New perpetual derivatives protocol launching on Hyperliquid with novel mechanic where losing trades mint shares of the exchange's pool.
DeFi & Yields ·
A new perpetual derivatives protocol named Backtrade is launching on Hyperliquid with a mechanism that mints exchange pool shares when traders close positions at a loss or face liquidation. The protocol allows BTC and ETH perpetuals trading at up to 1000x leverage against a house liquidity pool funded only by trader losses, with orders filled at Hyperliquid's mid price and no spreads, funding payments, or opening fees.
When a trader closes at a loss or is liquidated, the protocol mints BACK tokens to that trader—initially at 100 BACK per dollar lost until the LP reaches $500,000 USDC, then at a declining rate. Staked BACK tokens earn USDC distributions from 50% of trading fees (applied to wins, losses, and liquidations at 2% each) plus any LP balance exceeding $500,000, with no lock-up period required. The token supply begins at zero with no pre-mint, growing only through trader losses, and is non-transferable at launch.
The protocol is in waitlist stage. Key uncertainties remain, including whether the payout queue—which may require waiting if the LP is insufficient to cover winning trades—will create practical friction, whether BACK will retain meaningful value given it is earned only through losses and distributed only via staking, and how liquidations at high leverage will interact with the minting mechanism in volatile markets.