Payward, the corporate entity behind the popular cryptocurrency brokerage platform Kraken, has announced an ambitious plan to introduce on‑chain perpetual futures to its U.S. client base by leveraging the Hyperliquid protocol.
This initiative is anchored in the firm’s recent $550 million purchase of Bitnomial, a specialized derivatives exchange that brings both technology and regulatory expertise to the table. By integrating Bitnomian’s infrastructure with Hyperliquid’s high‑throughput, low‑latency blockchain design, Payward hopes to become the first U.S.‑registered exchange to offer truly decentralized perpetual futures contracts that settle directly on the blockchain. The strategic rationale behind the move is multifaceted.
First, the cryptocurrency market has seen a surge in demand for perpetual futures—contracts that allow traders to maintain exposure to an asset without an expiration date—because they provide continuous leverage and the ability to hedge positions in real time. Traditional centralized exchanges have historically dominated this space, but they are increasingly scrutinized by regulators for issues such as market manipulation, custody risk, and opaque pricing. By shifting to an on‑chain model, Payward aims to address many of these concerns.
Transactions are recorded immutably on a public ledger, price feeds are sourced from decentralized oracles, and settlement occurs automatically via smart contracts, reducing reliance on a single custodial entity. Hyperliquid, the underlying protocol chosen for this rollout, is engineered for high‑frequency trading on a public blockchain.
It employs a novel order‑matching engine that can process thousands of orders per second while maintaining sub‑second finality. This performance is crucial for perpetual futures, where price volatility can be extreme and traders expect near‑instant execution.
Moreover, Hyperliquid’s architecture supports cross‑margining, allowing users to allocate collateral across multiple contracts, thereby improving capital efficiency. The protocol also incorporates a built‑in funding rate mechanism that aligns the perpetual price with the underlying spot market, ensuring that contracts remain tethered to real‑world asset values.
Payward’s acquisition of Bitnomial brings essential regulatory compliance capabilities to the project. Bitnomial holds a suite of licenses in multiple jurisdictions, including a U.S. futures brokerage registration with the Commodity Futures Trading Commission (CFTC) and a New York State Department of Financial Services (NYDFS) trust charter.
These credentials enable Payward to operate within the strict framework that governs derivatives trading in the United States, including rigorous reporting, anti‑money‑laundering (AML) controls, and customer protection standards. By merging Bitnomial’s compliance framework with Hyperliquid’s decentralized execution layer, Payward intends to create a hybrid model that satisfies both regulatory demands and the decentralization ethos prized by crypto enthusiasts.
The rollout plan is expected to unfold in several phases. In the initial stage, Payward will launch a limited set of perpetual futures contracts on major crypto assets such as Bitcoin (BTC) and Ethereum (ETH). These contracts will be offered to qualified U.S. investors who meet the exchange’s Know‑Your‑Customer (KYC) and suitability requirements.
The contracts will feature tiered leverage options, ranging from 2x up to 10x, and will be collateralized using a mix of fiat‑backed stablecoins and major cryptocurrencies. During this pilot, Payward will closely monitor market behavior, liquidity provision, and compliance reporting to fine‑tune the system. Subsequent phases will expand the product suite to include perpetuals on emerging assets, index‑based contracts, and potentially synthetic exposure to traditional financial instruments such as equities or commodities. Payward also plans to integrate liquidity mining incentives to attract market makers who can provide depth and reduce spreads.
These incentives may involve native tokens or a share of the platform’s transaction fees, structured in a way that aligns with U.S. securities regulations. From a technical perspective, the integration will require robust bridging solutions to move assets between Payward’s custodial wallets and the Hyperliquid smart contracts.
Payward is developing a secure, audited bridge that will lock user funds in a multi‑signature vault before minting corresponding wrapped tokens on the Hyperliquid chain. This approach ensures that users retain full ownership of their collateral while enabling the on‑chain execution of trades. Additionally, the platform will employ decentralized oracle networks, such as Chainlink, to feed price data into the contracts, thereby mitigating the risk of price manipulation.
Risk management will be a cornerstone of the offering. Payward intends to implement automated liquidation engines that trigger when a trader’s margin falls below a predefined threshold. These engines will liquidate positions in a transparent, algorithmic manner, distributing the collateral to the market’s liquidity providers.
To further protect users, the exchange will maintain an insurance fund, funded by a portion of trading fees, to cover extreme market events that could otherwise lead to systemic losses. Regulatory engagement remains a priority throughout the development process. Payward has opened a dialogue with the CFTC, the Securities and Exchange Commission (SEC), and state regulators to ensure that the on‑chain perpetual futures comply with existing derivatives laws and any forthcoming guidance on digital asset markets. The company has also pledged to publish regular transparency reports detailing trade volumes, order book depth, and the composition of its insurance fund.
In summary, Payward’s initiative to bring on‑chain perpetual futures to U.S. customers represents a significant convergence of decentralized technology and traditional financial regulation.
By leveraging the $550 million Bitnomial acquisition, the firm gains the necessary licensing and compliance infrastructure, while Hyperliquid provides the performance and security required for high‑frequency derivatives trading. If successful, this hybrid model could set a new industry standard, offering traders the speed and flexibility of decentralized finance (DeFi) alongside the safeguards and oversight of a regulated exchange. The venture not only positions Payward at the forefront of crypto innovation in the United States but also signals a broader shift toward integrating blockchain‑native solutions within the regulated financial ecosystem.