Hyperliquid Policy Center Proposes Regulatory Framework for Pre-IPO Perpetual Contracts

The Hyperliquid Policy Center (HPC), in collaboration with trade[XYZ], has submitted a comment letter to the US Securities and Exchange Commission (SEC) advocating for the creation of a regulatory framework for pre-IPO perpetual contracts, termed IPOPs. This proposal, made on August 18, seeks to allow traders to speculate on IPO prices before companies officially go public, utilizing on-chain technology.

IPOPs are cash-settled derivative instruments that reflect anticipated public company listings, settling in USDC without granting ownership rights or voting power. They offer a continuous, market-implied valuation for private companies, operating around the clock. Currently, five active IPOP markets are available on the Hyperliquid platform, including notable companies like SpaceX and Cerebras, whose pre-IPO prices have closely mirrored their actual IPO opening levels.

Since their inception, Hyperliquid's pre-IPO markets have generated approximately $1.46 billion in cumulative trading volume, with open interest around $106 million as of early June. The SpaceX IPOP, launched on May 18, has quickly gained attention in the market.

This is not HPC's first engagement with the SEC; they previously met with the SEC’s Crypto Task Force to discuss perpetual markets. The recent comment letter outlines specific recommendations regarding disclosures, listing standards, and safeguards against market manipulation, while also advocating for retail investor access to these markets. The proposal aims to democratize pre-IPO exposure, which has traditionally been limited to venture capitalists and high-net-worth individuals.