Editor: WuBlockchain
TL;DR
● Not a 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 ChangXin Memory Technology. It does not provide stock ownership, IPO allocation, dividends, or voting rights.
● Order Book Driven Price: Trade.xyz artificially set an initial reference price of $5. Thereafter, the actual trading price is primarily determined by the supply and demand of the buy/sell orders on Hyperliquid's on-chain order book. As there is no tradable spot market before listing, the contract price is not required to align with the IPO issue price of 8.66 yuan.
● Multi-layered Mechanisms Control Volatility: The internal oracle updates based on the order book's impact price using a 30-minute EWMA smoothing; the mark price, used for P&L and liquidation calculations, synthesizes the oracle, a 150-second price deviation EMA, and bid/ask data.
● Price Guard Rails Can Move Dynamically: CXMT has a single-level Discovery Bound of 20%, allowing for up to 7 re-anchorings upwards and downwards. Thus, the price has sequentially hit $6, $7.2, and $8.64, rather than being permanently confined within ±20% of $5.
● Switch to External Price Post-Listing: Once ChangXin Memory Technology lists and generates sufficient market data, the contract is expected to convert to a regular stock perpetual, with the oracle switching to the A-share price in RMB converted to USD. Price discrepancies before and after the conversion may cause P&L jumps or even trigger liquidations.
ChangXin Memory Technology has not yet officially listed on the STAR Market, but a 24/7 tradable "stock price" has already appeared on Hyperliquid.
On July 14, Trade.xyz launched the ChangXin Memory Technology Pre-IPO Perpetual Contract via Hyperliquid's HIP-3 framework, with the ticker xyz:CXMT. The contract started with an initial reference price of $5, supports up to 5x leverage, and is settled in USDC.
After launch, the price successively touched $6, $7.2, and $8.64. As of July 16, 02:13 UTC, on-chain data from Hyperliquid shows the CXMT mark price around $7.37, with a 24-hour trading volume of approximately $50.56 million and an open interest nominal value of about $23.07 million.
Meanwhile, ChangXin Memory Technology has set its A-share issue price at 8.66 yuan per share, with an issuance valuation of 579.18 billion yuan, and expects to list on July 27. Converting at an approximate USD/CNY exchange rate of 6.77, the $7.37 contract price on Hyperliquid equates to about 49.9 yuan, roughly 5.76 times the issue price. Based on the post-issuance share count of approximately 66.88 billion shares, this implies a market cap of about 3.34 trillion yuan. A Reuters report indicates some investors expect ChangXin's post-listing valuation to be between 3 trillion and 5 trillion yuan.
However, this $7.37 is not the real stock price of ChangXin Memory Technology, nor is it a valuation read by Trade.xyz from a private market database. It is a derivative price generated by a combination of the order book, internal oracle, mark price, funding rate, and price guard rails.
This is a Contract on the Future Stock Price
According to the official definition by Trade.xyz, a Pre-IPO Perpetual, or IPOP, is a cash-settled linear perpetual contract used to trade the market's expectation of a company's post-IPO public equity value.
The CXMT contract specifically tracks the expected USD value of one ordinary A-share of ChangXin Memory Technology, not the company's total market capitalization. After listing, the oracle will convert ChangXin's RMB stock price to USD at the prevailing exchange rate.
Holding a CXMT contract does not mean holding ChangXin Memory Technology stock. Traders do not receive IPO allocations, dividends, voting rights, nor can they exchange the contract for real shares after listing. Longs and shorts are merely trading their judgments on ChangXin's future public market price.
Therefore, what is traded on Hyperliquid is not "how much ChangXin is worth now," but rather "what the participants in this contract believe one share of ChangXin might be worth after its IPO."
Hyperliquid Provides the Trading System, Trade.xyz Sets the Market Rules
CXMT was not launched directly by the Hyperliquid core team but was deployed by Trade.xyz via HIP-3.
HIP-3 allows third-party developers to establish their own perpetual contract markets on HyperCore. HyperCore handles the on-chain order book, matching, margin, liquidation, and settlement; the deployer is responsible for determining the trading asset, oracle methodology, leverage caps, risk parameters, and executing conversions or settlements when necessary.
In other words, there is a two-layer division of labor in this system:
Element Primary Responsible Party Role Limit Orders & Trade Matching HyperCore Determines the actual execution price at which traders buy/sell 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 prices Margin & Liquidation Execution HyperCore Manages position risk based on the mark price
Thus, while it uses a fully on-chain order book for trading and settlement, the pricing methodology 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 the CXMT contract parameters, Trade.xyz set its initial reference price at $5. The platform describes this price as a "discretionary reference price," i.e., a reference value determined at its own discretion, while explicitly stating it is not a prediction of the IPO issue price, listing opening price, or post-listing stock price.
The platform also did not disclose the specific basis for the $5 price, such as which financing round, valuation model, or institutional quote it was derived from.
Therefore, CXMT's pricing did not start completely freely from zero. Instead, Trade.xyz first artificially set the origin point, and then the order book began trading around this origin.
This is the first step in understanding the entire mechanism: the initial price comes from the deployer, and subsequent prices primarily come from traders.
The Actual Trading Price is Determined by the Order Book
After the market launch, traders and market makers can submit buy and sell orders in HyperCore's central limit order book, which matches orders based on price and time priority.
If buyers are willing to buy at higher prices while sellers are unwilling to sell at the current price, the trading price will rise, and vice versa. Before ChangXin's listing, there is no external market providing a continuous, real spot price, so there is also no external oracle forcing the CXMT contract to align with the IPO issue price of 8.66 yuan.
This differs significantly from ordinary cryptocurrency perpetual contracts. If a BTC perpetual deviates from BTC prices on multiple spot exchanges, arbitrageurs can simultaneously trade spot and contracts to push the prices back together. Before listing, CXMT has neither freely tradable spot nor real shares deliverable against the contract, preventing traders from executing the same risk-free arbitrage.
Therefore, CXMT's trading price can remain above or below the issue price for an extended period. It reflects the expectations of order book participants, not a price verifiable through spot arbitrage.
Why Did the Price Stop Sequentially at $6, $7.2, and $8.64?
CXMT has a Discovery Bound of 20%, i.e., a price discovery range.
When the initial reference price was $5, the mark price could only move between $4 and $6. When sustained buying pressure pushed the internal oracle close to the upper bound, the system could reset $6 as the new reference price, making the next range $4.8 to $7.2.
If the price continued to rise, the reference price could move again to $7.2, with the new upper bound becoming $8.64.
This process can be represented as:
- First Upper Bound: 5 × 1.2 = $6
- Second Upper Bound: 6 × 1.2 = $7.2
- Third Upper Bound: 7.2 × 1.2 = $8.64
CXMT allows a maximum of 7 re-anchorings upwards and downwards each. Therefore, the 20% is only the instantaneous range relative to the current reference price at any given time, not a permanent limit of ±20% from the initial price.
This also explains the distinct step-like structure in CXMT's early price movement. $6, $7.2, and $8.64 are not three naturally formed technical resistance levels but price guard rails directly calculated from the contract parameters.
This design can reduce the risk of a new market being instantly pumped or dumped by a single trade upon launch but also influences price formation: when the market hits an upper bound, the chart might show the price temporarily hitting a system boundary, not necessarily a natural supply-demand equilibrium.
Oracle is Not the Latest Trade Price, but a Smoothed Order Book Price
CXMT has no external stock price for reference and thus 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, which are the average prices for executing a specified notional amount on the buy and sell sides, respectively.
It does not directly use the best bid, best ask, or the latest trade. Instead, it observes whether the order book as a whole is above or below the current oracle:
- If the executable buy prices across the order book are collectively higher than the oracle, the internal oracle gradually moves upwards.
- If the executable sell prices are collectively lower than the oracle, the internal oracle gradually moves downwards.
- If the current oracle remains between the bid and ask spreads, the adjustment magnitude might be zero.
Subsequently, the system smooths this change using a continuous exponentially weighted moving average with a 30-minute time constant.
This means the trading price can rise rapidly, but the oracle does not immediately jump by the same magnitude. Only when higher bid/ask levels persist will the oracle gradually catch up to the market. Compared to directly using the latest trade price, this method is less prone to being pushed by a single small, anomalous trade.
However, this also means the oracle is not an independent "fair value" but a lagged and smoothed version of the order book price.
Mark Price Determines Liquidation, But Does Not Equal Trading Price
Besides the trading price and oracle, there is a Mark Price in the system used to calculate unrealized P&L, margin, and forced liquidation.
According to Trade.xyz documentation, the Mark Price is the median of the following three values:
- Internal oracle price.
- Oracle price plus a 150-second EMA of the perpetual contract mid-price deviation from the oracle.
- The median of the best bid price, best ask price, and latest trade price.
Taking the median of three values reduces the likelihood of a single anomalous input directly triggering liquidation. A single Relayer update is also limited to ±0.5% of the current price to mitigate sudden jumps.
Therefore, several different "prices" exist in the CXMT market:
Price Primary Use Trading Price The price at which traders actually buy or sell Oracle Price Funding rate reference and input for Mark Price Mark Price Calculates unrealized P&L, margin, and liquidation IPO Issue Price The issue price of the real stock, currently not directly binding for the on-chain contract
Commonly saying "CXMT rose to $8" usually refers to the order book trading price or the mark price displayed on the interface; the two may not always be identical during sharp volatility.
Funding Rate Provides 'Damping,' Not an Anchor to Real Stock Price
Ordinary perpetual contracts rely on funding rates to push the contract price toward the spot price. But CXMT has no spot before listing, so the funding rate can only compare the difference between the contract price and the internal oracle.
Trade.xyz sets the IPOP funding rate multiplier at 0.005, while the regular XYZ stock perpetual uses a multiplier of 0.5. This means the funding rate intensity for the Pre-IPO contract is only about 1% of that for regular XYZ contracts.
The funding rate is still paid hourly between longs and shorts, but its effect is significantly weakened. This is primarily because the internal oracle itself derives from the same order book. If the funding rate were too high, unilateral positions during the long wait for the IPO could incur substantial funding costs.
A low funding rate allows traders to express their judgment on the listing price for a longer duration, but at the cost of the price lacking a strong external anchor. The funding rate can only suppress short-term deviations between the contract price and the internal oracle; it cannot judge whether ChangXin should be worth 500 billion or 3 trillion yuan.
Post-Listing, External Stock Price Takes Over
Once ChangXin Memory Technology begins normal trading on the STAR Market and generates sufficient external market data, CXMT is expected to convert into a regular stock perpetual contract.
At that point, the oracle will be based on ChangXin's A-share price, converted at the prevailing USD/CNY exchange rate; the funding rate multiplier will also revert from 0.005 to the 0.5 used by regular XYZ stock perpetuals.
This conversion may be the moment the contract truly faces a test.
If the post-listing real stock price is close to the on-chain price, the internal and external oracles can transition smoothly. If there's a significant discrepancy between the two, the Mark Price might experience a jump during conversion, leading to changes in position P&L or even triggering liquidations.
Trade.xyz set the expected listing date for CXMT as July 27, with a grace period extending until September 25 at the latest. If the listing is significantly delayed or canceled, the contract defaults to settling based on the TWAP from launch to settlement; however, Trade.xyz also reserves the right to adopt other settlement methods in cases of mergers, material adverse events, or other special circumstances.
Does This Price Discovery Have Meaning?
Trade.xyz's previously launched Cerebras Pre-IPO contract provides a relatively successful case. Statistics from Talos show that the Hyperliquid contract's VWAP for Cerebras in the last hour before its Nasdaq opening was approximately $354.54, while the actual opening price was $350, a difference of about 1.3%. However, its IPO issue price was only $185. This suggests the contract was closer to predicting the public market opening price than the underwriter-determined issue price.
But a single case is insufficient to prove this mechanism can stably and accurately price all pre-IPO companies.
The CXMT market, in particular, has several limitations.
First, direct arbitrage between spot and contract is impossible before listing, allowing mispricing to persist. Second, on-chain participants do not represent the entire capital market; the price may be influenced by a few large accounts, crypto traders' risk appetite, and liquidity structure. Third, the discovery range artificially shapes short-term price action; step-like breakouts are not entirely the result of natural supply and demand. Finally, Trade.xyz is responsible for both the initial price and contract parameters as well as calculating and submitting oracle inputs, making deployer risk non-negligible.
Therefore, the CXMT price on Hyperliquid is better understood as a public, continuous expectation indicator with real capital costs, rather than a definitive price for ChangXin Memory Technology post-listing.
Conclusion
Hyperliquid did not conjure a stock price for an unlisted company out of thin air.
More accurately, Trade.xyz first set a $5 initial reference price and a set of market rules. Traders then submit their genuine buy/sell intentions via the on-chain order book. The internal oracle smooths the order book's impact price into a funding rate reference, the Mark Price handles margin and liquidation, and the Discovery Bound limits short-term price movement speed. Once the real stock lists, the external A-share price takes over the oracle.
Thus, the pre-listing "stock price" on Hyperliquid can be summarized as:
Artificially set starting point + Order book supply/demand + Internal oracle smoothing + Funding rate damping + Price range guard rails.
It is not the real stock price of ChangXin Memory Technology, nor a simple conversion of the IPO issue price. It is a collective bet, made with real capital by specific market participants, on the future public market price.
