Original ｜Odaily Planet Daily (@OdailyChina)

Author｜Golem (@web3_golem)

On July 27, domestic storage giant Changxin Technology landed on the A-share Science and Technology Innovation Board, breaking multiple historical A-share records on its first IPO day. Changxin Technology is the first technology stock in A-share history with an opening market value exceeding 3 trillion yuan (3.31 trillion yuan), and also the first stock to have a transaction volume exceeding 100 billion yuan in the first hour of trading. On its first day of listing, Changxin Technology closed up 465.82%, with a total market value fixed at 3.28 trillion US dollars, ranking first in A-shares and surpassing the market value of Intel in the international market.

Another highlight is that Changxin Technology's listing first confirmed TradeXYZ's "dominance" in the pricing of the A-share market.

As the first A-share stock pre-market contract launched by TradeXYZ, Changxin Technology opened at 49.5 yuan in A-shares, equivalent to approximately 7.31 US dollars at the current exchange rate of 6.77 yuan to 1 US dollar; at the same time, the pricing of Changxin Technology's contract (CXMT) on TradeXYZ was 7.12 US dollars, with a deviation of less than 0.2 US dollars.

TradeXYZ Successfully "Pre-prices" Changxin Technology IPO

As a popular technology stock, most domestic brokers and institutions believed that Changxin Technology's valuation on the first day of listing would fall within a reasonable range of 2 trillion to 3 trillion yuan, with expectations above 3 trillion US dollars already fully accounting for the "domestic scarcity premium" and future performance assumptions, estimating a 4 trillion yuan valuation only in extremely optimistic scenarios.

However, the fact proved that domestic brokers and institutions were overly conservative, while the overseas platform TradeXYZ had a more accurate price discovery for Changxin Technology.

On July 15, TradeXYZ launched the pre-market perpetual contract for Changxin Technology (CXMT) in the Hyperliquid HIP-3 market, supporting up to 5x leverage. A few hours after its launch, millions of dollars worth of CXMT buy orders appeared at the 6 US dollar position on the Hyperliquid order book, and the price subsequently rose, reaching a peak of 8.64 US dollars that day, indicating a market capitalization exceeding 550 billion US dollars for Changxin Technology based on the then-pre-market price, equivalent to over 3.72 trillion yuan, even surpassing Tencent to rank 32nd in global market capitalization.

The price of Changxin contracts on TradeXYZ reached a high of 8.64 US dollars on the first day

As TradeXYZ's first A-share stock market contract, Changxin Technology provided risk exposure for investors who were not qualified to participate in the IPO and trading of Changxin Technology. Therefore, there was an overheated sentiment in the pricing of Changxin Technology on the first day, which excessively pushed up the price of Changxin's pre-market contracts.

Quickly, the market returned to rationality, and on the eve of Changxin's listing on July 27, the price of CXMT pre-market contracts generally showed a downward trend, ultimately maintaining around 6.1-6.4 US dollars (approximately 41-43 yuan) on July 26, with the market valuing it still around 3 trillion yuan.

On July 27, Changxin Technology's opening market value was 3.31 trillion yuan, which did not deviate much from Changxin Technology's pre-IPO valuation on TradeXYZ. During the collective bidding phase before Changxin Technology's opening, the price of CXMT pre-market contracts on TradeXYZ further converged towards Changxin's A-share bidding price; ultimately at 9:30 when A-shares opened, the price of CXMT pre-market contracts was 7.12 US dollars, with a deviation of less than 0.2 US dollars from the spot opening price of Changxin Technology in A-shares.

This also left those investors hoping to conduct arbitrage trades on Changxin in both on-chain and traditional financial markets empty-handed. Well-known KOL in the crypto space Jiang Zhuoer wrote that "there's no play on Changxin Technology" because the bidding phase price of Changxin Technology was basically no different from the price on TradeXYZ, stating, "Currently, there is neither a way to buy nor to arbitrage."

Therefore, TradeXYZ's price discovery for Changxin Technology's IPO is extremely successful, indicating that TradeXYZ's price discovery mechanism is becoming more refined and is further encroaching on the traditional financial pricing power for corporate IPOs in the global market.

Discounted Trading After Opening

However, after opening, as Changxin Technology was converted into a standard XYZ perpetual contract supporting up to 10x leverage, the marked price of CXMT contracts on TradeXYZ deviated further from the A-share spot price of Changxin. There were instances of discounted trading on TradeXYZ compared to the spot price of Changxin A-shares.

This is related to TradeXYZ's oracle mechanism. In the Pre-IPO phase, due to the absence of real external prices, the price of the CXMT contract was determined by TradeXYZ's internal oracle. Once Changxin officially listed, the price of CXMT contracts would gradually switch to tracking external oracle prices based on A-share spot trading. Thus, the marked price of the CXMT contract essentially created a deviation from the external oracle price.

After opening, the marked price of CXMT contracts showed a deviation from the oracle price, which even expanded to 0.4 US dollars at one point.

The reason for this deviation is that TradeXYZ, during the transition from tracking the internal oracle price to tracking the external oracle price for the contract price, implemented a progressive convergence limit. This means that the marked price of the contract is allowed to converge toward the target price at a controlled slow rate, with the oracle price updating about every 3 seconds, but each change is restricted to ±1%. Thus, the marked price can only gradually converge towards the target price. As a result, this restriction led to discounted trading of the CXMT contract price while catching up with the external oracle.

However, during A-share market closures, the price of CXMT contracts will revert to aligning with the internal oracle price, effectively entering a "pre-market" trading phase.

Although Changxin Technology was not the first individual stock pre-IPO contract listed on TradeXYZ, it had previously excelled in price discovery for IPOs of US stocks like Cerebras and SpaceX. For TradeXYZ, pricing Changxin Technology also served as an important test of its contract price mechanism, funding rates, and liquidity performance, especially since the oracle needs to add a layer of USD/RMB exchange rate conversion on top of the original tracking quotes, meaning that the profits and losses of holders need to reflect both stock price and exchange rate fluctuations.

From the results, apart from the brief discounted trading episode caused by oracle overreach, TradeXYZ's transition from pre-market contracts to standard contracts for Changxin Technology has been relatively smooth without the controversy faced during SpaceX's listing (Related reading:Hyperliquid Pre-market Contract Controversy: Why Isn't the Agreed-upon SpaceX Share Number Counted?).

From the data, as of the time of publication, the open interest in Changxin Technology's unhedged contracts on Hyperliquid was 91.85 million US dollars, peaking at 100 million US dollars, with a 24-hour trading volume of 232 million US dollars, about 0.16% of Changxin's A-share cash trading volume on its first day.

Open interest and trading volume of Changxin Technology contracts on Hyperliquid

However, judging TradeXYZ's value solely based on trading volume clearly underestimates its significance. The several hundred million US dollars in trading scale on TradeXYZ is merely the tip of the iceberg compared to traditional securities exchanges, and it doesn't shake the status of liquidity; what it truly alters is the threshold and method by which market participants engage in the price game of Changxin Technology.

For global investors, TradeXYZ provides a new channel to gain price exposure to the A-share market without needing to enter it. In the past, ordinary investors faced substantial threshold restrictions to participate in the A-share Science and Technology Innovation Board, while overseas investors found it difficult to directly gain exposure to A-share risks.

But on TradeXYZ, no securities account, asset threshold, or geographic restrictions are required; any stablecoin wallet user can gain risk exposure to trading Changxin Technology, unaffected by the traditional financial market's closure,meaning that even at this moment, the on-chain price game for Changxin Technology is still ongoing.

Changxin Technology's Largest On-chain Short Position Suffers Over 1.4 Million USD Loss

On the first day of Changxin's listing, bearish on-chain whales faced significant losses, most notably the "largest short position on Changxin Technology".

Before Changxin's listing, the "largest short position on Changxin Technology" (0xf2...1244) on Hyperliquid had been continuously adding to the CXMT short position for several days. According to hypurrscan data, this address currently holds 2.6 million CXMT short positions, valued at approximately 18 million US dollars, with an average opening price of 6.4 US dollars (approximately 43.3 yuan). As of the time of publication, it has a floating loss of 1.39 million US dollars.

The largest short position on Changxin Technology on Hyperliquid

It is worth noting that one hour before today's listing of Changxin, he placed closing orders for short positions at 2-4.5 US dollars (approximately 13-30 yuan). This indicates that he believes the reasonable valuation of Changxin Technology is at most 2 trillion yuan.

In contrast, some on-chain whales who went long on Changxin made handsome profits. The address 0x2b6…32f6c had been continuously adding to CXMT long positions since July 23. According to hypurrscan data, this address currently holds 977,000 CXMT long positions, valued at approximately 6.77 million US dollars, with an average opening price of 6.71 US dollars (approximately 45 yuan). As of the time of publication, it has a floating profit of over 200,000 US dollars. This whale also holds 380,000 US dollars' worth of Hynix long positions.

Additionally, this whale placed closing orders for long positions at 7.1693-7.688 US dollars, indicating that they believe Changxin Technology's market capitalization can surge to over 3.4 trillion yuan again (with an intraday peak market capitalization exceeding 3.5 trillion yuan).

From a regional perspective on the long-short divergence, according to HyperInsight monitoring, on the eve of Changxin Technology's listing, attributable wallets on Hyperliquid showed that wallets from the United States, Hong Kong, and mainland China were generally bullish, while South Korean tagged wallets became the main force for shorting in this sample. South Korean wallets held about 760,000 US dollars in short positions, with the size of short positions being about 38 times that of long positions; Taiwanese tagged wallets were similarly bearish, with a net short of about 329,000 US dollars.

On the long side, US tagged wallets held 1.6 million US dollars in long positions with 345,000 US dollars in short positions, resulting in a net long of about 1.255 million US dollars; Hong Kong tagged wallets held 1.3 million US dollars in long positions with 431,000 US dollars in short positions, resulting in a net long of about 869,000 US dollars; while mainland Chinese tagged wallets only held 83,000 US dollars in long positions with 16,000 US dollars in short positions, resulting in a net long of about 67,000 US dollars.

If we assume that the 760,000 US dollars in short positions from South Korean tagged wallets were uniformly opened at 6.48 US dollars before the opening, with no adjustments afterward, and all calculated at 1x leverage, the theoretical floating loss would be about 48,500 US dollars, with a loss rate of approximately 6.4%.

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