Hyperliquid to Introduce Permissionless Prediction Markets with HIP-4 Upgrade

Hyperliquid, a decentralized exchange platform, has announced an upgrade to its recently implemented HIP-4 initiative that will introduce permissionless prediction markets. These markets will allow users to independently create prediction markets on the platform, contingent upon template approvals by validators. Currently, prediction markets are regulated by validators, limiting access to those holding approval.

According to Hyperliquid, the HIP-4 upgrade, which added "outcome trading" features earlier, aims to foster greater participation by enabling users to deploy contracts autonomously. "Once live, anyone will be able to offer a prediction market on the platform, subject to templates approved by validators," Hyperliquid noted in a Telegram message. As it stands, users can only participate in validator-controlled prediction markets.

Prediction markets allow participants to wager on the results of various events, ranging from economic decisions made by central banks to entertainment events like the Super Bowl halftime show. The sector has gained substantial traction, with significant volumes observed during events such as the FIFA World Cup, which garnered over $50 billion in bets. Established players like Polymarket and Kalshi dominate this multibillion-dollar market, indicating increasing interest from centralized platforms as well, including Coinbase and Robinhood.

Upon the rollout of permissionless prediction markets, the existing validator-controlled markets will remain available, yet their prevalence is expected to decline, with Hyperliquid estimating ideally fewer than ten such markets per year. To create these markets, deployers must stake 500,000 HYPE tokens, which can be forfeited if validators assess the market as poorly defined or inaccurately settled. Hyperliquid indicates that deployers can earn up to 50% of the revenue generated from trading fees associated with their markets.

Following this announcement, Hyperliquid's native HYPE token experienced a minor uptick, moving up 1% from an intraday low of $59.88 to just above $60.50, reflecting growing interest ahead of the anticipated changes.