Author: Nancy, PANews
As crypto players on social media were eagerly posting screenshots of their SpaceX subscriptions and sharing the joy of participating in this super IPO feast, Trade.xyz on Hyperliquid became a focal point of market controversy due to the pricing rules of its SpaceX (SPCX) pre-IPO perpetual contract, plunging into a public opinion vortex.
Following the SPCX Pricing Storm, Trade.xyz Faces a Trust Test
On June 10th, Trade.xyz issued a statement formally responding to the recent pricing controversy surrounding the SPCX pre-IPO perpetual contract.
According to the statement, Trade.xyz's IPOP contract is a type of price-based perpetual contract. Its core objective is to track market expectations for the price per share of Class A Common Stock, rather than reflecting the company's overall valuation. Therefore, information such as the company's total shares outstanding or market capitalization is not part of the contract rules, oracle pricing logic, or future contract conversion mechanisms. In other words, the SPCX price on Trade.xyz is more akin to an indicator reflecting market sentiment and trading expectations, not a theoretical stock price calculated based on company fundamentals.
Trade.xyz also mentioned that early product documentation had included some tutorial examples demonstrating how users could derive a reasonable per-share price based on their own judgments about company valuation and total shares outstanding. Although these contents were intended only to help understand the product mechanism, some users mistakenly believed the platform itself would price based on market cap or share data. Consequently, these examples have now been removed from the official documentation.
The statement emphasizes that Trade.xyz will not use, disclose, or rely on share count or market capitalization as a pricing benchmark for SPCX or any other XYZ market.
The trigger for this controversy came from the recently disclosed updated SpaceX S-1 filing. The document shows SpaceX's actual total shares outstanding is 13.08 billion, approximately 10% higher than the previously widely used market estimate of 11.87 billion shares. This implies that, assuming the company's overall valuation remains unchanged, the corresponding theoretical per-share price for SpaceX would need to be adjusted downward by about 10%.
Following this announcement, several centralized exchanges (CEXs) chose to suspend related contract trading, repricing based on the new share data before resuming trading. In contrast, Trade.xyz insisted its product logic does not depend on share count data and therefore did not adjust its pricing framework accordingly. The divergence between the two pricing systems sparked a wave of cross-platform arbitrage, quickly thrusting Trade.xyz into the spotlight of public scrutiny.
Regarding how to resolve this discrepancy in the future, Trade.xyz stated that once SpaceX officially completes its IPO and sufficient external trading data is formed in the public market, SPCX will switch to a standard external oracle pricing mechanism. At that point, the contract price is expected to gradually converge to the actual trading price of SpaceX stock in the public market.
Feedback from some community members
However, this clarification further fueled market controversy. Many users believe that during the initial product launch, Hyperliquid did not sufficiently and clearly disclose the contract rules, and the UI interface and official documentation long contained descriptions that were prone to misinterpretation. It was only when the IPO approached and the controversy erupted that the platform hastily issued a clarification announcement and revised the documentation. This retroactive corrective approach was difficult to convince users.
Greater discontent stemmed from users' real financial losses. As the HIP-3 mechanism itself lacks the Rebase capability of traditional exchanges, when the market repriced based on SpaceX's latest share count, the SPCX contract price could only be passively adjusted downward in a gap. As a result, the value of long positions shrank by approximately 10% in a short period, forcing many highly leveraged users to liquidate or even be directly liquidated. These losses directly translated into gains for short positions and arbitrageurs.
In the view of these affected users, the platform not only failed to express sufficient concern for the losses suffered but also did not propose any compensation or mitigation measures. Instead, it responded with "the product mechanism is as such," appearing very indifferent and lacking a sense of responsibility.
In a sense, the discussion surrounding SPCX pricing authority also provides a reference case for the design and rule disclosure of future on-chain Pre-IPO assets.
Rebase Dilemma Remains, On-Chain Pre-IPO Faces a Major Test
For Perp DEXs, lacking Rebase capability means that any future Pre-IPO asset, if it encounters common corporate actions in traditional stock markets like stock splits, additional issuances, or dividends, could lead to instantaneous revaluation of contract prices. This may trigger large-scale cascading liquidations and unfair losses, eroding user trust in the platform.
To understand the importance of Rebase, it is first necessary to understand what Rebase is and why it becomes a critical component in the design of Pre-IPO perpetual contracts.
Simply put, Rebase is a value-neutral adjustment mechanism. The platform synchronously adjusts the contract price and user position quantity in the same proportion, keeping the trader's overall position value largely unchanged before and after the adjustment. The need for this mechanism arises because during the Pre-IPO stage, the company's actual total shares outstanding are usually not publicly disclosed. Exchanges can only design the contract's initial price and multiplier based on market-estimated share counts. When the company formally submits an S-1/S-1A filing and discloses the actual share count, if the real number differs from the estimate, Rebase is needed to calibrate contract parameters. Otherwise, the contract price will gradually deviate from the true per-share value, creating opportunities for cross-platform arbitrage and causing passive losses for one-sided position holders.
However, compared to CEXs, implementing Rebase on Perp DEXs is more challenging.
Specifically, CEXs rely on centralized databases and professional risk control teams. They can quickly suspend trading after a corporate action (like a share increase or stock split), uniformly adjust all user positions via the exchange backend, and then resume market trading. This process is completed by the exchange, keeping users' nominal position value smooth and continuous. However, even for large CEXs with mature trading systems and professional technical teams, such Rebase operations involving synchronized adjustments across all market positions remain a complex engineering task.
Furthermore, on Perp DEXs, matching, liquidation, and position states all run on smart contracts, preventing direct data modification like CEXs. Achieving a similar Rebase effect often requires designing additional monitoring logic, special hooks, or upgrading contract mechanisms. This not only increases Gas costs and system complexity but also expands the potential attack surface, introducing new security risks.
Additionally, Rebase may further amplify the existing problem of liquidity fragmentation in decentralized markets. The same Pre-IPO asset might exist simultaneously on multiple DEXs, each with limited market depth. Facing the extra uncertainty brought by Rebase, LPs (Liquidity Providers) may reduce their willingness to commit capital, ultimately leading to decreased liquidity, wider slippage, and a further deterioration of the trading experience.
Of course, Rebase is not entirely impossible within a decentralized architecture. Some community users pointed out that, for example, Aster has already completed a Rebase adjustment for a similar asset. This suggests the real challenge is not that DEXs are inherently incapable of support, but rather whether platforms are willing to design additional mechanisms and bear the associated development and operational costs.
In contrast, beyond adhering to a more market-oriented pricing philosophy, Trade.xyz's underlying HIP-3 architecture allows developers to independently deploy their own Perp markets. While this model inherits Hyperliquid's high-performance order book system, each market has completely independent contract specifications, oracle definitions, and parameter settings. It lacks platform-level native support for unified Rebase, making it unable to easily implement batch adjustments for all positions. However, community insiders also revealed that Trade.xyz is researching solutions for possible future special events like stock splits.
From a longer-term perspective, the SPCX pricing controversy exposes not merely a single product design flaw but also a practical challenge that current Perp DEXs must confront in their exploration of RWA assets. In the future, as more Pre-IPO assets are mapped onto the blockchain, serving as a prelude to public market price formation, the question remains: Can on-chain Pre-IPO perpetual contracts establish a reliable enough price discovery mechanism? Can they withstand the tests of real corporate actions and information disclosure? Or will they devolve into capital games detached from fundamentals? Time and the market will provide the answers.
