forgo the protections afforded by a regulated exchange.

Moreover, the integration of Hyperliquid’s technology could set a new benchmark for latency and execution quality in the U.S. market. Traders who have previously migrated to overseas exchanges for better performance may find a domestic alternative that meets both speed and compliance criteria, potentially reducing the outflow of capital to foreign platforms.

### Future Roadmap and Expansion Plans Payward’s roadmap does not stop at perpetual futures. The company envisions expanding its on‑chain offerings to include options, swaps, and perhaps tokenized versions of traditional financial instruments.

Leveraging Bitnomial’s existing product suite, Payward can gradually introduce a broader range of derivatives while maintaining a consistent regulatory posture. In addition, Payward is exploring partnerships with institutional liquidity providers and market makers to deepen order book depth and ensure tight spreads for retail participants. By fostering a vibrant ecosystem around Hyperliquid, Payward hopes to attract developers who can build auxiliary services—such as analytics dashboards, algorithmic trading bots, and educational resources—further enriching the user experience.

### Conclusion Payward’s plan to roll out on‑chain perpetual futures for U.S. clients represents a strategic convergence of regulatory compliance, cutting‑edge blockchain technology, and market demand for sophisticated crypto derivatives. By capitalizing on its $550 million acquisition of Bitnomial and the performance‑driven Hyperliquid protocol, the company is positioning itself to become the first registered U.S.

exchange to deliver a fully on‑chain futures product. If executed effectively, this initiative could provide traders with faster, more transparent, and more secure access to leveraged crypto exposure, while setting a new standard for how regulated entities can harness decentralized infrastructure in a compliant manner.