A sharp fall in a stock can now trigger the liquidation of a Bitcoin trade, as decentralised finance platforms increasingly allow traders to use equities and other assets as collateral.
Monthly trading in real-world-asset perpetual futures rose from $85bn in January to a record $799.5bn in August, according to CoinMarketCap. Stocks represented 62.3% of August’s activity across decentralised and centralised venues, making equities the dominant category.
The growth has prompted platforms to move beyond single-asset margin accounts. Under unified portfolio margin, a trader’s entire balance can support every position, rather than relying on one stablecoin deposit.
Hyperliquid allows spot balances and perpetual positions to offset one another, with HYPE and BTC accepted as non-stablecoin collateral. On 3 September, Backpack added equity holdings to its unified account, allowing SPCX shares to support perpetual trades, dollar borrowing and spot-margin positions.
Synthetix has also built a liquidity vault to manage ETH-denominated collateral, market-making and liquidations. Katana chief executive Matthew Fisher said unified margin increased leverage but allowed sophisticated firms to offset risk across a complete trading book, supporting both hedging and larger directional positions.
Two prices can trigger the same liquidation
A Bitcoin long backed by a stablecoin is mainly exposed to movements in BTC. If another asset is used as collateral, the position acquires a second risk variable.
A fall in Bitcoin can reduce the value of the trade. But if the collateral falls while Bitcoin remains unchanged, the margin ratio can deteriorate independently. A trader could therefore be liquidated even while the underlying derivative remains profitable.
Yield-bearing collateral creates an additional challenge. Yield accumulates gradually, while prices change from one tick to the next, forcing the margin system to account for both when assessing liquidation risk.
Fisher said: “The challenge is basically liquidating the new collateral safely.”
Knowing the value of tokenised gold, staked ETH or an equity position is only part of the process. Once a forced sale begins, the asset must be converted into a stable settlement asset quickly and without substantial slippage.
Hyperliquid routes portfolio-margin liquidations through a dedicated backstop liquidator. Seized collateral is converted using a time-weighted average price with a 10-minute half-life because spot order books are considered less consistently liquid than perpetual markets. Synthetix’s vault combines the roles of market maker, liquidator and collateral converter for each non-stablecoin asset it accepts.
A real test came in August, when Galaxy reported that a Seoul pre-market price for SK Hynix was 29.96% below the previous close. The price fed into a tokenised perpetual contract on Hyperliquid that was margined in USDC, triggering roughly $60m of leveraged long liquidations across nearly 1,000 accounts.
The episode showed that accurate price discovery does not necessarily mean liquidation systems are robust.
Fisher expects DeFi eventually to adopt a collateral hierarchy similar to traditional finance: cash, government debt, high-quality credit, other debt, equities, and then more volatile or illiquid assets. Banks and prime brokers have accepted securities, gold and money-market fund shares for decades using haircuts and stress tests.
Tokenisation makes those assets transferable through standards such as ERC-20, but does not determine how they behave during forced selling. Volatility and the ability to sell quickly remain decisive.
Nasdaq has agreed to invest $100m in Payward, the parent company of Kraken, to help develop infrastructure for tokenised-asset trading outside conventional market hours. US market infrastructure is also moving towards round-the-clock clearing and settlement.
The expansion could turn decentralised exchanges into on-chain prime brokers, combining spot holdings, perpetuals, lending and collateral management. But the risks increase if crowded trades reverse and several collateral assets fall together.
DEXs accounted for roughly 45% of real-world-asset perpetual trading in December, but only 13% in August. Hyperliquid’s HIP-3 markets represented most of the remaining DeFi share, with nearly all that volume coming from a single deployer.
In a severe reversal, platforms may reduce loan-to-value ratios, lower collateral caps and return to stablecoin-first margin. Bitcoin could still absorb the shock because forced sales of less liquid assets often settle through crypto’s deepest derivatives market.
The central question is whether DeFi can sell a tokenised asset quickly enough, and at sufficient scale, when liquidation becomes unavoidable.
