Hyperliquid (HYPE), one of the fastest-growing decentralized exchanges in crypto, is moving into prediction markets with a proposal aimed at competing with Polymarket and Kalshi.
Bloomberg reported Wednesday that Hyperliquid is testing a new system upgrade called HIP-4, designed to let traders bet on real-world outcomes on a platform that has gained attention for how quickly and aggressively it has expanded.
Hyperliquid Tests HIP-4 Prediction Markets
HIP-4 is currently in public testing, and its focus would be prediction-style contracts rather than Hyperliquid’s traditional core product: perpetual futures.
Perpetuals are derivative contracts with no expiry that typically involve significant leverage, meaning they carry a higher risk profile, especially during volatile price moves that can trigger forced liquidations.
Prediction markets, by contrast, would be built on simpler contract mechanics. For example, if a market were created around whether US inflation in July would exceed 3.5%, the structure would generate two tokens—one representing each possible outcome.
Traders could buy or sell either side, and whichever token corresponds to the correct outcome would settle at a fixed value once the result is known.
A major difference highlighted in the reporting is that these proposed prediction contracts would not rely on leverage. That could reduce the likelihood of liquidation events that frequently disrupt leveraged positions in crypto trading.
Sunny Shi, an investor at Syncracy Capital, suggested the design could change how sophisticated traders approach these bets. He said that HIP-4 would enable traders to take advantage of portfolio margin and find ways to generate “alpha” from the relationship between different market types.
In his view, the approach would be different from platforms where most activity can look like straightforward, single-sided wagering. He pointed out that what is possible elsewhere may be hard to replicate on Polymarket or Kalshi, where much of the activity today is “just like single-sided betting.”
What’s Clear, What’s Not
What Hyperliquid is proposing is distinct from that of Polymarket and Kalshi in at least two ways. First, the prediction product would be native to a trading venue where users are already active, including across crypto and commodities—meaning it may gain distribution without needing to build a brand-new audience.
Second, the prediction contracts would sit inside Hyperliquid’s existing trading system. The implication is that a single trader could potentially manage event bets and other exposures within one account.
Still, Bloomberg notes that important details are still unclear, including how Hyperliquid would decide which real-world events qualify for new contracts, what governance process would be used to approve markets, and when HIP-4 might move from testing to a full public launch.
HYPE Technicals In Focus
Hyperliquid’s broader momentum may be part of why its prediction-market bid is getting attention. Its native token, HYPE, has been among the top-performing assets, though it has retraced about 11% below the $40 level over the past fourteen days, according to CoinGecko data.
While the broader crypto market—led by Bitcoin—has experienced a drawdown since October, with a near a 50% crash, HYPE has retained gains. The token is up roughly 110% year-to-date, even as it remains about 33% below all-time highs of $59.
However, market analyst Ali Martinez has argued that Hyperliquid is breaking out of a rising wedge on its daily chart. This suggests a potential move towards $31, which could lead to the token retracking by around 20% from its current trading price of $39.
Featured image from OpenArt, chart from TradingView.com
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Ronaldo Marquez