Wintermute Won 76% of Hyperliquid's Top Data Auctions, Sparking Fairness Debate

One firm took more than three-quarters of the spoils. Wallets linked to crypto market maker Wintermute won roughly 76% of Hyperliquid's highest-priority data auctions over the past month, according to blockchain analytics platform Loris Tools, and the concentration is now drawing questions about whether the exchange's paid early-access system tilts the field toward deep-pocketed firms.

The auction system lets traders pay for early access to incoming order data. Winners see orders milliseconds before execution. That gives their algorithms time to adjust quotes or hedge positions on other venues before the trades land. Hyperliquid separately sells execution priority for participants' own orders — a different mechanism governing speed of processing rather than access to information.

Hyperliquid runs a decentralized exchange for perpetual futures, contracts with no expiration date that traders can hold as long as margin requirements are met. Its developer, Singapore-based Hyperliquid Labs, defended the auctions. Participation is open to everyone, the company said, and payments are publicly recorded on-chain.

"Priority fees make latency competition open and transparent," a spokesperson told Bloomberg.

What does the dominance mean for smaller traders?

Wintermute declined to confirm its share of auction wins or disclose what it spends on the service. Founder and CEO Evgeny Gaevoy said the firm mainly uses the mechanism for cryptocurrency trading rather than derivatives tied to traditional financial assets.

Gaevoy framed the practice as nothing new. "Firms invest in low latency networks, microwave towers and colocation," he said, noting that building such systems demands considerable money, time and expertise. In his view, Hyperliquid's auctions are the more transparent alternative because anyone can see how priority is awarded and what participants paid.

Not everyone is persuaded. Don Wilson, founder of trading firm DRW Holdings, questioned the arrangement in an Oct. 31 post on X. He compared it with traditional exchanges where firms race each other for faster access by placing servers close to matching infrastructure. Wilson asked whether Hyperliquid's setup is any fairer than those conventional arrangements — and voiced doubts about how US regulators would view the practice.

The scrutiny lands at an awkward moment. Hyperliquid has been expanding beyond crypto derivatives into perpetual contracts tied to equities, commodities and stock indexes. In September, its open interest surpassed $18 billion across both crypto and traditional-asset markets.

Why Wall Street is watching

Hyperliquid's infrastructure has caught the attention of established financial companies looking to launch similar products under US regulatory oversight.

On Oct. 29, Intercontinental Exchange — the parent of the New York Stock Exchange — announced a partnership with Trade.xyz to develop regulated US perpetual futures markets built on Hyperliquid technology. The proposed business would offer contracts tied to cryptocurrencies, equities, commodities, currencies and indexes, distributed through participating futures brokers. ICE plans to operate the regulated markets and make a strategic investment in Trade.xyz. The arrangement remains subject to regulatory approvals, including permission from the Commodity Futures Trading Commission.

It remains unclear whether the priority data auction mechanism would carry over to the proposed US venue — a question the CFTC review is likely to surface.

A second track is already moving. Kraken parent Payward has outlined plans for regulated Hyperliquid-based perpetual futures through Bitnomial and NinjaTrader Clearing. Under that proposal, Bitnomial would administer the markets and handle clearing and settlement, while NinjaTrader Clearing would maintain customer accounts. Access would be restricted to approved customers through permissioned markets.

For now, the auctions continue. But as Hyperliquid's technology moves closer to regulated US markets, the question Wilson raised in October will follow it into every regulator's inbox — and the answers may shape how paid latency advantages survive in a CFTC-supervised world.