Hyperliquid Explores Prediction Markets Through HIP-4 Outcome Trading Proposal

Hyperliquid, a decentralized Layer-1 blockchain and derivatives exchange, is preparing to expand into prediction markets with a new protocol upgrade, HIP-4. Announced on February 2, 2026, the proposal introduces “outcome trading” as a core primitive within HyperCore, the platform’s high-performance trading engine.

The move would place Hyperliquid in direct competition with established prediction market platforms such as Polymarket and Kalshi, which together process billions of dollars in weekly notional volume. While Hyperliquid’s prediction markets are not live yet and remain in testnet, early market reaction and technical details suggest a deliberate effort to reduce risk and broaden use cases beyond leveraged crypto derivatives.

This article outlines what is known about Hyperliquid’s outcome-trading system, how it compares with existing prediction market platforms, and the challenges that remain before a mainnet launch.

What Is Hyperliquid?

Hyperliquid is a decentralized Layer-1 blockchain designed for high-throughput trading. It is best known for its perpetual futures markets, which operate without external market makers. Trades are matched on HyperCore, a proprietary engine optimized for speed and low latency.

As of early 2025, the platform held more than $2.3 billion in user deposits, primarily denominated in USDC. Hyperliquid also supports application development through HyperEVM, an Ethereum-compatible execution environment that allows developers to deploy smart contracts directly on the chain.

The network’s native token, HYPE, has shown price volatility tied to ecosystem announcements and protocol upgrades. The HIP-4 proposal is the most significant expansion beyond perpetual futures announced to date.

Prediction Markets and Recent Growth

Prediction markets allow participants to trade contracts based on the outcome of real-world events. These events range from elections and economic indicators to sports and weather. Prices reflect collective expectations, often expressed as probabilities.

In crypto markets, prediction platforms have grown rapidly. Weekly notional volume across major platforms reached approximately $3.68 billion as of November 10, 2025, according to Dune Analytics data cited in community discussions. The growth was driven by high-interest events such as U.S. elections and incentive programs that rewarded active trading.

At that point:

• Opinion accounted for about $1.46 billion in weekly volume.
• Kalshi processed roughly $1.24 billion.
• Polymarket recorded close to $952 million.

These figures highlight both demand and competition for new entrants.

HIP-4 and the Outcome Trading Model

HIP-4 introduces outcome trading as a native feature of HyperCore. Outcomes are fully collateralized contracts that settle within a fixed price range, typically between $0 and $1. Each contract has a defined expiration tied to a specific settlement event.

Unlike perpetual futures, outcomes do not use leverage. Traders cannot be liquidated, and losses are limited to the amount of collateral posted at the time of entry. This structure resembles a bounded option rather than a traditional derivative.

Key technical characteristics include:

Non-linear payouts
Returns depend on whether a defined event occurs, not on incremental price movements. This makes the contracts suitable for binary or event-based outcomes.

Dated contracts
Each outcome has a fixed settlement date, eliminating perpetual exposure and funding-rate mechanics.

Full collateralization
All positions are backed one-to-one by collateral, reducing counterparty and liquidation risk.

Composability
Outcome contracts integrate with Hyperliquid’s portfolio margin system and HyperEVM, allowing developers to build more complex decentralized finance applications.

Canonical markets under HIP-4 will rely on objective settlement sources, such as price feeds or event oracles. These markets will be denominated in USDH, Hyperliquid’s native stablecoin.

Development Status

As of February 3, 2026, outcome trading is available only on Hyperliquid’s testnet. No mainnet deployment date has been confirmed. According to the Hyperliquid team, canonical markets will launch once technical development is complete, and user feedback from testnet testing is reviewed.

The team has indicated that permissionless market creation may follow, allowing third parties to deploy their own outcome markets without centralized approval. This step remains conditional and has not been finalized.

There is no live volume data for Hyperliquid prediction markets because they do not yet exist on mainnet.

Existing Prediction Market Activity on HyperEVM

Although Hyperliquid has not launched native prediction markets, third-party developers have already experimented within the ecosystem.

One example is OutcomeMarketX, which launched in September 2025 on HyperEVM. The project introduced an order-book-based prediction market with zero-fee trading and gas costs covered by the platform. It supports predictions across crypto assets, equities, and foreign exchange markets.

OutcomeMarketX relies on Oracle data from Pyth for settlement and emphasizes instant resolution once outcomes are known. The project entered beta testing at launch. No updated usage or volume data has been published since.

Other HyperEVM projects mentioned in early 2025 announcements focused on tokens and decentralized applications unrelated to prediction markets.

Market Reaction to HIP-4

The HIP-4 announcement had an immediate impact on market sentiment. HYPE rose by 8-21 percent in the 24 hours following the February 2, 2026, disclosure, according to on-chain price-tracking data shared by traders.

On-chain trading volume on Hyperliquid increased to nearly $1 billion shortly after the announcement. The surge reflected renewed interest in the platform’s expansion beyond perpetual futures.

Some analysts attribute the reaction to expectations that outcome trading could attract new users who avoid leveraged products. Others point to speculation around potential incentive programs, such as points or airdrops, although no such programs have been confirmed.

Competitive Landscape

Hyperliquid enters a crowded market dominated by platforms with established liquidity and user bases.

Polymarket has focused heavily on political and election-related markets and operates as a crypto-native platform with stablecoin settlement. Kalshi functions as a regulated exchange in the United States, offering event contracts tied to economic and social data.

Opinion, launched in 2025, grew rapidly through aggressive incentive programs that rewarded trading volume. Its weekly volume increased from roughly $150 million to more than $1.4 billion within weeks during peak activity.

Hyperliquid’s differentiation lies in its technical design. By embedding outcome trading directly into a high-performance Layer-1 engine, the platform avoids external liquidity dependencies. The absence of leverage also changes the risk profile compared with many existing derivatives-based prediction markets.

Still, Hyperliquid starts with zero production volume in this category and must attract both traders and market creators to compete.

What Hyperliquid Has Confirmed

In a formal statement, Hyperliquid described outcome trading as a general-purpose primitive designed for prediction markets and bounded options-like instruments. The team cited sustained user demand for non-leveraged derivatives and emphasized that these outcomes expand HyperCore's expressivity.

The company confirmed that outcome trading remains a work in progress and is limited to testnet. Canonical markets will rely on objective settlement sources and use USDH as the settlement asset. Permissionless deployment remains subject to user feedback.

Conclusion

Hyperliquid’s HIP-4 proposal represents a technical expansion rather than a product launch. Outcome trading introduces fully collateralized, non-leveraged contracts into HyperCore, enabling prediction markets and related instruments without liquidation risk.

The design aligns with Hyperliquid’s existing strengths in performance and on-chain execution while addressing a different risk profile than perpetual futures. Market reaction to the announcement suggests strong interest, although no production data exists yet.

Whether Hyperliquid can compete with established prediction market platforms will depend on execution quality, liquidity formation, and regulatory navigation once outcome trading reaches mainnet.