The on-chain Pre-IPO era has arrived, how are various encryption companies positioning themselves?

In June this year, the internet brokerage giant Robinhood launched a new service for European users, offering trading opportunities for "stock tokens" of top private unicorn companies like OpenAI and SpaceX. Robinhood even airdropped a small amount of OpenAI and SpaceX tokens to eligible new users as a draw attention.

However, this move was immediately opposed by OpenAI. The official OpenAI account clarified on X, "These OpenAI tokens do not represent OpenAI equity, and we have no partnership with Robinhood." Below this message, Elon Musk did not directly comment on Robinhood's tokens, but he retweeted and commented on OpenAI's statement, sarcastically saying, "Your own 'equity' is the real fake." This ridicule not only mocks OpenAI's capital operations after becoming a profit-driven organization but also indirectly points out the strong resistance of unlisted companies to the stripping of their 'pricing power' over such shares.

Despite the skepticism, the attempts of traditional brokers reflect the strong market interest in on-chain Pre-IPO asset trading. The reason is simple: the huge dividends of the primary market have long been held by a few institutions and high-net-worth individuals, and the valuations of many star companies have shown explosive growth when going public (or being acquired). Taking the design software company Figma as an example, after failing to complete its acquisition by Adobe due to antitrust reasons, Figma went public independently in 2025, with an issuance price of $33 per share, and its closing price on the first day soared to $115.5, an increase of 250%; this price corresponds to a market value of nearly $68 billion, far exceeding the $20 billion valuation during Adobe's acquisition talks. Another example is the recently listed cryptocurrency exchange Bullish, which surged 290% after its opening. These cases indicate that investing in such companies before going public may yield returns of several times or even dozens of times. However, traditionally, it is relatively difficult and complex for ordinary investors to participate in such opportunities. The ability for retail investors to share in the value-added dividends of future star companies going public in advance through blockchain is precisely what makes the on-chain Pre-IPO concept appealing.

The scale and barriers of the private equity market

In the past few decades, the global private equity market has been large and rapidly growing, yet highly closed off. According to a study by Yann Robard, a partner at Dawson Management, in the article "Why Private Equity Wins: Reflections on a Quarter Century of Outperformance," the value created by the private market over the past 25 years is about three times that of the public stock market during the same period. Many excellent companies delay or even bypass going public, securing billions of dollars through multiple rounds of private financing. For example, OpenAI received $6.6 billion in investments from Microsoft, SoftBank, and others in October 2024, and completed a massive financing round of $40 billion in March 2025, becoming the largest private financing case in history. With ample private funding, many companies can remain private for a long time or not go public at all. The result is that a huge growth dividend has already been generated before the companies go public, but only institutional investors can participate in these gains, while ordinary people are completely excluded.

A comparison chart of value creation in the private equity market versus the public stock market over the past 25 years, source: Dawsonpartners

Traditionally, a few secondary trading platforms aimed at wealthy investors (such as Forge and EquityZen in the United States) have provided limited channels for transferring Pre-IPO shares. However, these platforms generally adopt a peer-to-peer matching model, with high trading thresholds, usually only targeting accredited investors, requiring minimum investments often starting at several tens of thousands of dollars. This OTC model leads to poor market liquidity, a lack of pricing discovery mechanisms, and low trading efficiency. Moreover, many unicorn companies have highly restrictive provisions on share transfers, and employees or early shareholders often need company approval to sell their shares.

Under the existing regulatory framework, the secondary market for private equity is almost closed to ordinary investors. However, this barrier is gradually opening up some "gaps". For example, in June of this year, the Nasdaq Private Market (NPM) launched Tape D, which is a real-time dataset of private companies that enhances price transparency and valuation visibility for private and pre-IPO companies. Users can access the desired information through API interfaces. This also provides a relatively fair environment for "oracles".

The Pre-IPO market has not appeared for the first time in the crypto space. Over the past few years, limited by technological performance, regulatory environment, and insufficient investor education, this model has struggled to scale. However, the situation is gradually maturing, with significant improvements in blockchain scalability and user experience, and increasingly complete infrastructure such as custody and KYC/AML. At the same time, AI and crypto companies are frequently approaching IPO milestones, providing new narratives and investment demands for early involvement in these high-growth targets. Compared to locking funds solely in highly volatile crypto assets, Pre-IPO tokenized products not only offer speculation but also provide structured and predictable exit paths, attracting more funds seeking diversified allocations.

More importantly, millennials and Generation Z are becoming the main force in investments. They tend to invest directly, trade frequently, and actively seek high-potential private equity opportunities, such as SpaceX, OpenAI, and Anthropic. However, within the traditional framework, they can barely access these transactions. If the Pre-IPO market can leverage on-chain tokenization to slice unlisted equity into small units that allow low-barrier participation and introduce a transparent secondary liquidity mechanism, it will have the opportunity to provide these young investors with a cost-controlled, self-managed investment entry that aligns with their values, while also bringing an unprecedented global retail incremental capital pool to private equity.

Compared to the Gen Z and millennial groups, they are more inclined to invest rather than putting money into pensions. For more detailed data from multiple dimensions, see: Jarsy's Medium research report.

Through tokenization, originally expensive and scarce unlisted equity can be split into small digital tokens and traded on the chain 24/7. Smart contracts can also automatically execute rights such as dividends and voting, enhancing transparency and efficiency. More importantly, if these tokens can be traded on DEX or compliant platforms, market makers and liquidity pools can provide continuous quotes, avoiding the liquidity shortage of pure peer-to-peer trading. Theoretically, private equity tokenization can allow global retail investors to participate in the growth of top private companies with a very low threshold, and improve the price discovery mechanism, making pricing more market-oriented and transparent.

Of course, the grander the vision, the more constrained the reality becomes. The complexities of traditional regulation, the resistance from private companies, and the intricacies of technological integration are all unresolved challenges on the current path of tokenization. Nevertheless, over the past year, with the shift in policy direction, we have seen a wave of projects exploring on-chain Pre-IPO trading emerge. Some focus on derivatives and leveraged trading, while others concentrate on the tokenized transfer of real equity.

On-chain transactions before IPO

This category of platforms focuses on the trading experience, often not directly holding the actual equity of the underlying companies but allowing users to bet on the valuation fluctuations of unlisted companies through derivatives or other mechanisms. The advantage is a low entry barrier and no complex equity delivery processes involved; however, the challenge lies in the pricing basis and compliance risks.

Ventuals**: The "Pre-IPO perpetual contract" that can open 10x leverage on Hyperliuqid**

Ventuals is a new project incubated by Paradigm, founded by Alvin Hsia, who is also a co-founder of the recently popular content platform Subs.fun. Previously, he collaborated with Paradigm as an Eir (Entrepreneur in Residence) to incubate the end-to-end data platform Shadow.

Ventuals aims to allow users to trade perpetual futures of unlisted companies on the Hyperliquid blockchain. This model is similar to contract trading commonly seen in the cryptocurrency market, but the underlying asset is replaced with a valuation index of popular startups. The core advantage of Ventuals is that it does not require holding the underlying stocks to provide a trading market, making it more akin to prediction platforms like Polymarket. Of course, this also enables it to bypass many traditional securities regulatory requirements (such as identity verification, qualified investor status, etc.).

The platform creates custom perpetual contract markets through Hyperliquid's HIP-3 standard and uses an "optimistic oracle" mechanism to obtain valuation data: anyone can submit data on the valuation of a company and stake collateral; if no one challenges it, the price takes effect; if there is a dispute, it is decided through on-chain voting. This mechanism brings on-chain the consensus on private placement valuations that were originally difficult to obtain, providing a basis for pricing.

The pricing method of Ventuals is also interesting; it does not directly adopt the stock price from the company's latest round of financing, but instead anchors the token price by dividing the company's valuation by 1 billion. For example, if OpenAI's latest valuation is 350 billion dollars, then the initial price of 1 vOAI token is set at 350 dollars. This design lowers the trading threshold and makes the price number look intuitive. However, the problem lies in the fact that the valuations of private companies are extremely opaque and updated infrequently, mainly relying on occasional financing or secondary trading information. Although Ventuals has introduced technologies such as oracle + EMA (Exponential Moving Average) to smooth prices, the information asymmetry remains a major issue: when the underlying data is delayed or even distorted, derivatives trading based on this can also amplify market volatility. Platforms like Polymarket that utilize oracles have encountered problems caused by these flaws to varying degrees, and when the volume is larger, the rapid trading process may lead to greater troubles for Ventuals.

Thanks to the founding team that used investors' money to buy Ferraris, the market valuation has plummeted, source: Ventuals

As a trading platform, Ventuals' biggest selling point is the opportunity to go long or short with up to 10 times leverage, allowing users to "bet small to gain big." However, the platform is still in the testing phase (only running on the testnet). Ventuals is taking a completely decentralized derivatives approach, aiming to create a global Pre-IPO exchange without the need for trusted intermediaries through high-performance on-chain matching (Hyperliquid's ability to handle 100,000 orders per second). Of course, the compliance challenges it faces are still enormous; although it does not hold actual shares, these contracts essentially bet on securities prices and may still be viewed as securities derivatives by regulators. Additionally, who provides liquidity and who ensures the accuracy of the oracle remains unknown.

Earlybird**: Pre-IPO Long/Short Market on Solana**

Earlybird was created by the team behind the NFT marketplace Hyperspace on Solana (which ceased operations in 2024, and even Twitter was directly renamed from Hyperspace to Earlybird). It similarly focuses on allowing users to "go long or short on companies before IPO," positioning itself as the next-generation private equity trading platform aimed at retail investors. The team has received investments from top crypto venture capitalists (such as Dragonfly and Pantera) and has accumulated experience in the Solana NFT space, now shifting to the Pre-IPO track.

It seems that the prices given by the oracles of the two platforms are a bit different, and it's unclear whether this will be fixed after launch. In the future, bringing in polymarket may allow for multi-platform arbitrage.

The founding team of Earlybird includes Kamil Mafoud and Santhosh Narayan, co-founders of Hyperspace. It is said that after Hyperspace shuts down its NFT business in 2024, this team began to focus on the development of Earlybird. In fact, for them, the "Pre IPO platform" may be more at ease than the "NFT platform"; both have work experience at Morgan Stanley and have been investment analysts for many years, and connections on Wall Street may be more important in this field than those in cryptocurrency.

The specific product form of Earlybird has not been fully disclosed yet (the platform is still in the application-based closed testing phase), but you can experience the product by entering from the Dev testnet (there will be a $10,000 trial fund lol). From its promotion, it is likely similar to Ventuals, utilizing on-chain derivatives or simulated assets to allow users to bet on the valuation fluctuations of unlisted companies. The high-speed and low-fee on-chain environment of Solana is also suitable for building real-time trading markets. The team may adopt an order book or AMM market-making mechanism to provide more continuous liquidity than traditional OTC. It is worth mentioning that there have already been practices of similar Pre-IPO asset trading on Solana, such as PreStocks, as well as earlier on-chain US stocks (like the now-defunct mStock synthetic asset on Mango Markets).

The trading logic of Earlybird, source: @0xprotonkid

From a market positioning perspective, Earlybird may take a relatively open and decentralized approach, with relatively lenient restrictions on user regions and qualification requirements. In short, Earlybird is an active explorer of the Pre-IPO track for the Solana camp. Like Ventuals, it has chosen the idea of "not touching real equity and achieving the market through derivatives". Its success or failure largely depends on whether it can solve the two core issues of valuation pricing and compliance risk control.

PreStock** (back by Republic): The "good kid" in equity Token trading platforms**

Compared to the "light asset" model of Ventuals and Earlybird, PreStocks is closer to the traditional concept of stock trading, only it has moved onto the blockchain. PreStocks was founded by a team from Singapore and is backed by the established private equity platform Republic Capital, holding shares in real private companies through special purpose vehicles (SPV) and issuing 1:1 pegged Tokens.

In simple terms, if PreStocks buys a batch of original shares of OpenAI through an SPV, it will mint "pOPENAI" tokens on Solana at a ratio of one token for each corresponding share for users to trade. Each token is backed by real stocks, allowing investors holding the tokens to enjoy nearly the same economic rights as holding shares (such as capital gains from rising stock prices, future IPO liquidity, etc.), but without direct legal shareholder status or receiving dividends.

PreStocks currently supports token trading for 22 private companies, including well-known unicorns like OpenAI and Canva. Users only need a Solana wallet and can buy and sell these tokens for as little as a few dollars, without investment threshold restrictions. Tokens on PreStocks can be freely transferred on-chain, traded or lent on DEX platforms, and can even provide liquidity to earn trading fees or be used to build new structured products. PreStocks integrates the Jupiter aggregator and Meteora market maker, enabling 7×24 hour trading and instant settlement.

To ensure that each Token has real stock backing, PreStocks is held by a regulated custodian that holds the underlying stocks and commits to regularly disclosing audit reports. However, the team has not yet publicly released detailed proof of holdings, merely claiming that all Tokens are 100% fully collateralized. Given the compliance pressures associated with equity in unlisted companies, PreStocks has blocked users from major jurisdictions such as the United States (KYC is not required for trading on-chain, but KYC is necessary for minting or redeeming PreStocks). The company's choice to register in Singapore is also due to the relatively lenient regulations.

The founder of PreStocks, Xavier Ekkel, once stated that his vision is to make private equity investment as simple as trading public stocks. PreStocks has indeed weakened the monopoly of the traditional secondary market to some extent by providing retail investors with zero-threshold access to unicorns. However, this model also has obvious limitations. The first is liquidity: due to the limited source of shares for each company (currently, the market value of a single company's Token on the PreStocks platform is usually only a few hundred thousand dollars), the market depth is very shallow, and large buy and sell orders will impact prices. In contrast, well-established secondary institutions like Forge handle median transaction sizes exceeding 5 million dollars and possess institutional-level order management systems. The trading system of PreStocks would require a broader user base to support its construction.

Secondly, its expansiveness is also limited due to the "1:1 shareholding" requirement. For each new target, PreStocks must negotiate offline to purchase real stocks, which requires communication with sellers (employees, VCs, funds, etc.) on a case-by-case basis. This process is lengthy and subject to the willingness of the target company's management. Furthermore, PreStocks itself is not a licensed securities exchange and operates more in a gray area. If the regulatory agency's attitude changes, the platform may be forced to limit or withdraw related assets.

Overall, PreStocks has adopted a more pragmatic approach than derivatives, using real money to "buy a path" for retail investors. Its advantage lies in better protection of investors' rights (with real shares backing, future IPOs can achieve actual payouts), but the disadvantage is high operational costs and significant compliance challenges. The author believes that Repuic aims to develop PreStocks into a "high liquidity trading platform" for the distribution of its mirrored Token, as it operates according to Reg CF rules, limiting investments to $5,000 and requiring a one-year lock-up. At the same time, the liquidity and "lock-up" restrictions on the compliant centralized trading platform INX they acquired contradict the original intention of the product, hence the choice of the "roundabout" path of PreStocks.

Focus on real equity Tokenization platform

This category of platforms directly offers end investors the opportunity to purchase equity in unlisted companies, essentially representing an on-chain securities issuance or private equity crowdfunding. They typically require holding or locking real stocks, using tokens as proof to allow investors to share in future profits. This model is closer to traditional finance, but it leverages blockchain for registration and circulation, thus is often operated by traditional financial companies or Fintech firms.

Jarsy**: A group buying website for equity Token**

Among the many Pre-IPO projects, Jarsy has made solid progress step by step. It quietly launched on the Arbitrum network in 2024, and the company behind it, Jarsy, Inc., is headquartered in San Francisco, USA. It was founded by Hanqin, Chunyang Shen, Yiying Hu, and others, with a founding team that includes former Uber China executives and the engineering head of Afterpay, all of whom have a deep understanding of internet product operations and regulation. It has secured a $5 million investment from institutions like Breyer Capital, with notable investors including Mysten Labs CEO Evan Cheng, Anchorage CEO Nathan McCauley, and Huma Finance CEO Richard Liu. Jarsy's mission is to "democratize private equity investment through blockchain," providing ordinary investors with a channel to purchase equity in unicorn companies through strict 1:1 physical asset backing.

The operating model of Jarsy is to first release Pre-IPO equity products of target companies on the platform, allowing users to subscribe in advance (paid in USDC or USD). Once a certain subscription amount is reached, Jarsy negotiates with venture funds, early shareholders, or employees holding shares of the company to acquire a certain number of real equity with the raised funds. If the acquisition is successful, tokens equivalent to the actual number of shares are minted and distributed to investors; if the negotiations fail or fundraising is insufficient, the funds are refunded through the original route. This process is similar to traditional private placement share transfers, but it leverages the crowdfunding idea of "raising funds before purchasing" and uses on-chain tokens as proof of rights.

Jarsy will also custody all held stock assets in a dedicated SPV (Special Purpose Vehicle) and provide a real-time on-chain reserve proof page for inquiries. Each Jarsy Token purchased by investors (such as JSPACEX representing SpaceX shares) corresponds to a real stock as support. Although token holders are not the legal shareholders of the company, they enjoy economic rights almost equivalent to holding shares, including monetization during future IPOs, compensation during acquisitions, and even possible dividend earnings. This also makes Jarsy different from the other projects mentioned above, resembling more of a private equity "group buying website."

However, Jarsy has significantly lowered the participation threshold, with a minimum investment of only 10 dollars. Even more commendably, global users, except for U.S. investors, can participate without the need for accredited investor certification. Jarsy has also optimized the user experience of Web2, with a process that supports email registration and fiat payments, creating a custodial wallet for users, making it almost imperceptible to feel the complexity of blockchain when purchasing Tokens. Jarsy places greater emphasis on compliance and usability, attempting to build a bridge product of "Web2 interface + Web3 backend." Since its launch, Jarsy has introduced tokenized equity from star companies such as Anthropic, Stripe, and Perplexity AI, with many products being sold out immediately upon release.

Of course, the Jarsy model still faces two major challenges. The first is liquidity, as the supply of each token in Jarsy depends on the actual number of equity shares obtained, and private equity itself lacks publicly marketable pricing. When large holders who possess a significant amount of tokens sell off, it can easily lead to a price crash or a lack of buyers. Currently, the largest stocks held by Jarsy are X.ai (approximately $350,000), Circle ($490,000), and SpaceX ($670,000), none of which are particularly large. In such a shallow market, a sell order of several tens of thousands of dollars could potentially crash the price, resulting in clearly insufficient trading depth.

Secondly, there is the expansion bottleneck problem that any project with "real holdings" will encounter. The effort required for Jarsy to add each new asset is far greater than that of a "derivative model platform", and it has extremely high demands for connections and resources. Furthermore, although Jarsy claims to "prioritize compliance", it still provides unregistered security tokens, which carries uncertainty under the U.S. regulatory environment. However, Jarsy has proactively partnered with top law firm WSGR (Wilson Sonsini, Goodrich & Rosati) to plan a compliance route, indicating its intention to seek regulatory exemptions or approvals, which may be more attractive to institutions in the current compliance environment.

As the CEO Han Qin said, "We founded Jarsy to bring private investment opportunities that have long been monopolized by institutions to ordinary people." Although there are challenges such as liquidity and compliance on the road, Jarsy has already taken an important first step and is one of the few "equity tokenization platforms" that is relatively compliant currently. With user growth and asset scale expansion, if it can gradually gain regulatory recognition, it is not excluded that its Token may circulate in the compliant secondary market in the future, allowing "Pre-IPO equity" to truly become a public asset class.

Opening Bell**: Pioneer of Traditional Stock Chain Reform**

The Opening Bell platform launched by Superstate provides another path for companies to move their shares onto the blockchain directly. Unlike the aforementioned projects where a third party buys shares and issues tokens, here the company itself becomes the issuer. In May 2025, Superstate, a compliant fintech company founded by Compound founder Robert Leshner and others, announced the launch of Opening Bell, allowing stocks already registered with the SEC or eligible private companies to conduct 24/7 on-chain trading via the Solana blockchain. In simple terms, publicly listed companies or private companies can issue on-chain versions of stock tokens on the Opening Bell platform and ensure that these tokens represent actual legal equity (not Mirror token derivatives).

The first practitioners of this model include Nasdaq-listed company Upexi (stock code UPXI) and Canada's SOL Strategies, while Galaxy Digital, which was recently in the spotlight due to its Ethereum coin stock company, is also involved (however, only the SOL Strategies case has not yet been listed on Nasdaq). This requires a strict legal framework, for example, Superstate has already registered as a digital transfer agent in the United States to ensure that the on-chain shareholder registry is synchronized with traditional registries.

The emergence of Opening Bell marks a further integration of traditional finance and blockchain. Through this platform, company stocks can be traded in real-time 24 hours a day, providing unprecedented flexibility and transparency, making stocks "always on" like cryptocurrencies. Private companies also have the opportunity to leverage Opening Bell to gain liquidity in advance, as some companies that are planning to go public or are not in a hurry for an IPO can completely reach global investors by issuing on-chain stocks for financing or shareholder monetization. Superstate clearly states that the target customers of Opening Bell include both listed companies and late-stage private companies seeking liquidity.

Of course, the advancement of this model still requires the nod from regulatory authorities. Currently, the on-chain plans announced by companies such as SOL Strategies have submitted application documents to the SEC, but all note that they are "subject to regulatory approval." At least in terms of trends, regulatory agencies seem to be showing a more open discussion attitude towards asset tokenization. The U.S. SEC will hold a special roundtable in 2025 to discuss securities tokenization, and even traditional giants like Blackstone's CEO and Robinhood's CEO have publicly expressed their support. Superstate itself has already had successful experiences in stablecoins (USTB) and on-chain national debt funds, and now expanding into the stock field is quite timely.

Regarding Pre-IPO, Opening Bell offers a possible path for a quasi-IPO, allowing companies to bypass the lengthy traditional IPO process and to achieve public trading of stocks during the private placement stage using blockchain. For example, a unicorn company can first issue a portion of its equity tokens for trading on Opening Bell, and then formally IPO or directly merge when conditions are ripe. This is somewhat similar to the past OTC market, but with the advent of on-chain technology, transparency and efficiency have greatly improved.

From a certain perspective, if this model is recognized, future IPOs may no longer require Wall Street underwriters, but rather be completed on-chain. From this perspective, Superstate is like "Binance Alpha" of Nasdaq.

Has the era of investment democratization arrived?

Make investment opportunities in unlisted companies more open and efficient. This is undoubtedly an exciting trend for the majority of ordinary investors. From the perspective of wealth opportunities, it helps to narrow the gap between the general public and institutional investors. However, the on-chain Pre-IPO field currently still presents both opportunities and risks. "Regulatory compliance" and "the target company's resistance" are the sword of Damocles hanging over such projects.

Embracing regulation and collaboration should be the main direction for on-chain Pre-IPO trading. More and more traditional financial institutions and investors are actually showing interest in this field. For example, the Hong Kong Stock Exchange and Nasdaq are researching tokenized securities; well-known VCs may consider collaborating with these platforms to release part of their shares on-chain for circulation without affecting control over the company. This new paradigm of LP and GP cooperation, if successful, is expected to greatly accelerate the popularization of private equity tokenization. There is no doubt that on-chain Pre-IPO trading is a promising new blue ocean. The "Trojan Horse" of freely trading unlisted equity could ultimately open the "gates" of the capital market's ultimate form, and perhaps we are just a few steps away from those gates.

Source: BlockBeats