Who is using Trade.xyz to trade?

Author: @web3_pastel, Arrakis Finance; Translator: Jaleel Jia Liu, BlockBeats

On the Hyperliquid map, one of the most unavoidable names in 2026 is Trade.xyz. It was the first truly viable product after the launch of HIP-3, the "permissionless perpetual market deployment framework," moving assets like US stocks, crude oil, and silver—which originally belonged only to traditional financial markets—to a 24/7 on-chain order book.
In just a few months, it grew from a niche experiment with only the XYZ100 index into an on-chain trading venue supporting multiple markets including oil, Tesla, and silver, with a monthly trading volume exceeding $50 billion.
However, at the same time, it has also attracted considerable discussion on the internet: how many of those impressive wallet numbers are genuine, and how many are simply hype created by unissued tokens?

Arrakis's research yielded a rather interesting result: the "sorceress layer" does exist, with over 30,000 wallets traceable to the same Polymarket account, "Themino"; however, it's driven by sheer numbers, not US dollars. The real drivers of trading volume are a few professional market makers, a few order-taking bots originating from Bybit, and a long tail of retail investors that highly overlaps with Polymarket. The following is the full text:

Abstract

When we wrote our first article, "Who Trades on HIP-3?", our attribution method was statistical. We categorized each wallet based on its trading behavior over the past three months: addresses primarily placing orders were categorized as market makers, addresses with high-frequency order taking were categorized as arbitrageurs, and orders with low execution rates and the "builder" tag were categorized as retail investors. This approach does reveal some interesting market structure characteristics, but the classification is probabilistic, and approximately 70% of wallets remain uncategorized.

This article replaces statistical inference with mechanical classification. Each order on @HyperliquidX carries a set of deterministic tags signed and issued by the exchange itself: validity period (ALO, GTC, IOC, FrontendMarket), builder code, execution flag, and holding time. We use this order metadata to categorize each wallet into one of four types: retail investor, market maker, arbitrage bot, and arbitrage wallet account. The second step is to identify the wallets behind these categories, extracting identity and transaction behavior data from the APIs of @arkham and HyperTracker. The top 450 wallets account for 78% of the total trading volume. Within this group of wallets, we identified several accounts associated with @Polymarket, @jump_, @SeliniCapital, @wintermute_t, Abraxas Capital, etc.

Through this two-step classification method, we observed several patterns. These will be elaborated upon below.

Trade.xyz Wallet Analysis

Our observation window is from March 10, 2026 to March 31, 2026, a total of 21 days. During this period, @tradexyz's four markets (xyz:CL Crude Oil, xyz:SILVER Silver, xyz:TSLA Tesla, xyz:XYZ100) recorded a total of 79,622 unique participating wallets, with a total trading volume of $51.95 billion.

79,622 participating wallets broken down by transaction volume. Market makers, although accounting for less than 0.5% of the total number of wallets, handle 63% of every dollar transaction

Categorized by number of wallets (not transaction volume).

Classified by number of wallets (not transaction volume).

Wallets are distributed by market. xyz:CL absorbed 99.3% of airdrop-farming accounts because of its optimal execution cost

Of the 35,091 airdrop-farming account wallets, 34,859 (99.3%) traded xyz:CL during this window, while the remaining 232 were scattered across xyz:SILVER, xyz:TSLA, and xyz:XYZ100. This pattern is consistent with the characteristics of airdrop-farming accounts: each wallet repeatedly conducts small-amount two-way transactions, generating trading volume but not bearing price risk. This strategy relies on tight execution costs and is extremely sensitive to slippage.

xyz:CL has the best depth among Trade.xyz's four markets, naturally making it the preferred venue for this type of activity. Another noteworthy phenomenon is who is behind these addresses. On-chain tracking, as shown below, reveals that 34,553 profit-taking wallets are associated with the same Polymarket operator. This single entity accounts for 43.4% of all participating wallets on Trade.xyz during this window. At the other end of the spectrum is market making. 363 wallets, representing 0.46% of all active addresses, drove $32.75 billion in trading volume during the window, accounting for 63% of every dollar traded on Trade.xyz. The remaining three categories fall in between. 522 SAT/HFT bots contributed $3.5 billion (6.7%). 38,307 wallets classified as retail investors contributed $8.7 billion (16.7%). 5,339 uncategorized wallets contributed $6.61 billion (12.7%). The 12.7% of trading volume in the uncategorized category cannot be qualitatively categorized into any particular strategy based solely on metadata. A reasonable assumption is that a significant portion of this came from retail investors placing limit orders through the Hyperliquid frontend, or market and limit orders through the Trade.xyz frontend. Neither of these channels attaches explicit builder codes or dedicated TIF tags to orders, making these trades invisible under a metadata-driven categorization method. [Image of effective time distribution by order count for each category] Unsurprisingly, 98.5% of market makers' orders were ALO, while arbitrage bots used 100% IOC orders. In the uncategorized category, 71.5% were GTC, a hallmark of manually placed limit orders by front-end users. TIF composition supports this hypothesis: 71.5% of orders in the uncategorized category have a GTC (Good Till Cancel) validity period tag, typically used by front-end users when placing static limit orders. "Themino" has implicated over 30,000 wallets. Over the past few weeks, there has been considerable discussion in the market: Is Trade.xyz's impressive user count truly due to real human participation, or was it inflated by airdropped accounts before the anticipated TGE? We do not intend to comment on the broader pattern of airdrop exploitation on this exchange, but an interesting pattern does emerge after analyzing transaction data from four Trade.xyz markets in March. Analyst Jascha points out that 92.5% of XYZ addresses have never made a single transaction on any other HIP-3 deployer. Of the 34,602 wallets classified as airdrop exploitation accounts, 34,553, or 99.9%, can be traced back to the same Polymarket entity named "Themino".

"Themino," a Polymarket identity located on Arbitrum, has spawned 70 independent linear chains, covering 34,553 wallets

How exactly does it work? Hyperliquid's L1 provides a primitive called internalTransfer, which can transfer USDC between wallets, charging a fixed fee of $1 regardless of the amount. Themino's operators used this primitive to sequentially transfer a seed deposit through tens of thousands of new wallets.

Each wallet will execute the same five-step process in approximately 26 seconds: 1. Receive $X from the previous profit-generating wallet via internalTransfer, with a $1 fee deducted en route by HL. 2. Transfer $14 to the xyz sub-account. 3. Execute two IOC orders on xyz:CL, one buy and one sell, generating two trades and increasing trading volume. 4. Transfer approximately $13.99 back to the main account (the $0.01 difference is reserved for slippage and transaction fees). 5. Transfer $X minus $1 to the next profit-generating wallet via internalTransfer. The next wallet would repeat the same actions. The entire operation involved 34,510 internal transfers, resulting in a total loss of $34,510 in protocol fees for Themino. This strategy is consistent with his trading history on Polymarket. Themino also bet "no" on Polymarket on "Will the US launch an attack on Iran before February 28, 2026?", losing approximately $80,000. The attack occurred on February 28.

What types of Builders are there?

Hyperliquid assigns an identifier to orders routed through third-party front-ends so that these applications can charge custom front-end fees. This identifier is the builder code, and it's the most direct basis for determining which interface a wallet is using (if it is). Among the wallets traded on the four markets, these builders can be roughly classified into three types.

Algorithmic Builders. This type is for retail investors to maximize trading volume on DEXs and farm points for potential airdrops.

Algorithmic Builders.

Before the end of 2025, manipulating scores on perpetual DEXs meant either order liquidation or using algorithms to run non-targeted order-placing operations, which was costly for participants and net negative for exchanges. Retail market-making bots like @tread_fi, @PlanemoTrading, and @origamitech_ have replaced order liquidation with truly valuable market making. Every order these products place is post-only, so wallets are adding liquidity to the order book, not consuming it. As @davidyjeong, CEO of @tread_fi, stated, "Before the advent of retail market-making solutions, manipulating scores on perpetual DEXs meant order washing, artificially inflating trading volume at the expense of execution fees, slippage, and the risk of account suspension. We solved this problem with a completely new score-manipulation solution: the bot only places maker orders on both sides. Users can manipulate scores at a lower cost and often profit from the captured spreads. A byproduct is that the market gains genuine top-market liquidity, which is exactly what HIP-3 perpetual stocks desperately need during nighttime and weekends when traditional market makers are unwilling to do market-making. This is a better way to manipulate scores and is the reason why the HIP-3 market has such an excellent execution experience today." The contribution of these market-making bots to the market is most evident during periods when traditional market makers are absent. CME WTI futures close on Friday afternoon and open on Sunday evening, and perpetual stocks also face the same "nighttime and weekend" gap. During these periods, retail market-making bots propped up the top of the order book in markets like xyz:CL and xyz:TSLA. It should be noted that in this analysis, we categorize wallets routed through these algorithms as "airdrop farming accounts," but their trading behavior and market impact are structurally completely different from the Sybil activities. Wallet-embedded Builders are perpetual contract interfaces embedded within consumer wallets. Since the beginning of 2026, this type of integration has become one of the largest sources of retail order flow on HIP-3. This group includes @phantom, @MetaMask, @Rabby_io, @rainbowdotme, and @OneKeyHQ. The median trading volume per wallet is between $1,000 and $3,000, which aligns with the order size of a retail investor group that prioritizes ease of use over marginal builder fees. Application-based Builders, on the other hand, are standalone perpetual front-ends and integrated products: products for traders that provide dedicated workflows, serving users who find wallet plugins insufficient and require better order placement, charting, position management, and execution tools. This group has fewer wallets than embedded wallets, but higher trading volume per wallet, aligning with a more advanced user group that prioritizes feature depth over plug-and-play functionality. These products include @InsilicoTrading terminal, @liquidtrading, @hypurrdash, @BasedOneX, @Dreamcash, @infinex, @pear_protocol, @defiapp, and @pvp_dot_trade. @0xVKTR (the team behind the Insilico endpoint), Head of Growth at InsilicoTrading, describes it this way: "At Insilico, we see the HIP-3 market as the next step in bringing real-world exposure native to the crypto track. Traders don't just want another front-end. They want fast execution, clean market access, and the ability to seamlessly switch between crypto and macro assets without leaving their existing workflows. Trade.xyz is one of the clearest examples of this need. Order flows routed through Insilico prove that on-chain perpetuity has a real high-level user base when the trading floor has depth, useful products, and a trading experience built for serious participants." [Image 1] [Image 2] [Image 3] [Image 4] [Image 5] [Image 6] [Image 7] [Image 8] [Image 9] [Image 10] [Image 11] [Image 12] [Image 13] [Image 14] [Image 15] [Image 16] [Image 17] [Image 18] [Image 19] [Image 20] [Image 12] [Image 13] [Image 14] [Image 15] [Image 16] [Image 17] [Image 18] [Image 19] [Image 12] [Image 19] [Image 10] [Image 11] [Image 12] [Image 13] [Image 14] [Image 15] [Image 16] [Image 17] [Image 18] [Image 19] [Image 12 ...9] [Image 12] [Image 13] [Image 14] [Image 15] [Image 16] [Image 17] [Image 18] [Image 19] [Image 12] [Image 19] [Image 12] [Image 19] [Image 1

Cumulative share of market making volume by wallet ranking. The top 5 market makers account for 50% of all market making flow, the top 13 account for 80%, and the top 21 account for 90%.

The second largest market maker is the most interesting wallet in the entire sample. 0xc926ddba…98d3 has a trading volume of $4.39 billion and a turnover rate of 0.52%, a textbook example of a maker profile. Arkham has labeled this address as "Powell" on Polymarket.

SAT is the counterparty to the market maker ledger. These wallets run 90%+ IOC (Immediate or Cancel) order combinations, purely aggressive takers, specifically targeting quotes placed by market makers.

Top SAT/HFT bots ranked by transaction volume. The top 4 wallets account for 89% of the SAT ledger, with funds concentrated in Bybit

Of the $3.5 billion in the SAT ledger, the top 4 SATs account for $3.1 billion, a concentration of 89%. Two of them run 100% IOC, meaning that every order they place is "executed or cancelled immediately," with absolutely no maker intent.

Funding source clustering points to @Bybit_Official as the main SAT profile.

The majority of trading volume in the top SATs can be traced back to Bybit-funded wallets, which aligns with the profile of a single bot-operating entity or a small circle of bot operators. Three of these SATs have Polymarket accounts: loracles (trading volume $15.5 million, HL cumulative profit/loss +$25.7 million), Conduit ($5.3 million), and Chadwick Longman ($3.7 million). Polymarket appears here for the same reason it dominates the retail investor section below; prediction market groups are the most common cross-platform identity on Trade.xyz. The SAT's liquidation rate during the window was 8.1%, about half that of market makers and retail investors. This group represents the most risk-managed group on the ledger, externally hedging their positions and rarely triggering margin calls.

The retail investor group highly overlaps with Polymarket

We conducted an in-depth analysis of the 400 retail wallets with the highest trading volume, which route orders through the Hyperliquid UI and the wallet's embedded front-end. Algorithmic products mentioned earlier (Tread.fi, Planemo Trading, and the broader group of algorithm builders) were excluded.

The 400 retail wallets with the highest trading volume are categorized by attribution.

The 400 retail wallets with the highest trading volume are categorized by attribution.

Polymarket verified wallets dominate the identified portion, contributing $1.63 billion in transaction volume to this group. Polymarket: Polymarket accounts identifiable through the Arkham on-chain tagging system. @ensdomains/Social Identity: Accounts with ENS names or other social graph identifiers, but not traceable to Polymarket. CEX Deposits: Anonymous wallets whose funds originate from centralized exchanges. Bridge Deposits: Anonymous wallets that deposit funds via cross-chain bridges. Others: Self-custodied EOAs, contract infrastructure, and empty address activity. The most prominent is Polymarket's share. Of the 400 top retail wallets, 94, or 22%, of the top retail trading volume ($1.63 billion) comes from verifiable Polymarket users. This is the largest single identifiable group within the retail segment. Adding together Polymarket-affiliated market makers ($Powell, $4.39 billion) and three Polymarket-affiliated SATs ($24 million), Polymarket's total footprint on Trade.xyz is approximately $6 billion. [Image of Polymarket wallets among the top 15 retail wallets by trading volume] This overlap is reasonable. Polymarket and Trade.xyz offer crypto-native users exposure to real-world outcomes through two different market structures: prediction markets and perpetual futures. Wallet-level data shows that the same group of people are operating back and forth between the two ledgers from the same EVM address. ENS holders also contributed 26 retail wallets, totaling approximately $400 million. Notable wallets include caydenb.eth ($33 million), eggnoodle.eth ($33 million), ethmerg.eth ($19 million), baitf1sh.eth ($16 million), and wanyekest69.eth ($6.8 million, with accumulated profits and losses of +$17.6 million). Unidentified wallets split by funding source: CEX deposit retail wallets split by source exchange. Kraken leads the unidentified CEX deposit group by a wide margin. Bridging deposit retail wallets split by source bridging. Hyperunit and deBridge dominate the bridging deposit group, while Stargate and the long tail make up the remainder. @krakenfx dominates the CEX deposit group. Hyperunit and @debridge dominate the bridging deposit group, while @StargateFinance and a long list of other bridging platforms make up the remainder. In other words, the retail investors who truly drive Trade.xyz's order book are actually three types of people: Polymarket cross-venue traders, independent traders depositing through Kraken, and DeFi natives entering through Hyperunit or deBridge. Combining market makers, SATs, and retail investors gives us a compact profile of Trade.xyz's core participants, stripping away the witch layer discussed below.

The core participants after stripping away the witch layer. A few professional market makers quote prices for a few bot teams, plus a long tail of Polymarket veterans and CEX deposited independent traders placing targeted bets through the Hyperliquid UI. This is the combined view of the Trade.xyz ledger.

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Summary

Recent discussions surrounding Trade.xyz have focused on one question: Is the participation genuine, or is this exchange actually dominated by "sorceresses" (players who exploit the anticipated TGE)? Our analysis provides a layered answer.

Like any DeFi market before TGE, Trade.xyz does indeed have a "sorceress layer," a typical example being an operator using a "relay race" style of manipulation to run tens of thousands of wallets. However, the so-called "sorceress layer" inflates the number of wallets, not the USD trading volume.

We found no evidence of an independent, high-volume wash trading operation designed to artificially inflate USD trading volume. The seemingly manipulated data is mostly run by retail market-making bots: wallets place orders on both sides, adding depth to the top of the order book, rather than consuming it.

The real trading volume comes from identifiable ledgers. A significant portion of top retail wallets bear Polymarket accounts, ENS records, or social graph identifiers, while the largest crypto liquidity providers (Jump Crypto, Selini Capital, Wintermute) also leave clear traces, alongside the targeted fund Abraxas Capital. The high overlap between the retail community and Polymarket is unusual, given that the latter is a product built around the same speculative preferences. The inflated number of wallets was foreseeable before TGE, but this doesn't extend to USD trading volume or the identifiable groups carrying that volume. Special thanks to HyperTracker and numerous contributors for their help with data availability. For the complete methodology, please visit our blog.