Original | Odaily Star Daily (@OdailyChina)

Author | Asher (@Asher_ 0210)

On May 2, Hyperliquid launched HIP-4 Outcome Markets on the mainnet, officially introducing outcome markets to its on-chain trading system. The first to go live is the BTC intraday binary outcome contract, where users can trade based on whether the BTC price at a specific moment exceeds a designated price. The contract price fluctuates between 0.001 and 0.999, corresponding to the market pricing of the event's occurrence probability; it settles to 1 if the event occurs and to 0 if it does not, with contracts fully collateralized by USDH and no fees charged for opening positions.

This is not a simple product expansion. In the past, Polymarket resembled an information market centered around events, where users entered specific markets related to elections, sports, geopolitical conflicts, or cryptocurrency hot topics, expressing their judgments about outcomes through pricing; Kalshi attempted to place event contracts within a clearer compliance framework.

Hyperliquid's approach is different. It does not first build an independent prediction market and then attract users to move funds; instead, it directly enters through the trading scenarios it knows best—bringing outcome contracts and perpetuals, along with spot trading, into the same trading environment. For Hyperliquid, the prediction market is not just about betting on an outcome, but a new tool for traders to express direction, manage risk, and build strategies.

The first battle of the BTC intraday market is a success, with first-day data exceeding expectations

The first market of HIP-4 is a daily settlement market for BTC price performance. This choice itself is very “Hyperliquid”—not starting from political, sports, or entertainment events, but first focusing on the BTC price fluctuations familiar to cryptocurrency traders.

On the first day of its launch, HIP-4 achieved impressive data. According to Predictefy's disclosure, on the first day of launching event contracts, the trading volume of BTC price-related event contracts on Hyperliquid reached 6.15 million dollars, far exceeding similar markets on Kalshi, Polymarket, and other prediction markets. In other words, focusing solely on the BTC price-related event contracts segment, Hyperliquid ranked at the absolute forefront on its first day.

Data source: Predictefy

Furthermore, the total trading fees on the first day of HIP-4 launched exceeded 12,000 dollars, with more than 54,000 transactions and over 3,000 participants. For a recently launched prediction market related to events, this set of data is already impressive; it didn’t come from opening up a large number of event categories, but completed a cold start within the single BTC intraday market, making the first step of HIP-4 even more substantial.

Why HIP-4 is not simply an improvement on HIP-3

Hyperliquid had previously supported Builder in deploying perpetual contract markets through HIP-3. So the question arises, since perpetual markets can already be deployed, why is there a need to design HIP-4 separately? The answer lies in the completely different settlement logic of outcome contracts.

Perpetual contracts require continuous pricing, and oracle prices can be gradually adjusted; however, binary outcome contracts can ultimately only settle to 0 or 1. If the oracle mechanism unsuitable for binary contracts is used, there may still be a long erroneous pricing window after the event result has been determined, creating nearly risk-free trading opportunities for arbitrageurs.

Thus, HIP-4 is designed as a separate outcome market primitive. It is not a rebranded perpetual, but specifically serves the contract types involving expiration, settlement, disputes, and Oracle result confirmations. To ordinary users, the prediction market seems like just buying Yes or No; but for a real trading system, the actual challenges involve how the event is defined, who confirms it, when it settles, how disputes are handled, and how erroneous outcomes are corrected and penalized. The core of the prediction market is not just the front-end interface and trading entry, but the settlement mechanism itself.

Hyperliquid, Polymarket, and Kalshi each have their battlegrounds

If we look at the HIP-4 launched by Hyperliquid alongside Polymarket and Kalshi, the three represent three directions of prediction markets:

• Polymarket's core advantage is event richness and user mindset: it excels at turning complex events into tradable questions, merging public interest, media dissemination, and market probability. Political elections, geopolitical conflicts, celebrity events, sports competitions, cryptocurrency project milestones can all quickly become markets.
• Kalshi's advantage lies in its compliance pathway: it is closer to the event contract platform in traditional financial contexts, with target users and regulatory frameworks that differ from those of Polymarket and Hyperliquid. Recently, discussions around regulatory authority for prediction markets in the U.S. have escalated, highlighting that event contracts are no longer fringe products, but are entering core discussions in financial regulation.
• Hyperliquid’s advantage is in trading experience and capital efficiency: Hyperliquid has its own L1, HyperCore matching engine, on-chain order book, and spot and perpetual infrastructure. Official documentation shows that HyperCore includes a fully on-chain perpetual and spot order book, where orders, cancellations, trades, and settlements are transparently executed, with a processing capacity of 200k orders/second.

Therefore, Hyperliquid may not necessarily steal all users from Polymarket in the short term. A lightweight user interested in the U.S. elections, sports events, or entertainment gossip may not enter the trading interface of Hyperliquid just to buy an event contract. However, a trader who was already using Hyperliquid for BTC, ETH, gold, crude oil, or stock perpetuals might naturally consider the BTC intraday outcome contract as part of their portfolio.

HYPE may become the value capture tool in this competition

HIP-4's significance for Hyperliquid goes beyond adding a new trading scenario; it also further binds the prediction market to the staking, fees, and repurchase mechanisms of HYPE. According to the design of HIP-4, the first phase involves validators deploying standardized markets, and the second phase will open up permissionless deployment. In the future, if market creators wish to create their own prediction markets, they will need to stake 1 million HYPE coins. Each staked position can support rolling and periodic markets and can be reused after settlement; if issues arise such as oracle manipulation, abnormal market conditions, or prolonged outages, the staked assets may be confiscated.

This threshold is significantly higher than the 500,000 HYPE of HIP-3. The reason is not hard to understand; outcome markets rely more on event definitions and Oracle settlements than perpetual markets. The prices in perpetual markets can be continuously adjusted, but in outcome markets, there are only 0 and 1; once a settlement error occurs, it not only damages the trading experience of a specific market but also undermines the credibility of the entire prediction market.

For HYPE, HIP-4 brings two layers of incremental demand. First is the staking demand. More Builders wanting to deploy outcome markets will need to lock up more HYPE. Especially as categories like sports, macros, politics, cryptocurrency events, and entertainment gradually open up, quality market creation rights may become a high-threshold operational privilege. The second is the fee and repurchase logic. Hyperliquid already possesses strong trading volume and fee capture capabilities; a large portion of the protocol fees will be used to repurchase HYPE. If HIP-4 can bring new trading volume, the outcome market will not just be an additional feature, but will become part of the fee growth and HYPE repurchase flywheel.

This is also a significant difference between Hyperliquid and Polymarket, Kalshi. The growth of Polymarket and Kalshi is reflected more in the increase of platform trading volume, market share, and brand influence; whereas Hyperliquid's growth will more directly map to the demand for HYPE and value capture.

The market is optimistic, but HIP-4 still needs to prove itself

The market feedback on HIP-4 is relatively optimistic, and the reasons are not complex. Hyperliquid already has a mature trading infrastructure, active trading users, and a clear value capture mechanism for HYPE. It does not need to rebuild the matching system nor start from scratch to find the first batch of traders.

But HIP-4 is still in a very early stage. Currently, the market is still focused on BTC price outcomes, and whether it can expand to more categories such as sports, politics, macro, cryptocurrency events, and entertainment will depend on whether the permissionless deployment in the second phase can be successfully advanced. At the same time, outcome markets have higher requirements for oracles and settlement mechanisms; event definitions, data source selections, dispute handling, and erroneous settlements will all directly impact market trust.

Therefore, the significance of HIP-4 is not that Hyperliquid has already won in the prediction market, but that it provides a new competitive direction for this field. Polymarket has demonstrated that events can become information markets, Kalshi represents the path of compliant event contracts, while Hyperliquid aims to prove that event contracts can also become part of on-chain trading systems.

If in the past, the competition in prediction markets was about who could capture more hot events and attract more users to bet, then after HIP-4, the competition begins to add another dimension: who can truly integrate event outcomes into traders' funds, positions, and strategies.

This also means that Polymarket's competitors are no longer just Kalshi. With Hyperliquid entering the arena, the next stage of prediction markets may not just be competition between event markets, but competition among trading systems, liquidity, and asset pricing capabilities.

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