Deepseek

Author: Nancy, PANews

In just over a year, the tokenized stock market has experienced explosive growth, with daily trading volume surging from zero to nearly $4 billion, continuously setting new records. The easing of U.S. regulations is also expected to push this sector toward mainstream adoption.

Beyond direct tokenized equity, from Hyperliquid using perpetual contracts to pioneer on-chain pricing of unlisted companies, to Polymarket partnering with Nasdaq to launch prediction markets for private companies, the discovery of valuations and capture of liquidity around Pre-IPO assets are unfolding comprehensively in the on-chain world.

Polymarket Partners with Nasdaq, Prediction Market Enters Pre-IPO Arena

On May 19, Polymarket announced an exclusive partnership with Nasdaq, officially launching prediction markets tied to the performance of private companies, marking the first foray of prediction markets into the private market space.

Under the terms of the partnership, users will be able to engage in prediction trading around metrics such as company valuations, IPO timelines, and secondary market trading activity. Nasdaq Private Market will serve as the exclusive settlement data provider for the relevant contracts, supplying the official data used to determine outcomes.

Notably, this is the first time Nasdaq Private Market has publicly released some private market valuation data for free. Previously, such data was typically only available to institutional clients via paid subscriptions.

The introduction of prediction markets allows more users to engage in price discovery, sentiment expression, and expectation trading around these popular private companies. Previously, most high-profile tech companies often completed their major valuation growth before going public, but ordinary users generally lacked channels for participation. According to Nasdaq data, there are currently over 1,600 unicorn companies globally with valuations exceeding $1 billion, including OpenAI, Anthropic, and SpaceX, with a total cumulative valuation exceeding $5 trillion.

Of course, prediction markets can also provide real-time market pricing and sentiment feedback for these Pre-IPO assets, thereby forming a more dynamic valuation reference and promoting further transparency in information flow and price discovery within the private market.

For Polymarket, this partnership not only drives business expansion but also accelerates its transformation into a mainstream financial infrastructure. Although competitor Kalshi has also launched prediction contracts related to private company IPOs, its settlement relies more on public information such as SEC filings and company announcements, which have certain lags and room for interpretation. In contrast, Polymarket directly introduces Nasdaq's authoritative data as the settlement basis, significantly enhancing market credibility and result objectivity.

More importantly, the launch of private market-related products also helps Polymarket further expand its business into traditional finance, attracting more global users, and is no longer limited to its original sectors such as politics, sports, and crypto assets.

For Nasdaq, this partnership is equally strategic. By opening its private company data to the on-chain market, Nasdaq can not only capture valuation discovery and liquidity demand in the Pre-IPO market but also extend its data capabilities to global retail and crypto user bases, expanding the influence and monetization potential of its data products. Moreover, amid the rise of crypto platforms like Hyperliquid, Nasdaq's proactive embrace of the on-chain financial ecosystem also strengthens its resilience against emerging competition.

Preemptive Price Discovery, Hyperliquid Challenges Wall Street's Pricing Power

Compared to prediction markets, the leading Perp DEX Hyperliquid has already begun to challenge the pricing power long held by Wall Street.

Months ago, Hyperliquid's HIP-3 market began bringing traditional financial assets like silver, gold, and crude oil onto the chain, gradually becoming an important price discovery market during weekends and U.S. stock market holidays, attracting attention from traditional finance circles. In April alone, the average daily trading volume of oil-related contracts on the Hyperliquid platform exceeded $700 million.

More recently, Hyperliquid has further extended its reach into the Pre-IPO space, successively listing perpetual contracts for Cerebras (CBRS) and SpaceX (SPCX). For the CBRS contract, before the company's official listing, the on-chain price was already anchored within 3% of Nasdaq's opening price, compared to a deviation of 35% on traditional secondary platforms. This means Hyperliquid has, to some extent, pioneered on-chain price discovery for Pre-IPO assets, beginning to challenge the long-dominant pricing discourse of traditional secondary markets, investment banks, and private transactions.

Data shows that the Hyperliquid HIP-3 market's trading volume over the past 7 days is approximately $17.58 billion, with open interest around $2.54 billion. To lower the entry barrier, Hyperliquid recently updated its HIP-3 documentation, gradually reducing the hard requirement of staking 500,000 HYPE to deploy a perpetual market. Portions exceeding the new threshold can be unlocked, which is expected to attract more builders in the future, further driving the expansion of on-chain financial assets.

As Hyperliquid's influence in traditional financial assets and the Pre-IPO market continues to grow, a sense of crisis from Wall Street is also heating up. Recently, institutions including the Chicago Mercantile Exchange (CME) and the New York Stock Exchange (NYSE) have begun urging U.S. regulators to intensify scrutiny of Hyperliquid, citing concerns such as potential market manipulation risks and sanctions evasion.

Facing regulatory uncertainty, Hyperliquid is also accelerating its own compliance efforts. Beyond the Hyperliquid Foundation donating 1 million HYPE tokens to the lobbying organization Hyperliquid Policy Center, with veteran crypto policy lawyer Jake Chervinsky leading regulatory communications, Hyperliquid co-founder Jeff has also personally traveled to Washington to engage in dialogue with policymakers, aiming to bring the on-chain derivatives market into the U.S. regulatory framework. Additionally, Hyperliquid has hired seasoned public relations expert George Godsal as its external spokesperson, emphasizing that all platform trades, liquidations, and funding rates are publicly verifiable, with transparency far exceeding that of traditional markets.

In the future, as more Pre-IPO assets migrate to on-chain markets, Wall Street's monopolistic valuation system and price discovery mechanisms are increasingly facing direct challenges from the crypto-native market.

New Daily Trading Volume High, SEC Innovation Exemption May Be Issued This Week

Tokenized stocks are rapidly moving from crypto-native innovation to the mainstream, with traditional exchange giants like the NYSE and Nasdaq also actively positioning themselves in this sector.

According to The Block data, as of May 18, the daily trading volume of tokenized stocks hit a new all-time high of $3.57 billion. The majority of this volume is concentrated on Binance and Hyperliquid, while platforms like xStocks, Ondo, and Bitget are also continuously driving the expansion of the on-chain stock market.

At the same time, policy easing at the U.S. regulatory level is also expected to act as a catalyst for further growth in the tokenized stock sector. According to a recent Bloomberg report citing sources, the U.S. SEC could introduce an innovation exemption rule for tokenized stocks as early as this week, establishing a new regulatory framework for crypto versions of publicly traded company stocks.

According to currently disclosed information, the SEC is leaning toward allowing third-party entities to issue tokens linked to stock prices without official authorization from the listed company, and permitting their trading on DeFi platforms. This means the tokenized stock market will gradually form a more open on-chain synthetic asset ecosystem.

Previously, due to some projects launching related tokens without company authorization, the market has seen multiple controversies. For example, Anthropic publicly warned that unauthorized tokenized stock exposure does not carry genuine equity rights, once triggering market panic.

In essence, these third-party issued tokenized stocks are more akin to synthetic assets tracking stock prices rather than true stock ownership. Some products may not include traditional stock rights such as voting rights or dividend rights. According to the current SEC proposal under discussion, if relevant platforms cannot provide corresponding rights protections for users, they may lose eligibility to list such token products.

The innovation exemption rule for tokenized stocks is also seen by outsiders as the first large-scale test by U.S. regulators of the feasibility of migrating stock trading to crypto infrastructure. Supporters argue that tokenized securities can enable near-instant settlement, 24/7 trading, and lower global access barriers, thereby significantly improving capital market efficiency. However, opponents contend that such mechanisms could weaken KYC, anti-money laundering, and investor protection systems, and increase systemic market risk.

Amid the rising popularity of tokenized stocks, ARK researcher Lorenzo Valente warned that the widespread use of two-layer and three-layer SPV packaging structures in the market could become a core risk for the future development of tokenized stocks. He believes that Bullish's acquisition of Equiniti, and efforts by institutions like Securitize to bring real, compliant stock rights on-chain, are key to whether tokenized stocks can truly enter the institutional-grade market. In the future, a large number of packaged products may still appear in the market, including equity SPVs, debt notes, and other derivative structures. If underlying rights, transfer restrictions, and investor rights are unclear, tokenized stocks could degenerate into multi-layered speculative assets.