Payward, the corporate entity behind the well‑known cryptocurrency brokerage platform Kraken, has announced an ambitious roadmap that could reshape the landscape of derivatives trading for American investors. The firm’s strategic plan centers on the introduction of on‑chain perpetual futures contracts that will be executed on Hyperliquid, a cutting‑edge decentralized trading protocol known for its low‑latency order execution and transparent settlement mechanisms.

By leveraging the substantial financial and technological resources acquired through its recent $550 million acquisition of Bitnomial, Payward aims to become the first U.S.‑registered exchange to bring Hyperliquid’s innovative market infrastructure to a regulated, retail‑friendly environment. ### Background: The Bitnomial Acquisition In early 2024, Payward completed the purchase of Bitnomial, a U.S.‑based derivatives exchange that had built a reputation for offering a wide array of futures and options products across multiple asset classes. The $550 million transaction was more than a simple expansion of Payward’s product suite; it represented a strategic entry point into the highly regulated U.S. derivatives market.

Bitnomial’s existing licenses, compliance framework, and seasoned engineering team provide Payward with a ready‑made foundation for launching new products that meet the stringent requirements of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). ### Why Hyperliquid? Hyperliquid is a layer‑1‑agnostic protocol that enables the creation of perpetual futures contracts that settle directly on the blockchain.

Unlike traditional centralized futures platforms, Hyperliquid’s design eliminates the need for a trusted intermediary to manage margin, liquidations, and funding rates. All of these processes are encoded in smart contracts, offering unparalleled transparency and reducing counterparty risk. Moreover, Hyperliquid’s architecture is optimized for high‑frequency trading, delivering sub‑second order latency and the ability to handle massive order‑book depth without sacrificing security.

For Payward, the appeal of Hyperliquid lies in its ability to combine the best of both worlds: the trust and regulatory oversight that U.S. investors demand, paired with the efficiency, speed, and openness of decentralized finance (DeFi).

By integrating Hyperliquid’s protocol into a regulated exchange, Payward can offer perpetual futures that settle on‑chain while still providing the familiar user experience, fiat on‑ramps, and customer support that its existing user base expects. ### Regulatory Pathway and Compliance Launching a DeFi‑powered product within a U.S.

regulatory framework is no small feat. Payward’s plan involves a multi‑pronged compliance strategy that leverages Bitnomial’s existing licenses and the firm’s own robust AML/KYC infrastructure.

The company will file the necessary notices with the CFTC, including a request for exemption from certain reporting requirements that are typically applied to centralized futures markets, arguing that the on‑chain settlement model inherently reduces systemic risk. Additionally, Payward will work closely with state regulators to ensure that its margin and collateral requirements meet local standards, and it will implement real‑time surveillance tools to monitor market manipulation and insider trading. A key component of the compliance architecture will be a hybrid custody solution.

While the underlying contracts settle on the blockchain, Payward will retain custodial control of customer funds in a segregated account, providing an additional layer of protection against smart‑contract vulnerabilities. This approach satisfies regulators who are wary of fully non‑custodial models while still preserving the core benefits of on‑chain settlement. ### Product Features and User Experience The on‑chain perpetual futures that Payward intends to launch will cover a broad spectrum of crypto assets, including Bitcoin, Ethereum, and a curated selection of high‑liquidity altcoins. Each contract will feature: - **Continuous Funding Payments:** Unlike traditional futures that have discrete settlement dates, these contracts will employ a funding rate mechanism that aligns the contract price with the underlying spot market, ensuring price parity over time.

- **Dynamic Margin Requirements:** Leveraging Hyperliquid’s risk engine, margin levels will adjust in real time based on market volatility, reducing the likelihood of forced liquidations. - **Transparent Order Book:** All bids and asks will be visible on the blockchain, allowing traders to verify market depth and price discovery without relying on a proprietary feed.

- **Instant Settlement:** Upon closing a position, profits and losses will be settled instantly on the chain, eliminating the settlement lag that can affect traditional futures. From a user‑interface perspective, Payward plans to embed these features within its existing Kraken platform, offering a seamless transition for current customers. Traders will be able to fund their accounts using fiat currencies, stablecoins, or crypto assets, and they will receive real‑time notifications about funding payments, margin calls, and liquidation risks.

Educational resources, including webinars and detailed guides, will be rolled out to help users understand the nuances of on‑chain perpetual contracts. ### Market Impact and Competitive Landscape If successful, Payward’s move could set a precedent for other U.S.

exchanges seeking to integrate DeFi technology into a regulated framework. The ability to offer on‑chain perpetual futures would differentiate Payward from legacy players such as CME Group and Bakkt, which currently operate purely centralized futures products.

Moreover, the transparency and reduced counterparty risk associated with Hyperliquid could attract institutional investors who have been hesitant to engage with traditional crypto derivatives due to concerns over custody and settlement. Competitors are likely to respond with their own hybrid solutions, but Payward’s early‑mover advantage—bolstered by the Bitnomial acquisition and its deep regulatory expertise—positions it favorably to capture market share. Analysts predict that the U.S. crypto derivatives market, which already exceeds $10 billion in daily volume, could see a significant portion of that flow migrate to on‑chain products if they deliver the promised combination of speed, security, and regulatory compliance.

### Timeline and Future Outlook Payward has outlined a phased rollout plan. In the first quarter of 2025, the firm will conduct a closed‑beta test with a select group of institutional and high‑net‑worth retail clients. This phase will focus on stress‑testing the smart‑contract infrastructure, fine‑tuning margin algorithms, and ensuring that all compliance checks function as intended. Following a successful beta, a public launch is slated for the second half of 2025, accompanied by a marketing campaign that highlights the benefits of on‑chain settlement and the safety net provided by Payward’s custodial safeguards.

Beyond the initial launch, Payward envisions expanding the Hyperliquid offering to include options contracts, multi‑asset spreads, and even cross‑chain perpetuals that settle on alternative layer‑2 solutions. The company’s long‑term vision is to create a unified derivatives ecosystem where traders can move fluidly between centralized and decentralized venues without sacrificing regulatory protection or operational efficiency. In summary, Payward’s strategy to introduce on‑chain perpetual futures for U.S.

clients via the Hyperliquid protocol represents a bold convergence of traditional finance regulation and decentralized technology. By capitalizing on the $550 million Bitnomial acquisition, the firm is poised to become a pioneer in the regulated DeFi space, offering traders a transparent, fast, and secure way to engage with crypto derivatives while staying fully compliant with U.S.

law.