Author: Nancy, PANews

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

In addition to directly tokenizing equity, from Hyperliquid pioneering on-chain pricing of unlisted companies through perpetual contracts to Polymarket partnering with Nasdaq to launch a prediction market for private companies, valuation discovery and liquidity capture for pre-IPO assets are also unfolding across the blockchain world.

Polymarket partners with Nasdaq to predict market entry into the pre-IPO track.

On May 19, Polymarket announced an exclusive partnership with Nasdaq to officially launch a prediction market that links to the performance of private companies, marking the first time that prediction markets have ventured into the private equity market.

According to the cooperation agreement, users will be able to make predictions based on indicators such as company valuation, IPO timing, and secondary market trading activity. Nasdaq Private Market will serve as the exclusive settlement data provider for the relevant contracts and will be responsible for providing official data for determining the results.

It's worth noting that this is the first time Nasdaq Private Markets has publicly released some private market valuation data for free. Previously, such data was typically only available to institutional clients and required a paid subscription.

The introduction of prediction markets allows more users to engage in price speculation, sentiment expression, and anticipated transactions around these popular private companies. Previously, most star tech companies typically completed their major valuation growth before going public, but ordinary users usually lacked access to participate. According to Nasdaq data, there are currently over 1,600 unicorn companies globally with a valuation exceeding $1 billion, including OpenAI, Anthropic, and SpaceX, with a total 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 greater transparency in information flow and price discovery in the private market.

For Polymarket, this partnership not only drives business expansion but also accelerates its transformation into mainstream financial infrastructure. While competitor Kalshi has also launched forecasting contracts related to private company IPOs, its settlements rely more heavily on publicly available information such as SEC filings and company announcements, which have a certain lag and room for interpretation. In contrast, Polymarket directly uses authoritative Nasdaq data as the basis for settlement, significantly enhancing market credibility and the objectivity of the results.

More importantly, the launch of private equity market-related products has helped Polymarket further expand its business into the traditional financial sector, attracting more global users, and no longer limiting itself to its original sectors such as politics, sports, and crypto assets.

For Nasdaq, this collaboration is also strategically significant. By opening up private enterprise data to the on-chain market, Nasdaq can not only capture valuation discovery and liquidity needs 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. Furthermore, with the rise of crypto platforms like Hyperliquid, Nasdaq's proactive embrace of the on-chain financial ecosystem strengthens its resilience against emerging competition.

Hyperliquid challenges Wall Street's pricing power through early price discovery.

Compared to prediction markets, Hyperliquid, the leader in Prep DEX, has begun to challenge the pricing power that Wall Street has long held.

Several months ago, Hyperliquid's HIP-3 market began bringing traditional financial assets such as silver, gold, and crude oil onto the blockchain, gradually becoming an important price discovery market during weekends and US stock market closures, attracting attention from the traditional financial sector. In April alone, the average daily trading volume of oil-related contracts on the Hyperliquid platform exceeded $700 million.

Recently, Hyperliquid has further expanded its reach into the pre-IPO market, launching perpetual contracts for Cerebras (CBRS) and SpaceX (SPCX). Notably, the CBRS contract's on-chain price was already pegged to within 3% of the Nasdaq opening price before the company's official IPO, compared to a 35% deviation on traditional secondary market platforms. This means that Hyperliquid has, to some extent, taken the lead in on-chain price discovery for pre-IPO assets, beginning to challenge the pricing power long dominated by traditional secondary markets, investment banks, and private equity transactions.

Data shows that the Hyperliquid HIP-3 market saw a trading volume of approximately $17.58 billion over the past seven days, with open interest of approximately $2.54 billion. To lower the entry barrier, Hyperliquid recently updated its HIP-3 documentation, gradually reducing the hard requirement of 500,000 HYPE tokens for deploying the perpetual market. Any amount exceeding the new threshold can be unlocked, which is expected to attract more builders and further drive 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 is rising on Wall Street. Recently, the CME Group and the NYSE have urged U.S. regulators to strengthen their scrutiny of Hyperliquid, citing concerns such as potential market manipulation risks and sanctions circumvention.

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

In the future, as more and more pre-IPO assets migrate to the on-chain market, the valuation system and price discovery mechanism monopolized by Wall Street are facing a direct challenge from the native crypto market.

Record daily trading volume; SEC innovation exemption may be released this week.

Tokenized stocks are rapidly moving from crypto-native innovation to mainstream adoption, and traditional exchange giants such as the NYSE and Nasdaq have begun to actively invest in this sector.

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

Meanwhile, the easing of regulatory restrictions in the United States is also expected to catalyze 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 introduce innovative exemption rules for tokenized stocks as early as this week, establishing a new regulatory framework for crypto versions of publicly traded stocks .

Based on currently disclosed information, the SEC tends to allow third-party institutions to issue stock-linked tokens without official authorization from listed companies and permits these tokens to be traded on DeFi platforms. This means that the tokenized stock market will gradually develop into a more open on-chain synthetic asset ecosystem.

Previously, disputes have arisen in the market due to some projects launching tokens without company authorization. For example, Anthropic publicly warned that unauthorized tokenized equity exposure does not have the effect of real equity, which triggered market panic.

In essence, these third-party issued tokenized stocks are closer to synthetic assets that track stock prices than true stock ownership. Some products may not offer the voting rights, dividend rights, and other benefits associated with traditional stocks. Furthermore, according to the current proposals under discussion by the SEC, platforms that cannot provide users with corresponding rights protections may lose their eligibility to list related token products.

The innovative exemption rules for tokenized stocks are also seen as the first large-scale test by US regulators of the feasibility of migrating stock trading to crypto infrastructure. Supporters 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; however, opponents believe that the related mechanisms may weaken KYC, anti-money laundering, and investor protection systems, and increase systemic market risks.

Amid the rise of tokenized stocks, ARK researcher Lorenzo Valente warns that the prevalent two- and three-tier SPV packaging structures may be a core hidden danger for the future development of tokenized stocks. He believes that Bullish's acquisition of Equiniti and the efforts of institutions like Securitize to bring real, compliant equity rights onto the blockchain are key to whether tokenized stocks can truly enter the institutional market. In the future, the market may still see a large number of packaged products, including equity SPVs, debt securities, and other derivative structures. If the underlying equity, transfer restrictions, and investor rights are unclear, tokenized stocks may become multi-layered speculative assets.

BNY Mellon explores tokenized deposits and blockchain payments

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