Hyperliquid plans to add decentralized prediction markets in upgrade to HIP-4

Betting Volume

$50 billion

Total bets placed during the FIFA World Cup, highlighting the scale of prediction markets.

HYPE Token Staking Requirement

500,000 HYPE tokens

Amount required to stake for deploying a prediction market.

HYPE Token Price Change

The rise in HYPE token price following the announcement of the upgrade.

§ 01 Executive Snapshot

What: Hyperliquid is set to enhance its HIP-4 upgrade by introducing permissionless prediction markets.
Who: Hyperliquid, validators, and users of the prediction market platform.
Why it matters: This development signifies a shift towards decentralized trading mechanisms, potentially increasing user engagement and market participation in prediction markets.

Hyperliquid's HIP-4 upgrade, which introduced outcome trading, will now support permissionless deployment of prediction markets.
Permissionless prediction markets will initially be available on testnet before launching on the mainnet.
Deployers must stake 500,000 HYPE tokens, which can be slashed based on validator votes regarding market definitions and settlements.

The prediction market sector has grown into a multibillion-dollar industry, with major players like Polymarket and Kalshi dominating the market.
The introduction of permissionless markets aligns with the broader trend of decentralization in finance, allowing greater access and participation.

Immediate consequence: Increased user participation in prediction markets as anyone can now create markets, subject to validator-approved templates.
Long-term implication: The move could lead to a reduction in validator-controlled markets, fostering a more decentralized ecosystem.

Potential risk: The requirement for staked tokens could limit participation for smaller users or deter some from deploying markets.
Competition from established platforms like Polymarket and Kalshi may challenge Hyperliquid's market penetration.

Upcoming milestones include the rollout of permissionless prediction markets on testnet, followed by mainnet availability.
Success indicators will include user adoption rates of the new prediction markets and the number of markets created under the new system.

§ 07

What is Hyperliquid planning to add in its HIP-4 upgrade?

Hyperliquid is planning to enhance its HIP-4 upgrade by introducing permissionless prediction markets.

Why are permissionless prediction markets significant?

They signify a shift towards decentralized trading mechanisms, potentially increasing user engagement and market participation.

How will the permissionless prediction markets be launched?

They will initially be available on testnet before launching on the mainnet.