FalconX has launched a margin financing product for trading on Hyperliquid, extending its prime brokerage services into decentralised finance derivatives and offering clients up to 5x leverage on the venue.
Branded Prime Brokerage Financing for Hyperliquid, the product sits alongside FalconX’s existing prime brokerage services for centralised exchanges and over-the-counter trading. FalconX described the move as a step towards applying its financing and risk approach to on-chain markets.
Hyperliquid is a decentralised derivatives venue that has gained traction among crypto traders. It operates on-chain within the wider decentralised finance market, where trading and settlement occur through blockchain-based systems rather than through a centralised exchange operator.
The arrangement allows clients to use leverage when trading on Hyperliquid, with margin and risk managed at the portfolio level within a single prime brokerage relationship.
“As DeFi markets continue to grow, financing and risk frameworks need to evolve alongside them,” said Matthew Long, General Manager, APAC & Middle East at FalconX. “By extending our prime brokerage financing to Hyperliquid, we’re bringing FalconX’s risk discipline and capital framework into onchain markets.”
Portfolio Margining
FalconX said the product is designed to avoid fragmented credit and collateral across multiple venues. Margin is managed against a single collateral pool, with portfolio-level margining and risk management across supported venues.
This applies to direct market access clients trading across Hyperliquid and other supported venues, including Binance, OKX, Bybit, and Deribit. The structure enables portfolio-level netting across all supported venues.
Portfolio netting is common in traditional prime brokerage, where offsetting positions can reduce margin requirements across accounts. In crypto markets, margin and collateral are often kept separately on each exchange, increasing the idle collateral required to run multi-venue strategies.
Clients can track balances, positions, margin, and risk across venues through FalconX’s client platform, giving them a consolidated view of exposures covered by the financing arrangement.
Institutional Demand
Institutional participation in crypto markets has risen in recent years, spanning spot trading, derivatives, and systematic strategies. At the same time, decentralised exchanges and on-chain derivatives venues have grown in volume and liquidity, although their market structures differ from those of centralised platforms.
Some institutional participants have been cautious about on-chain venues due to operational requirements such as self-custody, transaction controls, and the need for clear governance around wallets and authorisations. Prime brokerage financing in crypto has also tended to focus on centralised venues and bilateral arrangements rather than decentralised derivatives.
Monarq Asset Management, which trades digital assets, described the launch as a shift in how institutions can access DeFi markets.
“This represents a real evolution in how institutions engage with DeFi,” said Shiliang Tang, Managing Partner at Monarq Asset Management. “By combining DeFi-native execution with a prime brokerage financing framework, it unlocks a level of capital efficiency that has not previously been available through onchain trading venues.”
Custody Controls
FalconX said trading on Hyperliquid under the arrangement uses self-hosted custody with Fordefi, which it described as an institutional multi-party computation wallet platform with shared governance and transaction controls. Each client trades through a dedicated Fordefi wallet, with governance and transaction policies agreed in advance.
Station70 provides third-party recovery infrastructure as part of the setup, FalconX said, positioning it to support operational resilience while clients retain custody of their assets.
The custody design highlights a key difference between centralised and decentralised trading. On a centralised exchange, clients typically deposit assets to the exchange or an exchange-linked custodian. At a decentralised venue, trading often requires users to hold assets in wallets that interact directly with smart contracts, which introduces additional operational and risk considerations.
Broader Push
FalconX has built its business around serving institutional clients in digital assets. Prime brokerage in the sector typically covers financing, execution, credit, and operational services across exchanges and counterparties. FalconX said the Hyperliquid rollout allows DeFi derivatives trading to sit under the same portfolio financing and risk framework used across broader allocations.
Product and service availability varies by jurisdiction and depends on applicable regulatory requirements.
FalconX expects institutional trading strategies to span both centralised and decentralised markets under a single financing and risk framework.
