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Author: Nancy, PANews

In just over a year, the tokenized stock market has witnessed explosive growth, with daily trading volume climbing from zero to approaching $4 billion, repeatedly setting new volume records. Meanwhile, regulatory easing in the U.S. is expected to push this sector toward mainstream adoption.

Beyond direct tokenized equity, from Hyperliquid pioneering on-chain pricing of private companies through perpetual contracts, to Polymarket partnering with Nasdaq to launch prediction markets for private firms, valuation discovery and liquidity capture surrounding Pre-IPO assets are now unfolding comprehensively in the on-chain world.

Polymarket Partners With Nasdaq as Prediction Markets Enter Pre-IPO Arena for First Time

On May 19, Polymarket announced an exclusive partnership with Nasdaq, officially launching prediction markets tied to private company performance, marking the first time prediction markets have entered the private market space.

Under the partnership, users will be able to trade predictions around metrics such as company valuations, IPO timing, and secondary market trading activity, while Nasdaq Private Market will serve as the exclusive settlement data provider for related contracts, supplying official data used to determine outcomes.

Notably, this marks the first time Nasdaq Private Market has made some private market valuation data publicly available 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 speculation, sentiment expression, and expectation trading around these high-profile private companies. Previously, most star tech companies had already completed the bulk of their valuation growth before going public, yet ordinary users typically lacked channels to participate. 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 combined total valuation of over $5 trillion.

Of course, prediction markets can also provide real-time market pricing and sentiment feedback for these Pre-IPO assets, forming more dynamic valuation references and driving greater transparency in information flow and price discovery within private markets.

For Polymarket, this partnership drives business expansion while accelerating its transformation into mainstream financial infrastructure. Although competitor Kalshi has also launched prediction contracts related to private company IPOs, its settlements rely more on public information such as SEC filings and company announcements, carrying certain lags and room for interpretation. By contrast, Polymarket directly incorporates Nasdaq's authoritative data as a settlement basis, significantly enhancing market credibility and outcome objectivity.

More importantly, the launch of private market-related products helps Polymarket further expand its business into traditional finance, attracting more global users beyond its original segments of politics, sports, and crypto assets.

For Nasdaq, this partnership also carries strategic significance. By opening private company data to on-chain markets, 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 groups, expanding the influence and monetization potential of its data products. Moreover, with the rise of crypto platforms such as Hyperliquid, Nasdaq's proactive embrace of the on-chain financial ecosystem strengthens its resilience against emerging competition.

Early Price Discovery: Hyperliquid Challenges Wall Street's Pricing Power

Compared with prediction markets, Hyperliquid, the leading pre-IPO DEX, has begun to pry away the pricing power long held by Wall Street.

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

Recently, Hyperliquid has further extended its reach into the Pre-IPO arena, successively launching perpetual contracts for Cerebras (CBRS) and SpaceX (SPCX). Notably, before the company's official listing, the CBRS contract's on-chain price was anchored within 3% of Nasdaq's opening price, whereas traditional secondary platforms showed deviations of up to 35%. This means that Hyperliquid has, to some extent, pioneered on-chain price discovery for Pre-IPO assets, beginning to challenge the pricing dominance long held by traditional secondary markets, investment banks, and private trading.

Data shows that Hyperliquid's HIP-3 market has recorded approximately $17.58 billion in trading volume over the past seven days, with open interest of around $2.54 billion. To lower barriers to entry, Hyperliquid recently updated its HIP-3 documentation, gradually reducing the hard requirement of staking 500,000 HYPE tokens to deploy perpetual markets, with amounts exceeding the new threshold becoming unlockable. This is expected to attract more builders going forward, further driving the expansion of on-chain financial assets.

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

Facing regulatory uncertainty, Hyperliquid is also accelerating its compliance efforts. In addition to the Hyperliquid Foundation donating 1 million HYPE tokens to the lobbying organization Hyperliquid Policy Center, led by veteran crypto policy attorney Jake Chervinsky to drive regulatory engagement, Hyperliquid co-founder Jeff has personally traveled to Washington to engage in dialogue with policymakers, hoping to bring the on-chain derivatives market under the U.S. regulatory framework. Furthermore, Hyperliquid has hired veteran communications expert George Godsal as its spokesperson, emphasizing that all platform trades, liquidations, and funding rates are publicly verifiable, with transparency far exceeding that of traditional markets.

Going forward, as more Pre-IPO assets migrate to on-chain markets, the valuation systems and price discovery mechanisms monopolized by Wall Street are facing an accelerated frontal challenge from crypto-native markets.

Daily Trading Volume Hits New High as SEC Innovation Exemption May Be Released This Week

Tokenized stocks are rapidly moving from a crypto-native innovation toward mainstream adoption, with traditional exchange giants such as the NYSE and Nasdaq also beginning to actively position themselves in this sector.

Data from The Block shows that as of May 18, daily trading volume for tokenized stocks has hit a record high of $3.57 billion. The majority of this volume is concentrated on Binance and Hyperliquid, while platforms such as xStocks, Ondo, and Bitget continue to drive the expansion of the on-chain stock market.

Meanwhile, policy easing at the U.S. regulatory level is also expected to serve as a catalyst for further growth in the tokenized stock sector. According to a recent Bloomberg report, sources familiar with the matter revealed that the U.S. SEC may launch innovation exemption rules for tokenized stocks as early as this week, establishing a new regulatory framework for crypto versions of publicly listed company stocks.

Based on currently disclosed information, the SEC is inclined to allow third-party institutions to issue tokens tied to stock prices without official authorization from the listed companies, and to permit their trading on DeFi platforms. This means the tokenized stock market will gradually form a more open on-chain synthetic asset ecosystem.

Previously, controversies have repeatedly emerged in the market as some projects launched related tokens without company authorization. For example, Anthropic publicly warned that unauthorized tokenized stock exposure does not carry the effect of actual equity, once triggering market panic.

Essentially, such third-party issued tokenized stocks are closer to synthetic assets tracking stock prices rather than true stock ownership. Some products may not carry rights corresponding to traditional stocks, such as voting rights and dividend rights. According to the SEC's currently discussed proposal, if relevant platforms cannot provide users with corresponding rights protections, they may lose eligibility to list such token products.

The innovation exemption rules for tokenized stocks are also seen by outsiders as the first large-scale U.S. regulatory test of the feasibility of migrating stock trading to crypto infrastructure. Proponents argue that tokenized securities can achieve near-real-time settlement, 24/7 trading, and lower barriers to global circulation, thereby significantly improving capital market efficiency; opponents, however, argue that such mechanisms may weaken KYC, anti-money laundering, and investor protection systems, and increase systemic market risks.

As tokenized stocks gain popularity, ARK researcher Lorenzo Valente warned that the extensive use of two-tier and three-tier SPV wrapper structures in the current market may be becoming a core risk for the future development of tokenized stocks. He believes that Bullish's acquisition of Equiniti, and efforts by institutions such as Securitize to bring real, compliant stock rights on-chain, are key to whether tokenized stocks can truly enter the institutional-grade market. A large number of wrapped products may still emerge in future markets, including equity SPVs, debt notes, and other derivative structures. If underlying rights, transfer restrictions, and investor rights are unclear, tokenized stocks could devolve into multi-layered speculative assets.