Stock market splits

Author: Prathik Desai, translated by Block unicorn

Introduction

A clock is not a cure-all for delay. For decades, financial markets have been built around the speed of information delivery that already exists. They introduced closing bells, batch settlement, and regional exchanges—reasonable measures in an era when information traveled slowly. But all of that has changed. Capital won’t wait. Just as water always finds a gap, so does capital. Financial gravity will pull it toward the fastest path to obtain price information. That’s the rule of the market. Market participants won’t tolerate inefficiency forever.

That’s what I’ve been seeing over the past few weeks while observing the evolution of financial markets from a macro perspective.

In today’s article, I’ll help you understand what is breaking the old, bundled structure of financial markets—turning it into a more efficient, unbundled structure that spans different locations, packaging, and time.

Switching desks

I’ve been learning finance for more than ten years. In the early stages of my education, I viewed traditional stock exchanges as synonymous with “the market.” For most of their development, exchanges have been where everything and everyone converges: buyers, sellers, regulators, and the technology that drives the market. There are indices that track constituent stocks, and clocks that indicate trading time—telling everyone when they can trade and when they can’t.

But that has changed in the past few years. In fact, just over the past few weeks, we’ve already seen multiple developments that confirm this shift.

On March 18, S&P Dow Jones Indices licensed the S&P 500 index to Trade[XYZ], allowing HIP-3 market deployers to launch the first and only S&P 500 perpetual derivatives contract on the Hyperliquid exchange. The S&P 500 index is the most closely watched U.S. large-cap index in the world, tracking 500 leading American companies that cover about 80% of the total U.S. market capitalization, with a market cap of more than $61 trillion. The index covers at least half the market value of global stock markets.

This is an index with nearly 70 years of history—yet it launched on a market that was formed only 6 months ago.

The second day after S&P announced the news, the U.S. Securities and Exchange Commission (SEC) approved Nasdaq’s application to trade and settle portions of stocks in token form. Nasdaq is one of the world’s most active trading venues; its reported trading volume is typically higher than the New York Stock Exchange (NYSE), the exchange with the largest market cap in the world.

On March 16, Cboe Global Markets filed a proposal with the U.S. Securities and Exchange Commission (SEC) to launch “near 24x5 U.S. stock trading.” The largest operating entity behind this U.S. financial exchange said it is ready to provide around-the-clock stock trading services as early as December 2026.

But why is that?

More and more people are demanding extended trading hours for U.S. stocks.

These three initiatives are jointly aimed at an outdated bundled trading structure. The S&P 500 futures trading market launched by Hyperliquid challenges the long-standing convention that investors can only trade traditional indices through traditional markets. It also makes it possible to trade one of the most closely tracked large-cap indices globally, 24/7.

Nasdaq’s tokenized stock trading initiative targets infrastructure. It introduces a new wrapping format that allows the same stock to be traded in different ways. Previously, attempts at tokenized stocks were criticized by the industry.

Investors questioned whether these tokens come with the same rights as the underlying shares.

But if I can provide the same equity exposure via tokens on a blockchain—and at the same time don’t give up the voting rights and legal protections that come with the original dematerialized shares—wouldn’t you accept it?

Why would you do it? What’s in it for you?

So what if you’re an investor outside the U.S. who wants easier access to the stock market of the world’s largest economy? And what if tokenized stocks make it easier to integrate them with collateral and lending systems?

When you factor in around-the-clock trading, these advantages multiply.

That’s what Cboe is taking issue with. Its near-24x5 trading plan—5 days a week, 24 hours a day—is designed to acknowledge that capital won’t wait for office hours. Traders always want to express their views immediately after receiving information. If Cboe doesn’t offer them a market to express those views, traders will flock to other platforms that do.

Everything I’ve said is not hypothetical, and it’s not “something that might happen sometime soon.” It’s happening—right now, as we speak.

A split future

In Hyperliquid’s HIP-3 market, the adoption of splitting financial products is most clearly reflected, as that market only officially launched in late October 2025.

Just in the past month, cumulative trading volume in the HIP-3 market increased by $72 billion. The cumulative volume for the previous four months was $78 billion.

In March, Trade[XYZ]’s perpetual markets for traditional financial instruments and stocks accounted for 90% of HIP-3 daily trading volume. But that’s not the most interesting part.

More than half of Trade[XYZ]’s trading volume comes from perpetual contract markets for silver, crude oil, Brent crude, and gold.

Hyperliquid provides a unified trading platform for trading spot crypto as well as perpetual contracts on crypto and traditional assets. This not only streamlines the trading process on a single platform, but also delivers higher liquidity, a unified user interface, and tighter bid-ask spreads.

Traders still want to trade some of the largest and most popular assets, covering commodities, listed companies, large private firms, and indices. You might want to trade silver, gold, crude oil, Tesla, Apple, Amazon, Google, an index tracking the top 100 non-financial U.S. companies, and the S&P 500 index—everything can be done on the Hyperliquid platform.

HIP-3 decouples the ability to invest in these assets from existing exchange infrastructure, while still tracking their underlying benchmark assets. So when you go long silver futures contracts on HIP-3, the underlying asset it tracks is still tied to the value of an ounce of silver from the Pyth data source.

Traders move from prior platforms to trade silver on HIP-3 because HIP-3 doesn’t distinguish between U.S. and non-U.S. traders, and it doesn’t follow any specific schedule. Whenever there’s an event where traders want to express their views through asset pricing, HIP-3 provides markets for them—without regard to traders’ location or time zone.

Over the past few weeks, open interest (OI) on the Hyperliquid platform has grown significantly, fully reflecting the results above. OI measures the total value of open derivatives positions. Unlike trading volume, which reflects trading activity, OI reflects trading commitment.

On March 1, open interest was $1.13 billion. By April 1, it doubled to $2.2 billion. This shows traders have confidence in Hyperliquid’s perpetual contracts and are locking in capital.

These metrics show that when market access becomes easier and friction is reduced, traders won’t stay loyal to a particular platform or asset class. They will choose any platform that offers volatility, convenience, and liquidity.

That’s why traditional institutions like S&P, Nasdaq, and Cboe are taking steps to acknowledge this behavior.

At least two recent events show how important around-the-clock trading and market volatility are to traders.

In a tweet on Decentralised.Co, Saurabh wrote: “On February 28, the U.S. and Israel attacked Iran while traditional markets were closed. Within hours, the price of oil-linked perpetual contracts on the Hyperliquid platform jumped 5%, because traders digested the shock in real time.”

Just two weeks after the outbreak of war, the trading volume of oil-linked perpetual contracts surged from $200 million to a cumulative $6 billion.

One major risk for emerging platforms is liquidity. If liquidity is insufficient, bid-ask spreads can widen, putting traders at a pricing disadvantage that can be worse than on other platforms.

The Hyperliquid platform demonstrated its strong liquidity last week while U.S. President Trump was in negotiations with Iranian officials for “productive talks.” The newly launched S&P 500 index futures based on the HIP-3 platform can precisely track the movement of CME E-mini S&P 500 index futures, down to the minute.

Even though on-chain perpetual contracts trade about 50–70 points lower than ES, the magnitude of price moves is very similar.

What does that mean

For decades, traditional markets have been bundled together, controlling venues (exchanges), time (trading sessions), and products (indices/contracts).

They maintained the status quo because they failed to build the corresponding mechanisms to address inefficiencies such as time delays, limits on trading hours, and regulatory restrictions on non-U.S. investors. Instead, they covered up these inefficiencies and packaged them into procedural institutional arrangements designed to build “trustworthy” institutions—so as to attract investors.

People will continue to trade and invest. This isn’t because they’re foolish or easily swayed by all the talking points traditional financial markets sell them. They do it because they have no choice. This began to change after blockchain arrived—blockchain gives the world on-chain markets, making trading and investing more convenient than ever.

People saw this option—and they took it.

In the past, they didn’t care, and in the future, they won’t care either about changes to market structure. Whether the new structure is bundled or unbundled doesn’t matter to them. Whether existing institutions are willing or not, as long as traders and investors can express their views more conveniently through financial instruments, they’ll accept the new market structure. As for whether that structure comes from traditional giants like Nasdaq, Cboe, or S&P 500, or from permissionless platforms running on blockchain, that’s beside the point.

The financial industry continues to evolve and will adopt whatever structure can narrow the gap between events happening and the expression of price views.

Major events happen everywhere, all the time. So why should prices wait until the clock in some glass office building in New York starts ticking on Monday morning to get set?