📊BOND perpetuals

1. Overview

BOND and TLT Perpetuals are on-chain structured rate instruments that bring real-world bond markets into the BasisX perpetual framework. They allow traders to hedge or speculate directly on the price movements of tokenised bond ETFs such as BND (Vanguard Total Bond Market ETF) and TLT (iShares 20+ Year Treasury Bond ETF).

These perpetuals are linear contracts, margined and settled in USDC. The oracle is denominated in USD, and no USDC/USD conversion is applied. Economic exposure is therefore quanto in USD, with P&L cash-settled in USDC.

All BOND and TLT perpetuals are currently isolated-margin only; cross-margin support will be added in future HIP-3 upgrades.

Both instruments are listed on the BasisX HIP-3 deployment, where matching, order types, funding, liquidation, and ADL logic are managed by HyperCore. The oracle price and mark price are bespoke BasisX components, and the BasisX relayer publishes oracle and mark price updates approximately every 3 seconds.

2. Mark Price

The mark price—used for margining, liquidations, stop/limit triggers, and unrealized P&L—is defined as the median of three components:

  1. The Bond Oracle Price (see Section 3).

  2. The sum of the oracle price and a 150-second exponentially weighted moving average (EWMA) of the difference between the perpetual’s mid-price and the oracle price.

  3. The median of best bid, best ask, and last trade prices.

At each tick, the BasisX relayer publishes (1) and (2). The Hyperliquid protocol computes (3) and takes the median of all three to form the final mark.

This ensures:

  • Mark stability

  • Manipulation resistance

  • Smooth convergence between market and oracle valuation

3. Oracle Price — Oracle BOND & TLT Feeds

The oracle provides the pricing reference for both funding and mark price calculations.

For BOND and TLT perpetuals, the oracle anchors directly to Pyth Network’s institutional-grade real-time price feeds for bond ETF assets:

  • BOND/USD (Vanguard Total Bond Market ETF) Oracle Feed – Equity.US.BND/USD

  • TLT/USD (iShares 20+ Year Treasury Bond ETF) Oracle Feed – Equity.US.TLT/USD

External Pricing

During active market sessions (e.g., NYSE trading hours), the oracle consumes price data for the underlying bond ETF directly from Oracle's Network, which aggregates verified institutional sources.

Each new oracle update is transmitted by the BasisX relayer to the on-chain HIP-3 deployment as the oracle price:

St = OraclePriceBOND/USD or TLT/USD

The oracle updates at sub-minute frequency, ensuring BasisX remains synchronized with real-world bond price movements.

Internal Pricing (Off-Market Hours)

When external updates are unavailable (e.g., weekends, holidays, or temporary feed outages), the oracle advances via a continuous-time exponentially weighted moving average (EMA) to maintain pricing continuity.

St = βt St−1 + ( 1 − βt ) (St−1 + I P Dt )

where

βt = e−Δt/τ , τ=8 hours

and

I P Dt=max⁡ ( PimpactBid − S , 0) − max ⁡( S − PimpactAsk , 0 )

  • PimpactBid / PimpactAsk ​: average execution prices for a configured impact notional amount on bid/ask sides.

  • If insufficient depth exists on one side, that side’s contribution is set to zero.

When oracle's external pricing resumes, the oracle instantly re-anchors to the live feed at the next tick.

Mark Price Guardrail

To mitigate manipulation during inactive sessions, the mark price is restricted to remain within 1 / max leverage of the last externally derived oracle value. Example: if BOND oracle = $75 at NYSE close and max leverage = 10×, the mark price range is constrained to ($67.5 – $82.5) until external data resumes.

4. Economic Exposure

BOND and TLT perpetuals provide direct, 24/7 exposure to global fixed-income markets.

  • Long BOND/TLT → Profits when bond prices rise (yields fall).

  • Short BOND/TLT → Profits when bond prices fall (yields rise).

This creates a continuous, crypto-native market for interest-rate and duration risk.

5. Use Cases

1. Hedging RWA Exposure

  • RWA protocols or DeFi treasuries holding tokenised bonds can short BOND or TLT to hedge against rising yields.

  • If yields rise (bond prices drop), the hedge position gains value.

2. Macro Speculation

  • Long BOND/TLT to express a bullish view on bond prices (expecting rate cuts).

  • Short BOND/TLT to express a bearish view (expecting higher yields).

3. Cross-Market Rate Arbitrage

  • Arbitrage relative moves between BOND, TLT, and yield-based perps (e.g., stETH, BTC funding).

  • Construct synthetic yield-curve or duration-spread trades directly on-chain.

6. P&L Calculation

PnL is computed linearly as:

PnL = K × N × ( Pt − Pentry)

where

  • K=$1

  • N= position notional in USD

  • Pt=St ( oracle or mark price )

This ensures consistent, transparent payoff behaviour aligned with other HIP-3 markets.

7. Safety Parameters

  • Oracle and mark updates constrained by ±1% per tick HIP-3 limit.

  • EMA fallback ensures smooth continuity during off-hours.

  • Mark deviation limited to 1 / max leverage of last valid external oracle.

  • Cross-margin and advanced collateral models to be added in upcoming BasisX releases.

8. Summary

BOND and TLT perpetuals extend BasisX into real-world interest-rate markets, powered by our oracle's institutional price feeds. They allow traders to hedge, speculate, and arbitrage bond prices 24/7 — bridging TradFi fixed-income and DeFi perpetuals into one unified yield ecosystem.

PreviousFundamentalsNextFunding Rate Perpetuals

Last updated