Pump.fun has launched perpetual futures trading through Hyperliquid, adding leveraged crypto contracts to its memecoin services. The Solana-based platform offers Bitcoin positions with up to 40x leverage and Ethereum positions with up to 25x, using Hyperliquid’s trading infrastructure.
Users can trade these contracts without owning the underlying cryptocurrencies. Hyperliquid supplies the order books and liquidity, while Pump.fun provides the interface for placing trades.
Unlike other contracts that have expiry dates, perpetual futures do not have any specific date on which the position is settled. This development came after the hints about the two exchanges collaborating.
According to the Pump.fun API released on October 9. The funding rates, open interest, and trading volume came from Hyperliquid’s HyperCore mainnet.
How Does Hyperliquid Handle the Trading?
Perpetual futures leverage existing order books in Hyperliquid. For Pump.fun, there is no need to run a special market or to create a derivatives pool of liquidity on its own.
Also Read: Circle Reports $1.4B H1 Revenue as USDC Costs Reach 59%
HyperCore executes orders, manages margin balances, and performs calculations of funding fees. It is responsible for the liquidation of traders unable to maintain margin levels.
For Pump.fun, the role of the entry point is reserved for eligible traders. The split keeps execution on Hyperliquid and doesn’t transfer it to Pump.fun.
The connection between the two platforms was already established before the release of perpetual futures. In August, Pump.fun launched HyperEVM support, which allowed USDC payments for spot trades via smart contracts of Hyperliquid.
Hyperliquid was processing significant volume of derivatives trading. As of the end of August, daily volume of perpetual futures trading on it was $12.43 billion.
Open interest shows active contracts, and trading volume represents completed trades. The funding rate is responsible for the fee payments associated with open positions.
Why Is Pump.fun Moving Beyond Memecoins?
Pump.fun had been making their money by listing and trading memecoins via the Solana platform. The addition of the perpetual futures makes up for a separate product to the spot market services already provided by the company.
It also links two companies whose main business operations are different. While Pump.fun deals with token listings and trading, Hyperliquid operates the derivatives market.
Their revenues were similar at the end of September. Pump.fun made $15.16 million per week of protocol revenue compared to Hyperliquid, which made $15.06 million.
These numbers show the one-week performance of the companies rather than their overall revenue growth. It provides one more source of fees for Pump.fun, but the revenue from their derivatives is not yet known.
For Hyperliquid, the integration means that the company now provides another interface through which users could access their order books. The fees from derivatives trading have helped to buy HYPE tokens via the Assistance Fund.
Hyperliquid has been working separately on bringing commodity futures to the regulated US markets. It is a different thing from crypto perpetual futures now available via Pump.fun.
What Are the Risks and Trading Limits?
Perpetual futures allow traders to make leveraged bets without having to buy BTC or ETH. Leveraging can multiply losses and gains; in case of rapid price changes, the amount of collateral backing the position is rapidly diminished.
In case of forced liquidations, all the trader’s deposited collateral will be taken. Also, funding rates influence the cost of maintaining a position opened by the trader regardless of the market.
price fluctuations.
The pump.fun team blocks access to perpetual futures from US citizens, people in Ontario, and other prohibited jurisdictions. These location restrictions aren’t removed by Pump.fun’s trading interface.
This launch of the service occurred amid the price drops of the PUMP token. According to CoinMarketCap data, the token’s price is $0.004432, having dropped 1.5% over the last 24 hours.
Also Read: Standard Chartered Launches Bitcoin, Ethereum Trading for UAE Wealth Clients
Be the first to comment