Author: Kuri, Deep Tide TechFlow

During the days leading up to SpaceX's IPO, Hyperliquid's pre-market price for SPCX was all over the screens, but very few looked closely at who was behind the deployment of this market.

In fact, it was a team called Trade.xyz. Anonymous, they just emerged this year, and now they account for over 90% of the pre-market contract volume on Hyperliquid. The recent hype surrounding SpaceX's on-chain Pre-IPO was mainly driven by them.

However, just three days after SpaceX rang the bell, on June 15, another team doing the same business announced its closure.

This team is called Ventuals, backed by Paradigm. They also focused on SpaceX's pre-market contracts, as well as OpenAI and Anthropic. They launched earlier this year and took just nine months to go from opening to shutting down.

On the same chain, with the same HIP-3 mechanism, in the same track. One made SpaceX the largest market in the field, while the other, holding OpenAI and Anthropic tightly, ended up going out of business.

Among the noteworthy aspects is how Ventuals exited. According to their official social media posts, they did not fold due to losses but announced they were acquired, with the entire team merging into another project within the Hyperliquid ecosystem. The principal amount was returned 1:1 to users, making for a decent exit.

But the issue lies here. Holding both OpenAI and Anthropic, the two rarest brands in the field, they should logically be the ones least likely to exit. Where did it go wrong?

Trade XYZ and Ventuals

The currently successful Trade.xyz team remains anonymous to this day.

The project's founder only revealed a bit during an interview with Hyperliquid's founder Jeff Yan, stating that he bought his first Bitcoin for $66 in 2013 and has been an investor ever since, never having done a project; if it weren't for meeting Jeff, he would have exited long ago.

This latecomer built the largest pre-market for Hyperliquid. According to Colossus, Trade.xyz has experienced a weekly growth of 38% since last October, with a total trading volume exceeding $130 billion.

They first dealt in silver, then in oil, later in the S&P 500, finally reaching SpaceX.

They chose SpaceX wisely.

SpaceX was set to ring the bell on Nasdaq on June 12, with the issuance price and the listing date being confirmed. By putting the pre-market contracts up, Trade.xyz was essentially betting on something that would eventually reveal the answer; on the opening day, Nasdaq would provide a true price. This true price acts like a line, pulling the pre-market price back to prevent it from drifting too far. Even if there were discrepancies along the way, the moment they rang the bell, it would be brought back.

And that was indeed the case. In the few days before SPCX’s listing, it was reported between $154 and $172, betting on a premium above the $135 issuance price, and on the opening day it surged, as expected.

Ventuals chose a different target.

Backed by Paradigm, one of the top venture capital firms in the crypto sphere, their background is far more respectable than the anonymous Trade.xyz. The brands they chose were also bigger, OpenAI and Anthropic, the two most scarce in the field.

However, neither of these companies had an upcoming listing date in the short term.

There is no external anchor pricing for them. According to Bloomberg, Anthropic has been allowing employees to sell old shares this year based on a $350 billion valuation, and OpenAI has been doing the same regularly. But these prices are often set behind closed doors, with a round of old share trading often involving parties that are already heavily invested, meaning the assets have not genuinely changed hands in a public market.

Such pricing may be accurate at certain times, but it lacks a publicly available order book that everyone can market to correct mistakes.

When Ventuals moved these prices onto the chain for contracts, they essentially suspended the entire market based on one or two chain-originated prices. What's more problematic is that they added a self-competitive mechanism to this pricing.

On-chain analysts have analyzed Ventuals' pricing logic:

Its oracle pricing is, half derived from external old stock transactions and financing price estimates, while the other half comes from the average price of the contracts themselves. In other words, half the price references itself. As buying pressure pushes up, the average price rises, and the oracle follows suit, pushing the price ceiling, which leads to further upward adjustments.

The outcome is that the prices for contracts like OpenAI and Anthropic linger near the ceiling, making it difficult for sell orders and liquidations to be executed. The charts may appear to be steadily rising, but in reality, they are structurally stuck there, not reflecting genuine supply and demand.

Source of the chart: MAG7 targets on Ventuals, showing sporadic candlesticks with no transactions during certain time periods.

Thus, this Pre-IPO does not seem so much like the market telling you how much OpenAI is worth, but rather a machine pushing the price up, then lifting further based on its self-derived price.

Trade.xyz bet on a target that would eventually be settled by Nasdaq; they had the safety net of a true price if they were wrong; Ventuals bet on a target that temporarily only existed in internal quotes, adding a layer of self-referential price feeding, leaving the price hanging in mid-air without a floor beneath it.

Shutdown Price Reference: OpenAI $1300, Anthropic $1600

As it comes to an end, is the last reported price valid?

When Ventuals shut down, they needed to set a final price for the contracts held to clear everyone's positions. Their method was to freeze the average price from the past 24 hours. OpenAI ultimately settled at $1341.80 per share, while Anthropic settled at $1618.90.

These two numbers are now etched into the settlement records, becoming the last quotes left by these two companies on the chain.

As previously mentioned, half of this price references external old stock prices, while the other half references the contracts’ own average price, rising long-term toward the ceiling. In other words, much of the $1341.80 includes a significant portion of price being pushed up by the machine based on its own calculations.

It is accurate to two decimal places, but that does not necessarily mean it is true.

The most ironic thing is that, despite this price, some people outside truly take it seriously.

According to Bloomberg, employees of SpaceX, OpenAI, and Anthropic, along with some late-stage investors, have approached Ventuals about using this platform to value their equity.

I think this matter requires a careful examination.

These individuals are holding real old stocks; logically, they should know better than anyone how much their stocks are worth. However, the quotes in the primary market are like squeezing toothpaste once a year; there is a blank space between rounds of financing, and no one knows whether the stock prices are rising or falling in the meantime.

In contrast, places like Ventuals, however unreliable, at least report a number continuously for 24 hours, allowing for an observation of price movements.

Thus, an inverted situation has emerged. Those who should have the most pricing power, the insiders, are instead fixating on a number on a retail trader's table, searching for a bit of psychological comfort.

This reflects the most tangled aspects of the pre-market pricing business.

The most coveted targets lack a fair price; the more the price is absent, the more everyone is eager to grasp anything that seems like a price, even if it’s something a machine produces on its own.

With Ventuals closing down, those two terminal prices will be frozen there. However, the demand for looking at such numbers for reference surely remains undiminished.

The Pre-Market Pricing Business, Players Compete to Enter

Demand has not diminished, but supply is increasing, and it is becoming more formal.

In the same week that Ventuals shut down, Coinbase launched its own pre-market perpetual contracts, with the first target being SpaceX, targeting users outside of the U.S.

Not only Coinbase. Polymarket launched a private company valuation prediction market using Nasdaq data, and Citi introduced tokenized private company stocks for wealth and institutional clients. The crypto side is moving forward, and traditional investment banks are also getting involved.

This is no longer a small smattering of anonymous teams messing around on Hyperliquid. Providing unlisted companies with a price that can be traded at any time is becoming a legitimate business that everyone wants a piece of.

For domestic readers, this demand is actually familiar. Initial public offerings require queuing, and shares in the primary market are only distributed among institutions and high-net-worth individuals; ordinary people can't even get a foot in the door. Now someone is displaying the prices of companies like OpenAI and SpaceX, allowing transactions 24/7, which is the first time many people are encountering such assets. The demand is real.

However, the shutdown of Ventuals has clearly exposed the vulnerabilities of this business in the past six months.

Regarding price, it’s not enough to have people willing to trade; there must be a public market where everyone can participate and correct mistakes. Switching to Coinbase to handle it won't automatically eliminate this vulnerability. It merely changes from an anonymous team’s signboard to a more prominent one. The company below still remains unlisted, and that fair price still does not exist.

Will the next person to take over and price it do better than Ventuals? The answer might only be revealed when OpenAI truly stands on the day it rings the bell.