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Author: Nancy, PANews

In just over a year, the tokenized stock market has experienced explosive growth, with daily trading volume rising from zero to nearly $4 billion, continuously setting new records. Regulatory relaxation in the US is also expected to drive this sector toward mainstream adoption.

Beyond direct tokenized equity, initiatives like Hyperliquid's pioneering on-chain pricing of unlisted companies through perpetual contracts, and Polymarket's collaboration with Nasdaq to launch a prediction market for private companies, are also fully unfolding in the on-chain world, focusing on valuation discovery and liquidity capture for Pre-IPO assets.

Polymarket partners with Nasdaq, entering the Pre-IPO market with prediction markets

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

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

Notably, this marks the first time Nasdaq Private Market has freely published some private market valuation data. In the past, such data was typically available only to institutional clients and required paid subscriptions.

The introduction of prediction markets allows more users to engage in price speculation, emotional expression, and expectation trading around these hot private companies. Before this, most star tech companies had already completed major valuation growth before their IPOs, but ordinary users usually lacked participation channels. According to Nasdaq data, there are currently over 1,600 unicorns globally with valuations exceeding $1 billion, including OpenAI, Anthropic, and SpaceX, with a combined valuation exceeding $5 trillion.

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

For Polymarket, this collaboration not only drives business expansion but also accelerates its transition toward mainstream financial infrastructure. Although competitor Kalshi has also launched prediction contracts related to private company IPOs, its settlement relies more on SEC documents and company announcements, which have certain delays and interpretation spaces. 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 helps Polymarket expand its business into traditional finance, attracting more global users rather than remaining limited to political, sports, and crypto asset sectors.

For Nasdaq, this collaboration also holds strategic significance. By opening up private company data to on-chain markets, Nasdaq not only captures valuation discovery and liquidity demands in the Pre-IPO market but also extends its data capabilities to global retail and crypto user groups, expanding the influence and monetization potential of its data products. Moreover, by proactively embracing the on-chain financial ecosystem amid the rise of crypto platforms like Hyperliquid, Nasdaq enhances its resilience against emerging competition.

Early price discovery, Hyperliquid challenges Wall Street's pricing power

Compared to prediction markets, Hyperliquid, the leading Prep DEX, has already begun challenging Wall Street's long-held pricing power.

Months ago, Hyperliquid's HIP-3 market began moving traditional financial assets like silver, gold, and crude oil onto the blockchain, gradually becoming an important price discovery market during weekends and US stock market holidays, drawing attention from the traditional finance sector. In April alone, daily trading volume for oil-related contracts on the Hyperliquid platform exceeded $700 million.

Recently, Hyperliquid has further expanded into the Pre-IPO sector, launching perpetual contracts for Cerebras (CBRS) and SpaceX (SPCX). The CBRS contract's on-chain price was already pegged within 3% of Nasdaq's opening price before the company's official IPO, while traditional secondary platforms showed a 35% deviation. This means Hyperliquid has, to some extent, completed on-chain price discovery for Pre-IPO assets, beginning to challenge the pricing authority long dominated by traditional secondary markets, investment banks, and private equity transactions.

According to data, the 7-day trading volume of Hyperliquid HIP-3 market reached approximately $17.58 billion, with open interest of about $2.54 billion. To lower entry barriers, Hyperliquid recently updated HIP-3 documentation, gradually reducing the mandatory 500,000 HYPE staking requirement for deploying perpetual markets. Excess amounts above the new threshold will be unlocked, attracting more builders to join in the future and 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 is also intensifying. Recently, the CME and NYSE have urged US regulators to intensify scrutiny of Hyperliquid, citing concerns about potential market manipulation and sanctions evasion.

Faced with regulatory uncertainty, Hyperliquid is accelerating its compliance efforts. In addition to the Hyperliquid Foundation donating 1 million HYPE tokens to the Hyperliquid Policy Center, a lobbying organization led by veteran crypto policy lawyer Jake Chervinsky to promote regulatory communication, Hyperliquid co-founder Jeff has personally traveled to Washington to engage in dialogue with regulators, aiming to push the on-chain derivatives market into the US regulatory framework. Additionally, Hyperliquid has hired veteran PR expert George Godsal as its external spokesperson, emphasizing that all platform transactions, liquidations, and funding rates are publicly verifiable, with transparency far exceeding traditional markets.

As more Pre-IPO assets migrate to on-chain markets, the valuation system and price discovery mechanisms long monopolized by Wall Street are accelerating their confrontation with the crypto-native market.

New daily trading high, SEC innovation exemption may be announced this week

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

According to The Block data, as of May 18, daily trading volume for tokenized stocks reached a new historical high of $3.57 billion. Most of this trading volume is concentrated on Binance and Hyperliquid, while platforms like xStocks, Ondo, and Bitget continue to drive the expansion of the on-chain stock market.

Meanwhile, policy relaxation from the US regulatory side is also expected to become a catalyst for further growth in the tokenized stock sector. According to a recent Bloomberg report, sources revealed that the US SEC may introduce an innovation exemption rule for tokenized stocks as early as this week, establishing a new regulatory framework for crypto versions of listed company stocks.

According to currently disclosed information, the SEC favors allowing third-party institutions to issue tokens linked to stock prices without official authorization from listed companies, and to trade them 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 repeatedly faced controversies. For example, Anthropic once publicly warned that unauthorized tokenized stock exposure does not have real equity effectiveness, triggering market panic.

Essentially, these third-party issued tokenized stocks are closer to synthetic assets tracking stock prices rather than true stock ownership. Some products may not have traditional stock-related rights such as voting and dividend rights. According to the current SEC discussion plan, if relevant platforms cannot provide corresponding rights protection for users, they may lose the qualification to list related token products.

The innovation exemption rule for tokenized stocks is seen by the outside world as the US regulator's first large-scale test of the feasibility of migrating stock trading to crypto infrastructure. Supporters argue that tokenized securities can achieve near-real-time settlement, 7×24-hour trading, and lower global circulation barriers, significantly improving capital market efficiency; however, opponents argue that such mechanisms may weaken KYC, anti-money laundering, and investor protection systems, increasing systemic market risks.

In response to the popularity of tokenized stocks, ARK researcher Lorenzo Valente warned that the current widespread use of layer-2 and layer-3 SPV packaging structures may become a core risk for the future development of tokenized stocks. He believes that Bullish's acquisition of Equiniti, as well as institutions like Securitize pushing for real, compliant stock equity on-chain, are key to whether tokenized stocks can truly enter the institutional market. In the future, there may still be many packaged products, including equity SPVs, debt instruments, and other derivative structures. If the underlying equity, transfer restrictions, and investor rights are unclear, tokenized stocks may become speculative assets wrapped in multiple layers.