Hyperliquid Policy Center and trade[XYZ] have jointly filed a comprehensive regulatory proposal to the U.S. Securities and Exchange Commission, seeking a framework for pre-IPO perpetual contracts. According to the 15-page letter, the proposed instrument would provide cash settled price exposure to companies approaching public listings without conveying shares, voting rights, IPO allocations, or claims against the issuer. The SEC has posted the letter publicly but has not endorsed or approved the proposed products, adding it to the public IPO modernization docket. The proposal responds directly to the SEC's request for ideas to modernize the IPO process and argues that pre-IPO perpetuals, or IPOPs, could give investors and issuers a continuous public market signal before shares begin trading. Unlike private secondary markets, IPOPs do not provide ownership, voting rights, allocations, or claims against the underlying company - instead giving traders price exposure to an anticipated listing before the stock enters public markets.
A crypto futures contract tracking Unitree Robotics surged to approximately $100 per share on Hyperliquid's blockchain platform, implying a company value of about $40.5 billion ahead of its Shanghai listing. According to Bloomberg, this represents a four-fold increase from the company's IPO price of $9 billion. Unitree is set to list on the STAR Market on the 19th at a valuation of $9 billion, with the futures market predicting a strong chance the stock will spike more than fourfold above the IPO price on its first trading day. Dilin Wu, a research strategist at Pepperstone Group, noted that Unitree is the first pure-play humanoid robot stock across all listed markets, making it the first case where real price discovery takes place in the public market. The company set its IPO price 45% above the market consensus of 104 yuan, following demand forecasting conducted for institutional investors on the 5th and 6th.
Trade[XYZ] reported completing five IPOP markets tied to Cerebras, Quantinuum, SpaceX, SK Hynix, and ChangXin Memory Technologies, with products operating for between one and 25 days before listings. As reported by the applicants, each contract's final price before trading began was within 0.44% to 7.23% of the relevant stock's opening price. According to the latest filing, US offerings were priced between 10.8% and 38.4% below where their respective IPOP markets traded the previous day. The groups argue that these markets could help issuers and underwriters assess investor demand before setting an offering price, potentially reducing large gaps between IPO pricing and opening trades. Early results from these completed markets show Cerebras opened 89% above its IPO price, while SK Hynix and SpaceX opened 14% and 11% higher respectively. These valuation gaps demonstrate why continuous pre-listing markets could matter, as public demand becomes visible before banks finalize offering prices.
The Hyperliquid Policy Center has identified five key items the SEC must consider before opening IPOP markets for trading in the U.S. These include the instrument's classification, issuer disclosure, listing-eligibility guardrails, market integrity, and onshore IPOP access for all investors. According to the letter, the SEC and Commodity Futures Trading Commission must determine whether equity linked perpetuals are security futures or security based swaps, which would decide applicable registration, trading venue, clearing and margin requirements. The proposal includes rules for product disclosures addressing funding rates, leverage, liquidations, pricing methods, settlement and contract conversion, with listing rules potentially limiting IPOPs to defined periods after public filing. Additional proposals include eligibility rules limiting when IPOPs can launch, market integrity requirements, and a phased framework that could eventually allow US retail investors to access the products. The letter specifically asks the SEC and CFTC to clarify how equity linked perpetuals should be classified and regulated.
The proposal includes market integrity provisions such as audit trails, conflict controls, and restrictions on deployers or affiliates trading while holding material nonpublic information. As reported by crypto.news, trade[XYZ] experienced an 18% price drop in an SK Hynix perpetual after an unusually low share transaction entered oracle inputs, triggering liquidations. The company later agreed to cover eligible losses as a discretionary measure, highlighting the need for disclosed oracle rules and market controls. The latest filing recommends disclosure requirements focused on contract mechanics, leverage, liquidation thresholds and settlement rules to ensure proper risk management. Hyperliquid argues that Americans are missing out on pre-IPO exposure opportunities, including SpaceX, which was priced at $135 and listed at $150.
Hyperliquid's market expansion beyond cryptocurrency derivatives is gaining significant traction, with open interest growing to over $11 billion and over 264,000 active perpetual traders as of early August. According to AMBCrypto, this broader derivatives activity indicates that new markets are attracting numerous participants, though the financial impact on Hyperliquid's treasury from transaction fees continues to decline. Despite increased trading activity, the total amount of capital flowing into Hyperliquid's treasury from transaction fees remains relatively less clear-cut than the activity itself, as HIP-3 markets retain part of the fees generated through their markets. The expansion reduces Hyperliquid's reliance on speculative activity related to cryptocurrency derivatives, while issuers may receive additional pricing references, resulting in smaller first-day premium pricing at listing and allowing issuers to retain more value during the listing process.
