More accurate than brokerages? TradeXYZ prices ChangXin Technology ahead of its listing

Original | Odaily Planet Daily (@OdailyChina)

Author | Golem (@web3_golem)

On July 27, CXMT, a leading domestic memory chip manufacturer, debuted on the A-share STAR Market, setting multiple A-share records on its first trading day. CXMT became the first tech stock in A-share history to exceed a market cap of 3 trillion RMB at the open (with an opening market cap of 3.31 trillion RMB) and the first stock to achieve a trading volume exceeding 100 billion RMB within the first hour of listing. CXMT closed its first day up 465.82%, with a total market capitalization of 3.28 trillion USD, ranking first in the A-share market and surpassing Intel's market cap on the US stock market.

Another notable takeaway is that CXMT's listing confirmed TradeXYZ's "dominance" in pricing the A-share market.

As the first individual stock pre-market contract listed on TradeXYZ for the A-share market, CXMT opened at 49.5 RMB on the A-share market. Based on the current USD/CNY exchange rate of 6.77, this is approximately 7.31 USD. At the same time, the CXMT contract (CXMT) on TradeXYZ was quoted at 7.12 USD, a discrepancy of less than 0.2 USD.

TradeXYZ Successfully "Pre-Priced" CXMT's IPO

As a hot tech stock, most domestic brokerages and institutions believed that a valuation between 2 trillion and 3 trillion RMB on the first trading day was reasonable for CXMT. Expectations above 3 trillion USD already fully factored in a "domestic scarcity premium" and future performance assumptions; a valuation of 4 trillion RMB was only seen under extremely optimistic scenarios.

However, it turned out that the reports from domestic brokerages and institutions were too conservative. In contrast, the overseas platform TradeXYZ provided a more accurate price discovery for CXMT.

On July 15, TradeXYZ launched the CXMT pre-market perpetual contract on Hyperliquid's HIP-3 market, supporting up to 5x leverage. Within hours of listing, buy orders for millions of USD worth of CXMT appeared at the $6 level on the Hyperliquid order book, driving the price up to a high of $8.64 that day. Based on the pre-market price at that time, CXMT's market cap exceeded $550 billion, or over 3.72 trillion RMB, surpassing even Tencent to rank 32nd globally in market capitalization.

TradeXYZ's CXMT contract price reached a high of $8.64 on its first day

As the first individual stock contract for the A-share market listed on TradeXYZ, it provided risk exposure for investors who were not eligible to participate in the CXMT IPO subscription and trading. Therefore, some initial exuberance in pricing CXMT on the first day also inflated the pre-market contract price.

The market quickly returned to rationality. On the eve of CXMT's listing on July 27, the CXMT pre-market contract price showed an overall correction trend, ultimately stabilizing around $6.1-6.4 (approximately 41-43 RMB) on July 26, with its market valuation still hovering around 3 trillion RMB.

On July 27, CXMT's opening market cap of 3.31 trillion RMB did not deviate significantly from its valuation during the Pre-IPO phase on TradeXYZ. During the call auction period before CXMT's opening, the CXMT pre-market contract price on TradeXYZ further converged towards CXMT's auction price on the A-share market. Ultimately, when the A-share market opened at 9:30 AM, the CXMT pre-market contract price was $7.12, with a difference of less than $0.2 from CXMT's A-share spot opening price.

This also left investors hoping to arbitrage CXMT between the on-chain market and traditional financial markets empty-handed. Well-known crypto KOL Jiang Zhuo'er posted that CXMT was "no fun anymore," because there was virtually no difference between the price during CXMT's call auction and the price on TradeXYZ. "Currently, you can neither buy in nor arbitrage."

Therefore, TradeXYZ's price discovery for the CXMT IPO was extremely successful. This means TradeXYZ's price discovery mechanism is becoming increasingly robust and is further eroding traditional finance's pricing power over corporate IPOs in the global market.

Trading at a Discount After the Open

However, after the market opened, as the CXMT contract was converted to a standard XYZ perpetual contract supporting up to 10x leverage, the discrepancy between the mark price of the CXMT contract on TradeXYZ and the CXMT A-share spot price widened. The CXMT contract on TradeXYZ traded at a discount compared to the CXMT A-share spot.

This is actually related to TradeXYZ's oracle mechanism. During the Pre-IPO phase, because there was no external real price, the CXMT contract price was determined by TradeXYZ's internal oracle. After CXMT officially listed, the CXMT contract price gradually switched to tracking an external oracle reflecting the A-share spot trading price. Therefore, the discrepancy between the CXMT contract's mark price and the external oracle price essentially arose from this mechanism.

After the open, the CXMT contract mark price diverged from the oracle price, with the gap widening to $0.4 at one point.

The reason for this discrepancy is that TradeXYZ implemented a gradual convergence limit during the transition period when the contract price switches from tracking the internal oracle to tracking the external oracle. This means the contract mark price is restricted from moving slowly towards the target price at a controlled speed. The oracle price updates approximately every 3 seconds, but each change is limited to ±1%, causing the contract mark price to only gradually converge to the target. Consequently, this restriction results in the CXMT contract mark price trading at a discount while catching up to the external oracle.

However, when the A-share market is closed, the CXMT contract price switches back to being determined by the internal oracle, effectively entering a "pre-market" trading phase.

Although CXMT is not the first individual stock Pre-IPO contract listed on TradeXYZ—which has previously excelled in price discovery for US stock IPOs like Cerebras and SpaceX—pricing CXMT was an important test for TradeXYZ's contract pricing mechanism, funding rates, and liquidity performance. Notably, the oracle also needed to incorporate a USD/CNY exchange rate conversion on top of the underlying tracking quotes, meaning holders' P&L needed to reflect both stock price and exchange rate fluctuations.

In the end, aside from the brief episode of discounted trading caused by the oracle convergence, TradeXYZ's transition for CXMT from a pre-market contract to a standard contract was relatively smooth, avoiding the public controversy that occurred during the SpaceX listing (Related reading: Hyperliquid Pre-Market Contract Controversy: What Happened to the Promised SpaceX Equity Count?).

As of press time, the open interest for Hyperliquid's CXMT contract was $91.85 million, reaching a peak of $100 million, with a 24-hour trading volume of $232 million, representing about 0.16% of CXMT's A-share spot trading volume on its first day.

Hyperliquid CXMT contract OI and trading volume

However, judging TradeXYZ's value solely by trading volume would be a gross underestimation of its significance. The billions of dollars in trading volume on TradeXYZ still represent only a fraction of traditional stock exchanges; its liquidity position poses little threat. What it truly changes is the barrier and method for participating in price discovery for stocks like CXMT.

For global investors, TradeXYZ provides a new channel to gain exposure to the A-share market price without needing to enter the A-share market itself. Previously, ordinary investors faced significant barriers to participating in the A-share STAR Market, and overseas investors found it even more difficult to directly obtain A-share risk exposure.

On TradeXYZ, without needing a securities account, asset thresholds, or geographical restrictions, any wallet user holding stablecoins can gain risk exposure to trade CXMT, unaffected by traditional financial market closure. Even at this moment, the on-chain price discovery for CXMT continues.

CXMT's Largest On-Chain Short Position Floating Loss Exceeds $1.4 Million

On CXMT's listing day, bearish on-chain whales suffered significant losses, with the most representative being "CXMT's largest short seller."

Before CXMT's listing, the "largest CXMT short seller" (0xf2...1244) on Hyperliquid had been increasing short positions in CXMT for several days. According to hypurrscan data, this address currently holds 2.6 million CXMT short positions, valued at approximately $18 million, with an average entry price of $6.4 (approx. 43.3 RMB). As of press time, it had an unrealized loss of $1.39 million.

Hyperliquid's largest CXMT short position

Notably, one hour before CXMT's listing today, this entity placed closing orders for the short positions at prices between $2 and $4.5 (approximately 13~30 RMB). This suggests the entity believes CXMT's fair valuation is capped at 2 trillion RMB.

Conversely, some on-chain whales who went long on CXMT during the pre-market phase reaped substantial profits. Address 0x2b6…32f6c began accumulating long CXMT positions as early as July 23. According to hypurrscan data, this address currently holds 977,000 CXMT long positions, valued at approximately $6.77 million, with an average entry price of $6.71 (approx. 45 RMB). As of press time, it has an unrealized profit exceeding $200,000. This whale also holds long SK Hynix positions valued at $380,000.

Furthermore, this whale placed closing orders for the long positions at prices between $7.1693 and $7.688, indicating a belief that CXMT's market cap could still challenge the 3.4 trillion RMB level again (its intraday high was over 3.5 trillion RMB).

Looking at the divergence between bulls and bears from a geographical perspective, according to HyperInsight monitoring, on the eve of CXMT's listing, attributable CXMT wallets on Hyperliquid showed that wallets labeled as US, Hong Kong, and Mainland China were predominantly net long, while wallets labeled as South Korea became the primary shorting force in this sample. Specifically, South Korean wallets held short positions worth approximately $760,000, nearly 38 times the size of their long positions; wallets labeled as Taiwan were also net short, with a net short position of about $329,000.

On the long side, US-labeled wallets held $1.6 million in long positions and $345,000 in short positions, resulting in a net long of approximately $1.255 million; Hong Kong-labeled wallets held $1.3 million in long positions and $431,000 in short positions, resulting in a net long of about $869,000; Mainland China-labeled wallets held only $83,000 in long positions and $16,000 in short positions, resulting in a net long of about $67,000.

Assuming the $760,000 short position from South Korean wallets was opened before the market open at a uniform price of $6.48 with no subsequent adjustment, and all positions were 1x leverage, the theoretical floating loss on the short position would be approximately $48,500, a loss rate of about 6.4%.