On Hyperliquid, CXMT's "stock price" surged to $8.64. How was this price determined pre-IPO?
TechFlow Selected TechFlow Selected
On Hyperliquid, CXMT's "stock price" surged to $8.64. How was this price determined pre-IPO?
Only by understanding this mechanism can you grasp what Pre-IPO contracts are actually trading.
Navigating Web3 tides with focused insightsEditor: Wu Blockchain
TL;DR
● Not Stock: CXMT is a Pre-IPO Perpetual Contract deployed by Trade.xyz via HIP-3, tracking the expected USD value of one A-share of CXMT, offering no stock ownership, IPO allocation, dividends, or voting rights.
● Order Book Driven Price: Trade.xyz artificially sets a $5 initial reference price; thereafter, the actual transaction price is mainly determined by buy/sell supply and demand in the Hyperliquid on-chain order book. Since there is no tradable spot market before listing, the contract price does not need to be close to the 8.66 RMB IPO issue price.
● Multiple Mechanisms Control Volatility: The internal oracle updates smoothly based on the order book impact price using a 30-minute EWMA; the Mark Price combines the oracle, a 150-second price deviation EMA, and bid/ask data, used for calculating P&L and liquidation.
● Price Guards Can Move Dynamically: CXMT's single-tier Discovery Bound is 20%, allowing up to 7 re-anchoring attempts upward and downward respectively; thus, the price sequentially touched $6, $7.2, and $8.64, rather than being permanently limited to ±20% of $5.
● Switch to External Price After Listing: After CXMT lists and generates sufficient market data, the contract is expected to convert to a standard stock perpetual, with the oracle changing to A-share RMB price converted to USD. Price differences before and after conversion may cause P&L jumps or even trigger liquidation.
CXMT has not officially listed on the STAR Market, yet a "stock price" tradable 24/7 has already appeared on Hyperliquid.
On July 14, Trade.xyz launched the CXMT Pre-IPO Perpetual Contract via Hyperliquid's HIP-3 framework, with the code xyz:CXMT. The contract uses $5 as the initial reference price, supports up to 5x leverage, and settles in USDC.
After the contract went live, the price sequentially touched $6, $7.2, and $8.64. As of July 16, 02:13 UTC, Hyperliquid on-chain data shows CXMT's Mark Price was approximately $7.37, 24-hour trading volume was about $50.56 million, and open interest nominal value was about $23.07 million.
Meanwhile, CXMT has determined the A-share issue price at 8.66 RMB per share, with an issue valuation of 579.18 billion RMB, expected to list on July 27. Converted at an RMB to USD exchange rate of approximately 6.77, the $7.37 contract price on Hyperliquid equals about 49.9 RMB, approximately 5.76 times the issue price; calculated based on approximately 66.88 billion shares after issuance, this corresponds to an implied market cap of about 3.34 trillion RMB. Reuters reports show that some investors' expectations for CXMT's valuation after listing are concentrated between 3 trillion and 5 trillion.
But the $7.37 here is not CXMT's real stock price, nor is it a valuation read by Trade.xyz from some primary market database. It is a derivative price generated jointly by the order book, internal oracle, Mark Price, funding rate, and price guards.
This Is a Contract on Future Stock Price
According to Trade.xyz's official definition, Pre-IPO Perpetual, abbreviated as IPOP, is a cash-settled linear perpetual contract used to trade market expectations of a company's public equity value after listing.
The CXMT contract specifically tracks the USD value of one ordinary A-share of CXMT, not the company's total market cap. After listing, the oracle will convert CXMT's RMB stock price to USD according to the exchange rate at that time.
Holding CXMT contracts does not mean holding CXMT stock. Traders will not receive IPO allocations, dividends, or voting rights, nor can they convert contracts into real stock after listing. Long and short parties are merely trading judgments on CXMT's future public market price.
Therefore, what is traded on Hyperliquid is not "how much CXMT is worth now," but "how much traders participating in this contract believe one share of CXMT might be worth after listing."
Hyperliquid Provides the Trading System, Trade.xyz Sets Market Rules
CXMT was not launched directly by the Hyperliquid core team, but deployed by Trade.xyz via HIP-3.
HIP-3 allows third-party developers to establish their own perpetual contract markets on HyperCore. HyperCore is responsible for the on-chain order book, matching, margin, liquidation, and settlement; the deployer is responsible for determining the underlying asset, oracle method, leverage cap, risk parameters, and executing conversion or settlement when necessary.
In other words, this system has a two-layer division of labor:
Component Responsible Party Function Limit Order & Matching HyperCore Determines actual transaction price for traders Initial Reference Price & Contract Parameters Trade.xyz Defines where the market starts and how it can operate Internal Oracle & Part of Mark Price Input Trade.xyz Relayer Converts order book information into funding rate and liquidation reference price Margin & Liquidation Execution HyperCore Manages position risk based on Mark Price
Therefore, although it uses a fully on-chain order book for trading and settlement, the pricing method and oracle updates still rely on Trade.xyz's market design and Relayer.
The First $5 Was Not Discovered by the Market
Any price discovery needs a starting point.
According to CXMT contract parameters, Trade.xyz set its initial reference price at $5. The official description calls this price a "discretionary reference price," meaning a reference value determined by the platform itself, while explicitly stating this is not a prediction of the IPO issue price, listing opening price, or post-listing stock price.
The official side also did not disclose which specific financing round, valuation model, or institutional quote the $5 was based on.
Therefore, CXMT's pricing is not formed completely freely from zero, but rather Trade.xyz first artificially sets the coordinate origin, then allows the order book to start trading around this origin.
This is also the first step to understanding the entire mechanism: the initial price comes from the deployer, and subsequent prices come mainly from traders.
Actual Transaction Price Is Determined by the Order Book
After the market goes live, traders and market makers can submit buy/sell orders in HyperCore's central limit order book, and the system matches according to price and time priority principles.
If buyers are willing to buy at a higher price, and sellers are unwilling to sell at the current price, the transaction price will rise; vice versa. Before CXMT lists, there is no external market that can continuously provide a real spot price, so there is no external oracle forcing the CXMT contract to be close to the 8.66 RMB IPO issue price.
This differs significantly from ordinary crypto perpetual contracts. If a BTC perpetual contract deviates from BTC prices on multiple spot exchanges, arbitrageurs can simultaneously buy/sell spot and contracts to push prices to converge. Before CXMT lists, there is neither freely tradable spot nor real stock that can be delivered to the contract, so traders cannot complete the same risk-free arbitrage.
Therefore, CXMT's transaction price can remain above or below the issue price for a long time. It reflects the expectations of order book participants, not a price verifiable via spot arbitrage.
Why Did the Price Sequentially Stop at $6, $7.2, and $8.64?
CXMT sets a 20% Discovery Bound, i.e., the price discovery range.
When the initial reference price is $5, the Mark Price can only move between $4 and $6. When sustained buying pressure pushes the internal oracle close to the upper limit, the system can reset $6 as the new reference price, so the next tier range becomes $4.8 to $7.2.
If the price continues to rise, the reference price can move again to $7.2, and the new upper limit becomes $8.64.
This process can be expressed as:
- First Tier Upper Limit: 5 × 1.2 = $6
- Second Tier Upper Limit: 6 × 1.2 = $7.2
- Third Tier Upper Limit: 7.2 × 1.2 = $8.64
CXMT allows up to 7 re-anchoring attempts upward and downward respectively. Therefore, 20% is just the instantaneous range relative to the current reference price at any point, not meaning the price is forever limited to ±20% of the initial price.
This also explains the obvious step-like structure in CXMT's early trend after launch. $6, $7.2, and $8.64 are not three naturally formed technical resistance levels, but price guards directly calculated from contract parameters.
This design can reduce the risk of a new market being instantly pumped or dumped by a single transaction just after launch, but it also affects price formation: when the market hits the upper limit, the chart does not necessarily show supply and demand naturally reaching equilibrium, but may just show the price temporarily hitting the system boundary.
Oracle Is Not the Latest Transaction Price, But Smoothed Order Book Price
CXMT has no external stock price for reference, so it uses Trade.xyz's internal oracle.
According to Trade.xyz's oracle documentation, the system first calculates the order book's impact bid price and impact ask price, i.e., the average price when executing according to a specified nominal amount on both buy and sell sides.
It does not directly adopt the best bid, best ask, or latest transaction, but observes whether the order book is overall located above or below the current oracle:
- If the executable buy price of the order book is overall higher than the oracle, the internal oracle will gradually move upward;
- If the executable sell price is overall lower than the oracle, the internal oracle will gradually move downward;
- If the current oracle is still located between the bid and ask, the adjustment magnitude may be zero.
Subsequently, the system uses a continuous Exponential Weighted Moving Average with a time constant of 30 minutes to smooth this change.
This means transaction prices can rise quickly, but the oracle will not immediately jump by the same amount. Only when higher bid/ask orders persist will the oracle gradually catch up to the market. Compared to directly adopting the latest transaction price, this method is less likely to be driven by a single small abnormal transaction.
However, this also means the oracle is not a "fair value" independent of the market, but a lagged and smoothed version of the order book price.
Mark Price Determines Liquidation, But Does Not Equal Transaction Price
Besides transaction price and oracle, there is also a Mark Price in the system used for calculating unrealized P&L, margin, and forced liquidation.
According to Trade.xyz documentation, Mark Price takes the median of the following three items:
- Internal oracle price;
- Oracle plus the 150-second EMA of the perpetual contract mid-price deviation relative to the oracle;
- Median of best bid, best ask, and latest transaction price.
Taking the median of three items can reduce the possibility of a single abnormal input directly triggering liquidation. A single update by the Relayer is also limited to within ±0.5% of the current price to slow down sudden jumps.
Therefore, there are several different "prices" in the CXMT market:
Price Main Use Transaction Price Price traders actually buy or sell at Oracle Price Funding rate reference, also serves as input for Mark Price Mark Price Calculate unrealized P&L, margin, and liquidation IPO Issue Price Issue price of real stock, currently does not directly constrain on-chain contracts
When people normally say "CXMT rose to $8," they usually refer to the order book transaction price or the mark price displayed on the interface; the two are not necessarily exactly the same during violent fluctuations.
Funding Rate Is Responsible for "Damping," Not Anchoring Real Stock Price
Ordinary perpetual contracts rely on funding rates to push contract prices close to spot prices. But before CXMT lists, there is no spot, so the funding rate can only compare the difference between contract price and internal oracle.
Trade.xyz sets the IPOP funding rate multiplier at 0.005, while the multiplier used for ordinary XYZ stock perpetuals is 0.5. That is to say, the funding rate intensity of Pre-IPO contracts is only about 1% of ordinary XYZ contracts.
The funding rate is still paid between long and short parties every hour, but its effect is significantly weakened. This is mainly because the internal oracle itself comes from the same order book. If the funding rate is too high, unilateral positions may incur very high funding costs during the market's long wait for the IPO.
Low funding rates allow traders to express judgments on the listing price for a longer time, but the cost is that the price lacks a strong external anchor. The funding rate can only suppress short-term deviations between contract price and internal oracle, it cannot judge whether CXMT should be worth 500 billion or 3 trillion.
Only After Listing Will External Stock Price Take Over
After CXMT starts normal trading on the STAR Market and generates sufficient external market data, CXMT is expected to convert to a standard stock perpetual contract.
At that time, the oracle will be based on CXMT A-share price, and then converted according to the RMB to USD exchange rate at that time; the funding rate multiplier will also recover from 0.005 to 0.5 used for ordinary XYZ stock perpetuals.
This conversion may be the moment the contract truly faces a test.
If the real stock price after listing is close to the on-chain price, the internal oracle and external oracle can connect relatively smoothly; if there is a significant difference between the two, the Mark Price may jump during conversion, thereby causing position P&L changes or even triggering liquidation.
The expected listing date set by Trade.xyz for CXMT is July 27, with a grace period until September 25 at the latest. If listing is delayed long-term or canceled, the contract defaults to settlement based on the full-cycle TWAP from launch to settlement; but in cases of M&A, major adverse events, or other special circumstances, Trade.xyz also reserves the space to adopt other settlement methods.
Does This Price Discovery Actually Have Meaning?
The Cerebras Pre-IPO contract previously launched by Trade.xyz provides a relatively successful case. Talos statistics show that the Hyperliquid contract VWAP for Cerebras in the last hour before Nasdaq opening was about $354.54, while the actual opening price was $350, a difference of about 1.3%. However, its IPO issue price was only $185. This shows the contract is closer to predicting the public market opening price, rather than the issue price determined by underwriters.
But a single case is not enough to prove this mechanism can stably and accurately price all unlisted companies.
The CXMT market especially has several limitations.
First, direct arbitrage between spot and contracts cannot be conducted before listing, so mispricing may persist. Second, on-chain participants do not equal the entire capital market; prices may be affected by a few large accounts, crypto trader risk appetite, and liquidity structure. Third, the discovery range will artificially shape short-term trends; step-like breakthroughs are not entirely the result of natural supply and demand. Finally, Trade.xyz is responsible for both initial price and contract parameters, and also for calculating and submitting oracle inputs; deployer risk cannot be ignored.
Therefore, the CXMT price on Hyperliquid is more suitable to be understood as a public, continuous expectation indicator with real funding costs, rather than the determined price after CXMT lists.
Conclusion
Hyperliquid did not calculate a stock price for an unlisted company out of thin air.
More accurately, Trade.xyz first sets a $5 initial reference price and a set of market rules, traders then submit real buy/sell intentions via the on-chain order book; the internal oracle smooths the order book's impact price into a funding rate reference, Mark Price is responsible for margin and liquidation, and Discovery Bound limits the price movement speed within a short time. Wait until real stock lists, then external A-share price takes over the oracle.
So, the pre-listing "stock price" on Hyperliquid can be summarized as:
Artificially set starting point + Order book supply and demand + Internal oracle smoothing + Funding rate damping + Price range guards.
It is not CXMT's real stock price, nor is it a simple conversion of the IPO issue price, but a collective bet on the future public market price formed by specific market participants with real money.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
吴说区块链
