Who is using Trade.xyz for trading?

Original Title: "Who is actually trading on Trade.xyz?"

Original Author: @web3_pastel, Arrakis Finance

Translation: Jaleel, BlockBeats

Editor's Note:

On the Hyperliquid landscape, one of the most unavoidable names in 2026 is Trade.xyz. It was the first product to truly take off after the launch of HIP-3, the "permissionless perpetual market deployment framework," moving assets like US stocks, crude oil, and silver—traditionally confined to traditional finance trading hours—onto a 7×24 chain-based order book.

In just a few months, it grew from a niche experiment centered around the XYZ100 index into a chain-based trading venue hosting multiple markets including oil, Tesla, and silver, with an average monthly trading volume exceeding $50 billion.

However, at the same time, controversy surrounding it has also sparked considerable discussion online: Among those impressive wallet numbers, how many are real people, and how many are Sybils mass-created in anticipation of an unreleased token?

Arrakis' research yields a rather interesting result: The Sybil layer does exist, with over 30,000 wallets traceable to a single Polymarket account, "Themino." However, what it inflates is headcount, not dollar volume. The true drivers of trading volume are a few professional market-making desks, a group of taker bots originating from Bybit, and a long tail of retail traders that heavily overlaps with Polymarket.

The following is the full text:

Abstract

When we wrote our first piece, "Who is trading on HIP-3?", our attribution method was statistical. We classified wallets based on their trading behavior over the past three months: addresses primarily placing limit orders were categorized as market makers, high-frequency takers as arbitrageurs, and orders with low fill rates and builder tags as retail. This approach did reveal some interesting market structure characteristics, but the classification was probabilistic, and approximately 70% of wallets remained unclassified.

This article replaces statistical inference with mechanistic classification. Every order on @HyperliquidX comes with a set of deterministic tags signed and published by the exchange itself: effective time (ALO, GTC, IOC, FrontendMarket), builder code, fill status, and holding time. We use this order metadata to classify each wallet into one of four categories: Retail, Market Maker, Arbitrage Bot, and Airdrop Hunter.

The second step involves identifying the entities behind these categories, extracting identity and trading behavior data from @arkham and HyperTracker's APIs. The top 450 wallets accounted for 78% of the total trading volume. Among this group, we identified several @Polymarket-associated accounts, @jump_, @SeliniCapital, @wintermute_t, Abraxas Capital, and others.

Through this two-step classification method, we observed several patterns, which are detailed below.

Trade.xyz Wallet Analysis

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

79,622 participating wallets broken down by trading volume. Although market makers represent less than 0.5% of all wallets, they account for 63% of every dollar traded.

Classified by wallet count (not volume). The Airdrop Hunter category alone comprises 35,091 wallets, nearly half of all identified wallets.

The Airdrop Hunter category is one of the largest by wallet count but the smallest by volume share. These 35,091 wallets represent 44.07% of the total wallets, yet generated only $400 million in volume during the entire window, a mere 0.77% of the venue's $51.95 billion total. Nearly half of Trade.xyz's active wallets contributed less than 1% of the total volume.

Breaking it down by market reveals another distinct pattern.

Wallet distribution by market. xyz:CL captured 99.3% of the Airdrop Hunter wallets, primarily due to its optimal execution costs.

Of the 35,091 Airdrop Hunter wallets, 34,859 (99.3%) traded xyz:CL during the window, with the remaining 232 spread across xyz:SILVER, xyz:TSLA, and xyz:XYZ100. This pattern is consistent with Airdrop Hunter behavior: each wallet repeatedly executes small, bi-directional trades to generate volume without taking on price risk. This strategy relies on tight execution costs and is extremely sensitive to slippage. As the deepest market among Trade.xyz's four offerings, xyz:CL naturally became the preferred venue for this activity.

Another notable observation is who is behind these addresses. On-chain tracing, detailed below, shows that 34,553 of the Airdrop Hunter wallets are linked to the same Polymarket operator. This single entity accounts for 43.4% of all participating wallets on Trade.xyz during this window.

On the other end of the spectrum is market making. 363 wallets, representing 0.46% of active addresses, drove $32.75 billion in trading volume during the window, accounting for 63% of every dollar on Trade.xyz. The remaining three categories fall in between. 522 SAT/HFT bots contributed $3.5 billion (6.7%). 38,307 classified as retail wallets contributed $8.7 billion (16.7%). 5,339 unclassified wallets contributed $6.61 billion (12.7%).

Regarding the 12.7% volume in the "Unclassified" category, it cannot be qualitatively assigned to a specific strategy based solely on metadata. A reasonable inference is that a significant portion comes from retail users placing limit orders via the Hyperliquid frontend, or market/limit orders through the Trade.xyz frontend. Neither channel attaches explicit builder codes or specialized TIF tags to orders, making these fills invisible under a metadata-driven classification method.

Time-in-force distribution weighted by order count for each category. Unsurprisingly, 98.5% of market maker orders are ALO, while arbitrage bots use 100% IOC. The unclassified category shows 71.5% GTC, a hallmark of manual limit orders placed by frontend users.

The TIF composition supports this inference: 71.5% of orders in the unclassified category carry a GTC (Good Till Cancel) time-in-force tag, typically used when frontend users place resting limit orders.

"Themino" Reveals Over 30,000 Wallets

In recent weeks, there has been much discussion in the market: Are Trade.xyz's impressive user numbers driven by genuine human participation, or inflated by airdrop hunter activity ahead of the anticipated TGE? We don't intend to comment on the broader airdrop farming landscape for the exchange, but analyzing trade-level data across the four Trade.xyz markets in March does reveal a pattern worth presenting.

Analyst Jascha points out that 92.5% of XYZ addresses have never executed a single trade on any other HIP-3 deployer.

Of the 34,602 wallets classified as Airdrop Hunters, 34,553, or 99.9%, can be traced back to a single Polymarket identity named "Themino."

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

How exactly did it work? Hyperliquid's L1 provides a primitive called internalTransfer, allowing USDC transfers between wallets for a fixed fee of $1 regardless of amount. The operator of Themino used this primitive to pass an initial seed deposit sequentially through tens of thousands of new wallets. Each wallet would execute the same five-step routine in approximately 26 seconds:

1. Receive $X from the previous airdrop wallet via internalTransfer, losing $1 to the HL transfer fee.

2. Transfer $14 to the xyz sub-account.

3. Execute two IOC orders on xyz:CL (one buy, one sell), generating two fills and some volume.

4. Transfer approximately $13.99 back to the main account (the $0.01 difference accounting for execution slippage and trading fees).

5. Transfer $X minus $1 via internalTransfer to the next airdrop wallet.

The next wallet then repeats the same process.

The 34,510 internal transfers in this operation cost Themino a total of $34,510 in protocol fees, a strategy consistent with his trading history on Polymarket.

Themino also bet "No" on Polymarket for "Will the US strike Iran before February 28, 2026?", losing about $80,000. The strike occurred on February 28.

What Types of Builders Are There?

Hyperliquid attaches an identifier to orders routed through third-party frontends, allowing these applications to charge custom frontend fees. This identifier is the builder code and the most direct way to determine which interface a wallet used, if any. Among wallets that traded across the four markets, these builders can be broadly categorized into three types.

Algorithmic Builders. These are products designed for retail users to maximize volume on a DEX to farm potential airdrops. Before late 2025, farming points on a perpetual DEX meant either wash trading or algorithmically running non-directional taker-vs-taker strategies, which were costly for participants and net-negative for the exchange. Retail market-making bots like @tread_fi, @PlanemoTrading, and @origamitech_ replaced wash trading with genuine value-added market making. Every order placed by these products is post-only, meaning wallets add liquidity to the order book rather than consuming it.

As @davidyjeong, CEO of @tread_fi, stated: "Before retail market-making solutions, farming points on a perpetual DEX meant wash trading, artificially inflating volume at the cost of execution fees, slippage, and the risk of account bans. We solved this with a new farming method: bots only place maker orders on both sides. Users farm at lower costs, often profit from captured spreads, and the byproduct is real top-of-book liquidity exactly when markets like HIP-3 stock perpetuals need it most—overnight and on weekends when traditional market makers are absent. It's a better way to farm and a reason why HIP-3 markets have excellent execution today."

The contribution of these market-making bots is most evident during periods when traditional market makers are absent. CME WTI futures close on Friday afternoon and reopen Sunday evening, and stock perpetuals face the same "overnight plus weekend" gap. During these times, retail market-making bots sustain the top-of-book on markets like xyz:CL and xyz:TSLA.

It's important to note: In this analysis, we classified wallets routed through these algorithmic products as Airdrop Hunters, but their trading behavior and market impact are structurally different from Sybil activity.

Wallet-Embedded Builders are perpetual contract interfaces embedded within consumer-grade wallets. Since early 2026, these integrations have become one of the largest sources of retail order flow on HIP-3. This group includes @phantom, @MetaMask, @Rabby_io, @rainbowdotme, and @OneKeyHQ. Their median volume per wallet ranges between $1,000 and $3,000, consistent with retail users who prioritize ease of use over marginal builder fees.

Application Builders are standalone perpetual frontends and integrated products: offerings tailored for traders with specialized 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 the wallet-embedded type but higher volume per wallet, consistent with more advanced users who value functional depth over plug-and-play convenience. These products include the @InsilicoTrading terminal, @liquidtrading, @hypurrdash, @BasedOneX, @Dreamcash, @infinex, @pear_protocol, @defiapp, and @pvp_dot_trade.

@0xVKTR, Head of Growth at @InsilicoTrading (the team behind the Insilico terminal), describes: "At Insilico, we view HIP-3 markets as the next step in making real-world exposure native to crypto rails. Traders want more than just another frontend. They want fast execution, clean market access, and the ability to seamlessly switch between crypto and macro assets without leaving their existing workflow. Trade.xyz is one of the clearest examples of this demand. The order flow routed through Insilico proves there is a genuine base of advanced users for on-chain perpetuals when the venue has depth, the product is useful, and the trading experience is built for serious participants."

Who Are the Largest Market Makers on Trade.xyz?

The market-making landscape across Trade.xyz markets is highly concentrated. The top 5 market makers account for 50% of the market-making volume, the top 13 for 80%, and the top 21 for 90%. A handful of market-making desks support the vast majority of this exchange's order book.

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

The second-largest market maker is the most interesting wallet in the entire sample. 0xc926ddba…98d3, with a volume of $4.