The investment bank set the issue price for SK Hynix at $149, and the on chain contract was quoted at $169.26 before the opening, with a real opening price of $170 On August 18th, these three numbers were written into a 15 page opinion letter and presented to the SEC desk The person delivering the letter wants to clarify one thing: the price of an IPO is determined more accurately in the public market than in investment banks' inquiry books The submitters of this letter are the Hyperliquid Policy Center and trade [XYZ], the latter being the largest perpetual contract market deployment on the Hyperliquid chain, in response to the SEC's IPO modernization solicitation initiated in May of this year The tool they brought is called Pre IPO Perpetual Contract, abbreviated as IPOP First, let's talk about what problem they went for The number of listed companies in the United States is about 40% less than in the mid-1990s, and companies are going public later and even not at all. The company is still in the stage of private market growth, and only venture capital funds, qualified investors, and large institutions can obtain shares. When others can buy, the growth has already ended The issuer did not take advantage either. An IPO is priced without public participation, with the underwriting bank collecting orders privately and everyone else, sometimes including the company itself, waiting until the stock starts trading to know how the market values it The original words in the letter are: The company was making the most important transaction in its history, but set the price with its eyes closed This year's bill is presented as follows: Cerebras had an issue price of $185 and an opening price of $350; SpaceX's initial offering price is $135, with an opening price of $150; SK Hynix issues at $149 and opens at $170 The first transaction price of each issuance is 11% to 89% higher than the issuance price, and this price difference is not recorded in the company's account, but in the hands of the group of people who received the allocation quota Changxin Storage is more extreme in Shanghai, with an issue price of 8.66 yuan and an opening price of 49.50 yuan, which is 472% higher What exactly is IPOP In the weeks leading up to its expected listing, it prompts traders to go long or short on the company's future stock price and continues to generate a public price. Just like index futures telling you where the S&P 500 is before the opening bell rings, IPOP does the same for a stock that has never been publicly traded before What is it not: it does not represent shares, does not represent allocation rights, does not have voting rights, does not constitute any claims against the referenced issuer, only provides price exposure. It also does not transfer any restricted shares, and its functions end before the company goes public. The first IPOP market was Cerebras, which only existed for 13 days in total The most significant content in the letter is the pricing records of the five markets that have already completed the entire process The pricing of those American issuances was 10.8% to 38.4% lower than the transaction price of IPOP the day before; The issue price of Changxin Storage is less than one-fifth of the market indication price for IPOP. And when the expectations are too high, as the listing approaches, the price will self correct back All underlying data is on chain, and issuers, regulatory agencies, and researchers can check it anytime they want At the end of the letter, five things that need to be determined by the SEC were mentioned: whether the stock reference perpetual calculation of securities futures or securities swaps, and it is hoped that the SEC and CFTC will have the same approach; The disclosure should focus on contract mechanisms, funding rates, leverage, and liquidation lines, rather than ownership; It is only allowed to deploy within a limited window after the release of information; The oracle and settlement rules are announced in advance to prevent deployment parties from trading with significant non-public information; The last one is to move to the United States and gradually open up to retail investors with leverage and position restrictions They are not considered trespassing either. The CFTC has stated in its policy statement on May 29th that perpetual contracts referencing stock securities require joint review by the SEC and CFTC But it's hard to see where this letter can go now It is an opinion letter, not an application, and the SEC has not responded to it so far The two parties writing the letter are also stakeholders, one is the policy agency of Hyperliquid, and the other is the largest deployment party on this chain. The five markets they selected were their own samples As for the names Citadel, Jane Street, and Renaissance in PURR's Q2 13F, they were end of season long snapshots on June 30th, without short positions or hedging structures, which cannot prove who was betting on SEC release in advance Moreover, the limited window, leverage limit, and position limit mentioned in the letter have already indicated that even if they were to be lifted, the first version would still be a shortened version However, it can be noted that the regulatory risks you are concerned about are already being addressed by Hyperliquid HYPE Hyperliquid IPOP SEC