  We present the Extreme-Horizon (EH) cosmological simulation: EH models galaxy
formation with stellar and AGN feedback and uses a very high resolution in the
intergalactic and circumgalactic medium. The high resolution in low-density
regions results in smaller-size massive galaxies at redshift $z=2$, in better
agreement with observations compared to other simulations. This results from
the improved modeling of cold gas flows accreting onto galaxies. Besides, the
EH simulation forms a population of particularly compact galaxies with stellar
masses of $10^{10-11}$\,M$_\sun$ that are reminiscent of observed ultracompact
galaxies at $z\simeq2$. These objects form mainly through repeated major
mergers of low-mass progenitors, independently of baryonic feedback mechanisms.
This formation process can be missed in simulations using a too low resolution
in low-density intergalactic regions.
