Why Extended is pursuing a regulated path in Europe TLDR: European retail already trades inside licensed apps, and regulated platforms typically need regulated venues they can integrate. Extended is building one. Builder codes let partners plug Extended into their own product: through the existing venue for self-custody users where available, and through the regulated venue for regulated clients once live. Europe has close to 10,000 fintech companies, and hundreds of licensed investment firms and credit institutions. Most are exploring new ways to engage their retail user base, and perps are consistently near the top of the list. All of them are potential clients for a regulated exchange. That market opportunity drove our decision to build a regulated venue in Europe: 1. Retail is the user base we are building the regulated offering for. We have said before that sustainable growth is built on product quality, distribution and community rather than financial incentives. For a trading product, the largest pool of users is retail, and reaching it is a distribution problem. 2. Perp DEXs processed roughly $600 billion in volume over the past 30 days. CFD brokers alone show the size of the addressable market: around $30 trillion a month, with a large share of it in Europe. The largest platforms already earn most of their volume outside FX, in equities, indices, commodities and crypto. On-chain perps is a market we know well and intend to keep serving, but the larger opportunity sits next to it: tens of millions of retail traders already active on regulated platforms, many of whom have no access to perps today. 3. There are three retail markets at the scale that matters: the US, Europe and Asia. The US is the most contested, with many major exchanges and brokers competing for the same users and a long licensing path. Asia has high perps penetration but regulatory approaches vary by jurisdiction. Europe is where we are starting, and we will look at other regulated markets as and when it makes sense. 4. Regulated crypto derivatives in Europe have only recently expanded. Kraken, Coinbase and Bitstamp (owned by Robinhood) launched futures for EU clients over the past 18 months, each using regulatory infrastructure obtained through an acquisition of a licensed investment firm or exchange. That route is open to a handful of firms with the balance sheet for it, but for the far larger group of fintechs and brokers with users and no perps infrastructure, it is not. Our model is to offer builder codes on both venues: a way for partners to plug perps into their own apps, route users’ orders to the venue and earn a share of the fees. Self-custody wallets can integrate with the existing venue where available. Regulated brokers and fintechs will be able to use the regulated venue once it is live. 5. A regulated perps setup takes significant time and resources to build from scratch, and many fintechs lack the product and market expertise to run it well, starting with established market-maker relationships. For smaller players the economics may not work. For larger ones, regulated builder codes cut time to market, especially inside slow-moving large organisations, and deliver a quality product from day one. 6. The demand is clear. We are already in conversations with wallets, CFD brokers and fintechs across Europe, and we repeatedly hear the same request: a regulated venue with a broad range of crypto and RWA markets they can integrate. Importantly, this does not change our DeFi offering or our commitment to the early community. The existing venue stays for crypto-native users where it is available. The regulated venue adds a new distribution channel and a new user base. Europe is the first step. Over time, we expect to replicate the same model in other markets, including the US. Our plan is subject to the relevant regulatory authorisations, and we will share specifics as they are confirmed. At a high level, we have an initial route to market, followed by a transition to our own licences. Disclaimer: This post is for informational purposes only and is not an offer, solicitation or recommendation. It contains forward-looking statements that are subject to change and to regulatory approval. Perpetual derivative contracts do not provide ownership of, or shareholder or other rights in, the underlying assets or companies. Trading involves leverage and significant risk, including possible total loss. Availability is subject to eligibility and jurisdictional restrictions.

What multi-asset collateral unlocks for @extendedapp's roadmap: - Alongside multi-asset collateral, we have built spot trading infrastructure (all non-USDC liquidations already route through the native spot market), leveraged spot and a lending protocol. - As the next step, we will open spot trading to users and expand lending beyond the Extended ecosystem to support broader DeFi use cases. - Reasonably soon, we will multiply the number of crypto and TradFi markets available on Extended, while keeping liquidity and execution quality as top priorities and upgrading spot trading to support leverage. While multi-asset collateral is only one part of the broader vision, it is foundational to Extended’s goal of building one margin account across all markets: hundreds of crypto and TradFi perpetual markets, leveraged spot, an open lending protocol, yield products (XVS), and other trading products.

What's unique about Extended’s native money market. With multi-asset collateral now live, @extendedapp users can deposit ETH and wBTC (with USDT and EURC coming shortly) and use them as margin to trade perpetuals. When a user's USDC balance goes negative, borrowing is triggered automatically with the Extended Vault serving as the primary lender. The key difference is how borrowing rates work. Traditional crypto money markets typically operate through isolated lending pools, where interest rates depend only on utilisation of a specific pool. Collateral risk is managed separately through haircuts and borrowing limits. Extended's setup is fundamentally different. The Vault lends against multiple collateral assets simultaneously, while borrowing demand emerges dynamically from unrealised PnL. In this environment static global borrowing caps are not practical. As a result borrowing rates depend on two dimensions: - overall vault utilisation - utilisation against a specific collateral asset. This means borrowing USDC against ETH can be cheaper than borrowing against BTC if system-wide exposure to ETH is lower. The second layer is how borrowing is allocated. When a user has multiple collateral assets, the system automatically routes borrowing through the lowest-rate collateral first, minimising the effective cost of capital. Example: if a user has a negative USDC balance backed by both ETH and wBTC collateral, and ETH borrow rates are lower than BTC, the system will allocate borrowing against ETH first before routing the remainder against BTC, continuously reducing the effective cost of capital. The result is a system where: - users automatically receive the cheapest borrowing allocation across their collateral portfolio - Extended maintains granular risk control over exposure to different collateral assets backing borrowed USDC - vault depositors earn additional yield directly from trading activity.

Perpetual futures will become a primary venue for price discovery in TradFi markets, but they will not replace dated futures and options. Today, price discovery happens across different instruments. Equities and FX primarily trade on spot markets, while commodities and energy rely on dated futures. USDC-settled perpetuals offer structural advantages that make them a strong alternative for trading and liquidity concentration: 1. They trade 24/7 2. They aggregate liquidity into a single order book and are structurally standardized 3. They enable higher capital efficiency through continuous margining Importantly, many of these advantages are structural. Traditional financial markets are not 24/7 not only due to historical inertia, but because risk management and settlement operate in discrete cycles. Margining is not continuous, and collateral transfers and custody updates occur in batches, requiring system-wide coordination. At the same time, traditional derivatives markets fragment liquidity. Dated futures split liquidity across expiries, while options spread it further across expiries and strikes. As a result, liquidity is distributed across many instruments. Perpetuals reverse this dynamic by consolidating liquidity into a single instrument per asset and providing a standardized structure across markets, with no rolling and simpler basis management. This makes them easier to hedge and trade. Perpetuals also allow for more capital-efficient use of margin through continuous risk management and liquidation mechanisms, although this comes with different risk trade-offs compared to the more conservative, discrete systems used in TradFi. Given these dynamics, USDC-settled perpetuals will become a primary venue for trading and price discovery in TradFi assets over time. However, several challenges remain: 1. Trust and inertia: Institutions will need time to build confidence in crypto-native infrastructure and adapt their internal processes and risk frameworks, for example moving from futures term structure to perp funding dynamics. 2. Index definition: Perpetual markets depend on a clear and reliable reference price. For TradFi assets, this requires consistent and widely accepted methodologies. This means spot-based references for equities and FX, and derived spot prices from futures for commodities and energy. In practice, areas like futures roll and non-trading hours are not yet fully standardised across the industry. We also recognise that the current approach used by Extended is not yet ideal, and we are actively working to improve the definition of a fair and robust reference price. Even if perps become dominant for trading, they will not replace dated futures and options, as these serve different purposes: 1. Dated futures provide time-specific hedging and a strong link to the real economy through physical delivery and convergence to spot at expiry. 2. Options provide convex payoffs and enable trading and hedging of volatility. In summary, perpetuals are structurally better suited for liquidity aggregation and continuous trading, and will play a leading role in price discovery. However, they will coexist with dated futures and options, which remain essential for time-specific hedging and non-linear risk management. Bridging perps and TradFi represents one of the largest and most durable opportunities in financial markets and is a core focus for Extended.

State of liquidity and execution on @extendedapp v3 Following fair feedback from the community that average buy/sell slippage over a 12-hour window may not be representative, this time we: 1. Measured slippage for market orders on BTC and ETH across $10k, $100k, $500k, and $1M clip sizes every 30 seconds on @HyperliquidX, @Lighter_xyz, and @extendedapp, from Dec 17 05:40 UTC to Dec 20 07:40 UTC (8,892 snapshots). 2. Calculated average hourly slippage, split by buy vs sell and by clip size. Overall, the results are in line with the previous analysis (linked in the comments). BTC 1. Extended offers slightly lower slippage on sub-$100k orders compared to both Hyperliquid and Lighter. 2. Hyperliquid has better liquidity for $500k and $1M clip sizes, while Extended and Lighter are on par. ETH Slippage is comparable across all clip sizes on Hyperliquid, Lighter, and Extended. Full dataset: docs.google.com/spreadsheets… In the next iteration, we’ll share a similar analysis for some of the major altcoins.

Perps have only a limited set of dimensions across which one can innovate and over the last 2 years we saw innovation across all of them except Collateral. 1. Liquidity Provisioning. @HyperliquidX was the first to launch the community vault, providing APR for depositors, reinforcing exchange liquidity and trading activity, which is now adopted by most players in the space. 2. Fees Structure. @Lighter_xyz was the first to introduce the zero fees model. As discussed many times, there are both pros and cons to this approach for the business and for end users, but it was an innovation in the market. 3. Ways of trading. @HyperliquidX came up with builders code (which we launched as well), allowing external teams to access underlying exchange infrastructure and liquidity and enable different frontends and use cases for trading perps (wallets, trading terminals, Telegram bots, etc). I believe we are yet to see innovation in the UX of perps trading, as the main trade screen of exchanges has not significantly changed over the years. 4. Markets one can trade. In 2025 we saw multiple perp DEXs, including @extendedapp, offering TradFi perps and I believe that over the coming years this trend will strengthen and we will see growth in OI, volumes and exchanges offering them. Earlier last year we saw pre-launch markets, which were an interesting concept that never really took off due to the complexities of providing stable and deep liquidity. Generally, adding new market types is the least important innovation, as any perp DEX can offer any market as long as there is a mark price and a market maker or vault ready to quote those assets. 5. Collateral. I do not think we saw any innovation on this front, with USDC being the sole collateral on perp DEXs while cross asset collateral and unified margin have been available on CEXs for years. Next Monday we will be releasing tokenisation of vault shares (a new type of collateral) and we believe it stands a good chance of getting traction among our users and potentially being adopted by other perp DEXs in the longer run, similar to how every perp DEX adopted community vaults. We will be releasing it in stages, with the full release plan to be communicated tomorrow. In a nutshell the idea is very simple. Allow users to post vault deposits or shares as yield bearing collateral for perps trading. In the target state: 1. eXtended Vault Shares (XVS) will contribute 90 percent of their value to user equity, essentially doubling overall collateral available for trading on the exchange. 2. Yield that vault depositors receive will depend on the trading activity of the user. There will be a base yield (currently ~15% all-time APR) available to all vault depositors and an extra yield that will depend on the user activity. The most active users will receive the highest yield. The fair question that many would ask is how liquidations will work given that XVS represents a claim on the vault equity, which includes open positions. The logic will work as follows: 1. When a user with an XVS balance becomes liquidatable, the first step of the liquidation process is to liquidate their XVS balance, meaning withdraw it from the vault. 2. When performing a liquidation or withdrawal of vault shares, the vault closes its open positions in proportion to the liquidated or withdrawn XVS. 3. If the vault for some reason cannot close its positions via the order book (e.g., due to lack of liquidity), a new type of operation will be enforced, called Force Close. The vault will close positions against the most profitable and highly leveraged user on the opposite side at the Mark Price. Force Close is similar to ADL but unlike ADL, where positions are closed at the bankruptcy price of the liquidated user, in Force Close positions are closed at Mark Price without incurring direct losses to the user on the opposite side. Given the existing risk limits of the vault (i.e. max position it can take on on the given market), we expect force close to be used only in the extreme scenarios. 4. Given the above, the XVS balance of the liquidated user can always be withdrawn from the vault. 5. Once the XVS balance of the liquidated user is withdrawn, we proceed with the regular liquidation process. The other valid concern we heard is what happens if the vault suffers significant losses while liquidating unhealthy users (the JELLY case), driving XVS price down and leading to a cascade of liquidations. Extended Vault processes liquidations deterministically, meaning that before taking over a liquidated position it knows: 1. that the position can be closed (vault will never take over the position it can't close) 2. that the realised loss will not be above its maximum acceptable loss per trade, per market or per day Hope the above clarifies the intended logic of the upcoming XVS release.

Continuing to share stats on Extended. Here’s the distribution of trade sizes across market types for the period Sept 10-19. Overall, the distribution logic is expected, majors have larger trade sizes compared to smaller markets. What’s interesting is that TradFi markets show 3–5x bigger trade sizes, while in crypto markets: 1. 90% of trades are < $1,000 2. 75% of trades are < $300 3. 50% of trades are < $150 docs.google.com/spreadsheets…

We are far from perfect and there’s still a lot of work to do to bring @extendedapp to its target state in terms of resilience, features, and liquidity. But we learn from mistakes and make sure users impacted by them are refunded. We truly appreciate the support and positive reactions from the community.

State of liquidity and execution on @extendedapp There is obviously a lot of work to be done to improve the liquidity on the exchange, but it’s good to see that in terms of total cost of execution (taker fees + slippage*), when compared to Hyperliquid base rate and Lighter, @extendedapp is already competitive, especially on alts. *Slippage represents the average bid-mid and ask-mid spread across 718 snapshots taken every minute between 14:00 UTC on 17/09 and 07:00 UTC on 18/09. docs.google.com/spreadsheets…