Hyperliquid Policy Center and tradeXYZ have urged the CFTC to approve regulated energy perpetual contracts for United States markets. According to the Hyperliquid Policy Center, these products could help businesses manage energy risks beyond conventional trading hours.

The groups submitted a comment supporting perpetual contracts linked to crude oil, natural gas, and storable energy commodities. TradeXYZ operates Hyperliquid markets tracking WTI, Brent crude, and Henry Hub natural gas, with cumulative volume exceeding $500 billion.

Supporters argue that weekend trading provides price discovery when conventional energy exchanges remain closed during geopolitical or supply disruptions. During the Middle East conflict, offshore participants used oil-linked perpetuals to adjust exposure before regulated futures markets reopened.

Approximately two-thirds of the weekend price movement occurred onchain before benchmark trading resumed, the policy center reported. However, American participants lacked a regulated domestic venue for responding to those energy price changes throughout the closure.

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Perpetual Contracts Could Expand Energy Hedging Without Replacing Futures

Perpetual contracts have no expiration date, allowing users to maintain exposure without repeatedly transferring positions between different contract months. Consequently, hedgers could avoid rollover costs while reducing the risk of mistiming transitions between expiring futures contracts.

Trading activity remains within one order book, potentially supporting stronger liquidity, narrower spreads, and easier access for smaller businesses. Nevertheless, the groups present perpetual contracts as complementary tools rather than replacements for dated or physically settled futures.

Funding payments encourage traders to correct price differences, while nearly 75% of sampled weekend prices better anticipated Sunday reopenings. Onchain systems process margin, clearing, liquidation, and transaction records throughout weekends without relying entirely on banking hours.

Proposed Safeguards Could Shape the CFTC’s Energy Perpetual Framework

The proposal recommends leverage limits, funding disclosures, transparent liquidation rules, and safeguards tailored to individual energy commodities. It also asks regulators to recognize stablecoins and tokenized traditional assets as eligible collateral for cleared derivatives.

Furthermore, the groups want regulators to permit blockchain infrastructure for execution, margining, clearing, settlement, and recordkeeping. However, energy products require separate examination because physical markets, weekend liquidity, and pricing structures present different risks. A favorable decision would create a regulated pathway for uninterrupted energy hedging alongside established dated futures markets.

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