On Saturday, February 28, conflict in the Middle East halted energy exports from the region and disrupted global supply chains. Oil markets were closed. Airlines, refiners, and fund managers holding crude exposure had no regulated venue in which to react until futures reopened Sunday evening, and by March 9, Brent touched nearly $120 per barrel. Within weeks, jet fuel prices doubled. Airlines that had hedged their fuel costs absorbed the shock; those that had not cut flights and took losses in the months that followed.

As the Wall Street Journal, the Financial Times, and Bloomberg all reported, market participants outside the United States were able to use oil-linked perpetual contracts on Hyperliquid to manage crude exposure while U.S. futures markets were closed. Over the conflict’s first weekend, roughly two-thirds of the total move from Friday’s close through the benchmark’s reopening had already occurred onchain before the conventional markets resumed trading. Continuous price discovery means participants can respond to information in real time, adjusting positions and managing price risk as events unfold instead of waiting for a venue to open.

The Commodity Futures Trading Commission, the agency that oversees U.S. derivatives markets, is building a regulated market for perpetual contracts one asset class at a time. In May, the Commission permitted the first perpetual contracts to trade as futures on a U.S. exchange, limited to contracts with digital asset underliers. At the time, the Commission issued an accompanying policy statement flagging contracts referencing other asset classes, including energy, as warranting additional review. In June, the Commission issued a request for comment on energy markets directly, posing a broad set of questions about perpetual contracts referencing physically delivered and storable commodities, including contract design, reference prices, market integrity, clearing, customer protection, and continuous trading.

Today, HPC and trade[XYZ] filed a joint comment letter urging the Commission to bring energy perpetual contracts into the regulated U.S. market. trade[XYZ] is the first and largest third-party deployer of perpetual contract markets on Hyperliquid, and its markets, including WTI, Brent, and Henry Hub natural gas, have traded more than $500 billion in cumulative volume since launching in October 2025. Our comment pairs trade[XYZ]’s deep expertise in these markets with our recently published study, Perpetual Futures as Complements to Dated Futures, to make the case that energy perpetual contracts belong in regulated U.S. markets and that onchain infrastructure equips them to serve market participants around the clock.

Perpetual contracts give market participants a simpler way to hold continuous price exposure. Since perpetual contracts have no expiry, a hedger can hold one position instead of a sequence of expiring ones, with no roll to execute, pay for, or mistime. Trading interest concentrates in a single order book rather than fragmenting across contract months, which supports deeper liquidity and tighter spreads. Perpetual contracts also trade in units sized to actual exposure. The benchmark WTI future trades in 1,000-barrel increments, roughly $70,000 of notional exposure at recent prices, while the median off-hours trade in trade[XYZ]’s crude oil market runs near $1,300.

Perpetual futures are a useful tool alongside dated futures, not a replacement for them. Dated futures will continue to serve participants whose needs are tied to specific delivery months, physical settlement, and the term structure of prices. For the growing number of participants whose exposure is continuous, the perpetual contract is the better fit, and our comment asks the Commission to open a regulated path for it alongside the dated benchmark. 

The central question in the Commission's inquiry is whether a contract that never expires can reliably track the price it references. A dated future converges to the spot price once, at expiry, while a perpetual contract converges continuously, through a funding rate that gives traders a standing incentive to trade against any deviation from the reference price. That mechanism has worked in live markets: in nearly 75 percent of the weekend closures that our study sampled, the crude oil perpetual contract’s weekend price landed closer to the benchmark’s Sunday reopening than the benchmark's own Friday close. Trading alongside a perpetual contract has not degraded the benchmark: our study found no statistically significant deterioration in the quality of CME WTI reopenings since the crude oil perpetual contract launched.

Perpetual contract markets are particularly useful when they take advantage of onchain infrastructure like Hyperliquid. Traditional markets close because of everything around the trade: clearing, margin, settlement, surveillance, banking hours, and end-of-day processes. Running those operations continuously requires around-the-clock staffing and infrastructure that traditional markets have not yet built, so the venue closes while its participants remain exposed to risk.

Onchain market architecture performs clearing, margining, and surveillance continuously and in public view. Every position is pre-funded, and margin is reassessed on every trade rather than at the next scheduled settlement cycle, so a weekend price move never waits on a bank to reopen. When a position does fail, liquidation runs through a staged, rules-based default process, and ordinary order book liquidation has resolved 97.9 percent of all notional volume liquidated across trade[XYZ] markets to date, with pre-specified backstop and tail mechanisms accounting for the remainder. Every order, fill, margin change, and liquidation is written to a public ledger that supports continuous, real-time surveillance without imposing new reporting burdens on market participants.

Our comment recommends guardrails appropriate for U.S. access to perpetual contracts on energy commodities: leverage limits calibrated by asset class, plain-language disclosure of funding and liquidation mechanics, and other market integrity safeguards.

Bringing energy perpetual contracts into the regulated U.S. market requires no new legislation. The May CFTC order shows that the existing framework can accommodate the product. The Core Principles, the outcome-based standards that govern U.S. exchanges and clearinghouses,  are agnostic as to when trading occurs. Only narrow, technical questions about continuous operation, such as recovery timelines tied to the next business day. Our comment asks the Commission to take five steps:

1. Adopt a technology-neutral, principles-based framework for evaluating energy perpetual contracts and 24/7 trading, rather than prescribing particular technologies or organizational forms.

2. Reaffirm and build upon prior guidance by confirming that exchanges and clearinghouses may operate around the clock where they demonstrate compliance with the Core Principles.

3. Clarify how time-bound requirements, including the meaning of “business day,” apply to continuously operating markets.

4. Recognize stablecoins and tokenized traditional collateral as eligible margin for cleared derivatives, because a market that trades on weekends needs collateral that moves on weekends.

5. Confirm that regulated markets may use onchain infrastructure for execution, margining, clearing, settlement, and recordkeeping, where the applicable Core Principles are satisfied.

The work that the Commission began in May to bring perpetual contracts into the United States points naturally to energy commodities as the next step. When another crisis breaks on a Saturday night, American businesses should not have to wait until Sunday evening to manage their risk. HPC is focused on ensuring that U.S. market participants can access onchain perpetual contract markets under American oversight, and we will continue engaging with the Commission and its staff to that end.

Read our full comment letter here.