IOSG: The First Real-World Test of Three Perpetual Mechanisms on the Day of SpaceX's IPO

Original Author: Mario Chow

Original Source: IOSG Ventures

TL;DR

1. Why does Pre-IPO perpetual matter? It pries open two doors that were previously closed to almost everyone: firstly, placing directional bets on private companies like SpaceX or OpenAI *before* their IPO; and secondly, getting a real-time price during nights, weekends, and pre-market hours when markets are closed but news is still moving prices. Now, anyone with a wallet can place this bet continuously, permissionlessly, just in time for the biggest wave of IPOs in history.
2. Without a public spot price, how does the market price something? This is the core challenge for the entire asset class. Without an external price to copy (which, when available, can be stale for months), exchanges must use their only tool—their own order book—to generate a price, and only move it when real money is willing to trade away from it: moving slowly, and expensively enough that it cannot be faked. trade.xyz uses an internal oracle with a price collar, while Ventuals partially relies on primary market data. Surprisingly, this works: the perpetual predicted Cerebras's opening price within 1.3%, and priced crude oil over a weekend when traditional venues were entirely dark.
3. What worked in the SpaceX case? trade.xyz captured the on-chain market (~96.5% of volume), not because its oracle was smarter, but because near-zero funding fees made holding the position nearly costless, it launched *pacing* the IPO catalyst, and being denominated per-share allowed cross-exchange arbitrage. The transition from synthetic perpetual to tracking spot on listing day (June 12) was clean: no oracle gap, no liquidation cascade. On listing day, the perp tracked Nasdaq's real-time price within 1% (~$152 vs $150 match price); its pre-market mark price also perfectly shadowed Nasdaq's own indicative opening price (~$175), with the final match price clearing lower at $150.
4. What unresolved risks remain? This asset class is excellent at handling prices but still primitive at handling events. Corporate actions, especially a reverse stock split after conversion, have no pipeline on-chain: trade.xyz hasn't published any rebase mechanism, while Ventuals outsources this to a single data provider, which already failed once (an expired split adjustment caused its market to flash crash 45%). The bottleneck isn't price discovery; it's the boring "corporate actions" layer. Traditional markets took a century to standardize it; on-chain, no one has rebuilt it yet. Whoever can reliably deliver it will fill the last gap between these markets and the ones they aim to replace.

Background: Two Locked Doors Just Kicked Open by Crypto

Pre-IPO perpetual contracts sit at the intersection of two things that, until recently, were almost entirely locked to everyone. Crypto's rails have now pried both doors open.

The First Door: Pre-IPO Exposure, Finally Open to Retail

Shares of SpaceX or OpenAI before their IPO were only accessible to accredited investors, VCs, and a few secondary desks. Valuations were opaque, resetting only with each funding round. Pre-IPO perpetual contracts tear down this wall. Anyone with a wallet can bet on which way a private company's valuation will move, anytime, permissionlessly, without touching any shares, allocations, or voting rights. The timing is impeccable, coinciding with the biggest wave of IPOs in history. SpaceX listed on Nasdaq on June 12 at ~$1.77T valuation, with OpenAI and Anthropic expected to follow. For the first time, retail could position themselves before the opening bell, rather than chasing the price post-IPO.

The Second Door: After-Hours Trading, Now Captured by Crypto

Traditional exchanges still operate on "banker's hours." Stocks and futures halt overnight, on weekends, and during holidays. When news breaks after hours, there's nowhere to hedge real risk exposure. Crypto never closes. This time gap cedes the entire after-hours window to them, and most price discovery now happens on Hyperliquid.

A key premise of this report: the after-hours quote isn't a guess; it often lands exactly where the real market will reopen. One Saturday, a Middle East conflict pushed oil prices higher; the only market trading was Hyperliquid. When CME crude oil futures reopened Sunday evening, the price was exactly what Hyperliquid's perpetual had already found. TD Securities estimates that before traditional exchanges even opened, this platform had already digested about 80% of the recent oil price move. The same applies to stocks: trade.xyz's Cerebras perpetual tracked Nasdaq's final opening price within ~1.3%. After hours, the perpetual itself is the market.

How Early Are We: Only ~1% of TradFi Perpetual Volume

CoinDesk data shows how nascent this market is. On Binance and similar platforms' TradFi perpetuals, commodities and equities dominate. Pre-IPO is just a thin strip at the top of the stacked chart, accounting for just over 1% of total TradFi perpetual volume since its launch around May 21.

On Binance, Pre-IPO volume is also highly concentrated in specific names: SpaceX accounts for ~79%, OpenAI 11%, and Anthropic 9%. This asset class launched around May 20, and Binance quickly captured over 60% of the share. Pre-IPO on CEXs is still in its infancy, dominated by SpaceX. The truly interesting activity is on-chain.

SPCX Market Landscape: Binance Leads, Hyperliquid Remains On-Chain Home

Market Snapshot on June 10

Focusing on SpaceX itself, it is currently the entire Pre-IPO market. In this snapshot from June 10, total 24-hour volume for SPCX perpetual across all venues was ~$323M. Binance leads with $166M (51%), Hyperliquid is solidly second with $69M (21%), OKX follows with $61M (19%), then MEXC and a handful of smaller venues.

On-Chain Landscape: A Market with Only One Builder

Comparing Trade.xyz vs Ventuals by Volume: 96.5% vs 3.5%

Trade.xyz's cumulative volume is ~$658M, with SPCX at $552M and the second listing QNT at $106M, all concentrated in about three weeks. Ventuals' cumulative volume is ~$152M, spread more evenly across SPACEX ($53M), OPENAI ($43M), and ANTHROPIC ($56M), over approximately seven months.

Placing them on the same timeline shows the gap clearly. Within the overlapping window after SPCX launched, trade.xyz accounted for ~96.5% of on-chain Pre-IPO volume, corroborated by third-party trackers stating it makes up "~95% of the Hyperliquid Pre-IPO basket." Ventuals lists more tickers, including the currently only live Anthropic and OpenAI contracts, but captures only a tiny fraction of the flow. Listing tokens isn't a moat; liquidity is.

HIP-3: The Platform Layer Underpinning It All

HIP-3 is an upgrade to Hyperliquid, transforming the single perpetual venue into a platform for builders to deploy their own perpetual DEXs. Any team staking 500,000 HYPE tokens can deploy their own perpetual market on Hyperliquid's matching engine, HyperCore. Builders control listings, oracles, leverage caps, and contract parameters; HyperCore controls execution, funding rates, liquidations, and margin. Trade.xyz is an HIP-3 deployment focused on traditional assets: turning stocks, indices, and commodities into 24/7 perpetual contracts, margined and settled in USDC, supporting only isolated margin.

How Trade.xyz Prices a Market Without an External True Price

Let's start with the problem, because only by feeling its difficulty does the design make sense. A normal perpetual copies a live spot price from an exchange. A Pre-IPO perpetual has no spot price to copy, and might not have one for months. So the exchange must use its only tool, its own order book, to generate a credible price, and make it expensive to move arbitrarily. Everything in this section answers one question: How do you price an asset when it doesn't have one yet?

Two Oracle Mechanisms for After-Hours Equity Perpetuals

To understand Pre-IPO perpetuals, first understand after-hours equity perpetuals. Crypto perpetuals have real-time external prices 24/7; equities don't. AAPL only has a real market price during US trading hours. So the oracle feeding the funding rate and mark price needs two mechanisms: one when external data is available, another when it isn't. When the external market is open, a relayer directly inputs the institutional fair value (data sources include Pyth) as the oracle. When the market is closed, the oracle must continue based solely on the perpetual's own order book. This is where the design truly shines.

Internal Oracle: Three Core Ideas

Identify where the executable order book actually resides.

The relayer calculates the average execution price of pushing a fixed $1,000 order into each side of the order book, deriving an executable bid price and an executable ask price. If the current oracle price falls within this range, nothing happens—the order book and oracle align, and the oracle stays put. Only when the oracle price falls outside this range, meaning real resting depth is willing to trade at a deviating price, does the oracle get pushed towards the order book. Heavy bids pull it up; heavy asks push it down; noise within the range is completely ignored. To move this oracle, you must commit genuine liquidity, not just trade a few small lots.

The oracle never jumps.

It drifts slowly towards the order book with a thirty-minute time constant, and a hard cap ensures each update can converge at most ~9.5% of the remaining distance, regardless of the time since the last update. Halts and irregular updates cannot cause it to gap.

The mark price is the median.

The mark price, which drives margin and liquidations, is the median of three candidates: the oracle itself, the oracle plus a short-term moving average of the perpetual's basis, and the order book snapshot (best bid, best ask, last traded price). The median structure ensures that fast variables alone can never drag the mark price too far from the slow oracle. The hourly funding rate further pushes the market towards the oracle, with standard multipliers and caps ensuring any single hour's payment is small.

Pre-IPO Perpetual: Same Engine, Three Modifications

An IPOP (Pre-IPO Perpetual) is essentially an after-hours equity perpetual that never gets a "Friday close" to rely on. Before listing, there is no external price at all, so the market must run its internal pricing mechanism continuously, sometimes for months. Trade.xyz makes three modifications for this, each revealing the core of the problem.

1. Funding Rate Slashed to 1% of Standard. Weekend perpetuals can drift at most two days and are corrected by Monday's open, so normal funding rates are tolerable. An IPOP might trade for over sixty days without any anchor, and markets tend to settle on persistent premiums or discounts reflecting pure sentiment. At standard rates, anyone holding against the prevailing sentiment would be bled dry by funding fees long before the IPO. Cutting the multiplier to nearly zero is what makes this contract truly holdable. Our view: more than any oracle cleverness, this single parameter made trade.xyz's product tradeable, a point confirmed by the funding rate data later in this report.
2. Initial Seed Price. Weekend markets initialize with the last real external price. An IPOP has no history, so trade.xyz sets an initial reference price. It's not a prediction, just a mathematical starting point. For SPCX (launched late UTC on May 17), the reference price was $150 per share: the midpoint of SpaceX's publicly reported $1.75T-$2T target valuation, divided by an assumed 11.87 billion fully diluted shares.
3. Discovery Bound. A price collar around the reference price that the mark price cannot exceed, paired with a rule that positions with a liquidation price outside the current collar will not be liquidated while the collar is active.

For SPCX with 5x leverage, the collar width is ±20% from the reference. A static collar either freezes the price or becomes irrelevant, so this collar is staircased: when the slow oracle climbs to 90% of the upper bound, the reference price re-anchors to that upper bound, and a new 20% collar opens around it.

SPCX has seven such steps in each direction. Compounding them, the contract's hard lifetime range from the $150 seed price is approximately $25 to $645 per share.

How Much Does It Cost to Manipulate This Market: Expensive, Obvious, Slow

This division of labor is crucial for anyone trying to manipulate. The mark price reacts fast but has a hard ceiling; a single pump can almost instantly hit the ceiling and freeze there.

The oracle is the slow average over thirty minutes; it's the gatekeeper. Only when the oracle touches the 90% trigger line does the step move up. To push the price up one step, an attacker would have to support the entire order book higher for nearly an hour while facing arbitrageurs, then repeat for the next step. Expensive, obvious, and slow—that's the design intent, and so far, it has held up solidly.

Two Builders: Trade.xyz vs Ventuals

Ventuals: Partial Trust in External Data

Pre-IPO perpetuals on Hyperliquid come from two HIP-3 builders that answer the same question from opposite directions. Trade.xyz trusts its own order book; Ventuals partially trusts external data. Ventuals prices valuation rather than share price: a SPACEX price of 1,989 implies a market-implied company valuation of $1.989T. Its oracle is a weighted blend: one-third from an external valuation estimate by Notice.co, and two-thirds from a two-hour moving average of Ventuals' own mark price.

Notice aggregates secondary trades, bid/ask quotes, funding announcements, mutual fund valuations, 409A valuations, and public comparable company data, polling at least every minute. The deliberately set one-third weight is Ventuals' answer to the "IPO pop problem": anchoring to primary market reality while leaving mathematical room for the market to price upside. And don't miss this: two-thirds of this oracle is Ventuals' own market—this design is far more self-referential than its marketing suggests.

Its anti-manipulation mechanism is built on the price path, not in a range staircase. Orders cannot deviate more than 20% from the oracle, enforced by the matching engine. The mark price updates every three seconds, with a maximum change of 1% per update. Once the short-term impact price deviates more than 2% from its one-minute average, the mark price's update coefficient immediately drops to zero, so sudden volatility must persist for the mark price to follow. Funding rates are dynamic: ~15% annualized when the market is close to the oracle, rising exponentially with divergence, approaching ~1% per hour near the collar edge.

The endgame design is also completely different. Upon listing, Ventuals markets settle and halt: funding rates go to zero,