DeFi Priced the Largest IPO in History Before Nasdaq Opened

On the morning Cerebras Systems went public this May, a photo circulated of an underwriting banker’s screen. Next to the usual terminals sat the trading interface of Hyperliquid, a crypto exchange¹. The banks had set the IPO price themselves, yet they were checking a decentralized market to learn where the stock would actually open.

One month later, SpaceX listed on Nasdaq in the largest IPO ever, raising $75 billion at $135 per share (a total that grew to $85.7 billion once underwriters exercised their full allotment)^2,3. By the time the ticker SPCX printed its first trade, the same on-chain exchange had been pricing the company continuously for almost a month⁴. This post explains how an always-open financial system priced SpaceX before Wall Street could, why the openness of that system produced both the accuracy and the failures of IPO week, and where the growth of on-chain equity markets creates opportunities for funds like Gadget.

A parallel market trades around traditional exchanges

The New York Stock Exchange (NYSE) and Nasdaq are open five days a week, from 9:30 in the morning to 4:00 in the afternoon Eastern time, for roughly six and a half hours of core trading. DeFi markets, by contrast, are typically open every hour of every day, with rare exceptions for network upgrades and outages.

Because the on-chain market is open when the traditional one is not, it integrates information the traditional one has not priced yet. A trader who operates on both types of venue can watch an on-chain market react to Sunday news in real time and carry that reading into Monday’s open. This is why venues that never close have begun to act as a signal for participants on both sides: not a replacement for the traditional exchange, but the freshest available estimate of where an asset’s price will land.

Pre-market and after-hours trading in traditional finance (TradFi) used to serve as the original source of additional signal. Barclay and Hendershott, studying millions of after-hours trades, found that individual trades outside regular hours carry more information than trades during the day, and that a meaningful share of a stock’s price discovery occurs before the open¹⁹. Subsequent work on earnings announcements found that after-hours trading following a release quickly incorporates the news into prices, so the informed reaction is largely complete before the next session begins²⁰. Extended hours added signal at the margins of the trading day; on-chain markets extend the same logic until there is no margin left, because the market never closes at all.

In addition to operating for longer periods, DeFi exchanges also tend to offer more products to trade. A regular stock or share carries ownership and voting rights and typically trades on a TradFi exchange like Nasdaq or NYSE. On DeFi, traders can also hold a custody-backed token, which is a blockchain token redeemable for a real share held by a custodian (the legal body who issued the token). There are also tracker tokens, which follow a company’s price but hold no share behind it. And with the least rights are perpetual futures (perps), which are a contract that tracks the price of an asset and never expires. Traditional futures contracts are also available on TradFi exchanges, but they have an expiry date (see the Futures Contracts Primer for more). It’s these products that make DeFi an extension of TradFi rather than a completely uncorrelated market to ignore. They can also look identical to one another to a retail investor on a platform’s UI, making the differences between them easy to miss (more on this later). Figure 1 summarizes the main products available.

On-chain markets priced SpaceX before Nasdaq opened

On May 18, nearly a month before the Nasdaq listing, a builder called Trade.xyz deployed a SpaceX perp on Hyperliquid, and price discovery for SPCX (SpaceX) began on crypto markets⁴. The contract traded through nights, weekends, and every filing update in between, drifting from an early spike down toward the range where the stock would eventually open⁶. Figure 2 compares the contract’s price entering listing day with the IPO price and the Nasdaq opening print.

This wasn’t the first time Hyperliquid priced a company. Underwriters priced Cerebras at $185 in May and watched it open at $350; Hyperliquid’s Cerebras contract had traded within 1.3% of that open in its final pre-listing hour⁵, hence why bankers had DeFi markets open during the company’s TradFi IPO. Pantera Capital described Hyperliquid as “the exchange on which price discovery happens when all other markets are closed”¹, and Arkham called the SpaceX contract “a real-time oracle for both institutional underwriters and retail speculators”¹⁰.

Not everyone read the signal so generously. Eric Chen, co-founder of Injective Labs, told CNBC the contract was “a useful signal, but not a guarantee” of how the broader market would behave once trading began, since perp traders skew toward leverage-seeking speculators, meaning that trading behavior on Hyperliquid may overrepresent relatively more risk-on investors as opposed to buy-and-hold institutions⁷. The listing itself settled the question for the SpaceX IPO: the contract sat within a few dollars of the stock’s first-day close, and Coin Metrics concluded that these markets can provide “a credible signal for IPO pricing”⁵.

Gadget Capital monitored SPCX positions for market opportunities. Continuous markets generate information while traditional venues sleep, and reading them ahead of the open has become part of how we track listings that matter to crypto markets. As such, we treat venues like Hyperliquid as a leading indicator: a place to see trading behavior form before traditional exchanges open, which gives prepared traders an informational edge at the bell.

Not all perps and tokens are created equal

Listing SpaceX on Nasdaq took a registration statement with the SEC, audited financials meeting one of the exchange’s quantitative standards, governance requirements including an independent board majority, a syndicate of underwriters, listing fees, and months of review¹¹. Listing SpaceX on Hyperliquid took one builder submitting 500,000 HYPE (~30 million USD) as collateral and building the UI for their market offering (under HIP-3), which Trade.xyz did on a Sunday morning^4,10,12. Hyperliquid’s low barrier of entry empowers entrepreneurs across the globe to build a diverse set of innovative products and solutions.

With all the different product types on DeFi, retail investors can have a hard time differentiating between them. Eight platforms offered tokenized SpaceX exposure ahead of the listing, and the products looked alike while carrying very different rights. When xStocks proved unable to source actual shares, Binance, Bybit, and Bitget canceled their pre-IPO campaigns at the bell and refunded more than $1 billion in customer orders^13,14,15. Products backed by real shares in custody, such as Backpack’s redeemable token, delivered as promised, and cash-settled perps were untouched because they never claimed a share to begin with¹⁴. Notably, traditional brokerages also cut their retail allocations that week, so the failure traced to a share shortage rather than to anything on-chain¹⁶. Figure 3 displays a timeline of these product release dates.

We believe episodes like this are why guidance in DeFi is valuable. An open market asks more of its participants than a screened one, and knowing which product carries which rights was the difference in June between holding exposure and holding a refund. Additionally, stress tests of this kind are how the industry matures: each failure draws a clearer line around what works, and the products that survive are the ones that meet the needs of more users. At Gadget Capital, we leverage our 5 years of experience operating in DeFi to drive our capital allocation decisions.

Growing on-chain equity markets create room for professional liquidity

Despite the rights fiasco, trading volume kept rising. In the month after the IPO, on-chain trading of tokenized stocks reached a record $3.86 billion, and tokenized SpaceX alone made up roughly a third of it¹⁷. The venues kept running after the bell too: on-chain SpaceX markets traded overnight and through weekends while Nasdaq was dark, extending the early-read dynamic from the pre-IPO period into ordinary weeks. Figure 4 highlights SpaceX’s share of trading volume.

Markets this young need liquidity, and that need is an opening for professionals. Sustained tokenized-equity demand creates opportunities for hedge funds like Gadget Capital to provide liquidity to these venues or to trade the assets themselves, particularly for participants who understand both the traditional security and the on-chain wrapper around it. Ultimately, the venues that grew out of SpaceX’s IPO are new revenue streams sitting outside traditional financial infrastructure, and they reward the firms prepared to operate in both worlds.

The pre-market is moving on-chain

SpaceX’s opening range was discovered on a crypto exchange before Wall Street opened, and the same openness that made the pricing possible produced the week’s failures in tokenized allocation. We view these event cycles as evolution opportunities for products in DeFi as market makers and traders adapt to each innovation. OpenAI and Anthropic are slated to follow SpaceX to the public markets, and cash-settled pre-IPO markets for both already trade^5,18, so the next tests of on-chain price discovery are already underway.

At Gadget Capital, we monitor continuous on-chain markets as part of how we evaluate opportunities, and we believe in the continued growth and maturation of decentralized finance as its venues take on work that traditional infrastructure cannot. If you appreciate our approach to markets like these, reach out to learn more.