Hyperliquid’s HIP-4 Is the Most Direct Threat Polymarket Has Faced

Hyperliquid is the last thing Polymarket needed right now. The decentralized exchange, already one of the most active crypto trading venues in the world, is publicly testing a plan to move into prediction markets. The proposal is called HIP-4. If it ships, traders will be able to place binary bets on real-world outcomes, elections, macro events, crypto prices, directly inside the same margin account they use for perpetual futures. No switching platforms. No moving funds.

That’s a bigger deal than it sounds. 

Kalshi Is Already Inside the Room

Here’s the twist. HIP-4 wasn’t built by Hyperliquid alone. John Wang, head of crypto at Kalshi, co-authored the proposal, and the two companies formalized a partnership back in March to bring on-chain prediction markets to life together. That partnership is exactly why Polymarket is the one sitting most exposed here, Kalshi didn’t just fail to block a competitor from entering, it handed one a roadmap. 

Both Kalshi and Polymarket have been moving fast. On April 21, they announced plans to launch crypto perpetual futures within hours of each other. Dueling press releases, same product, same day. It was the clearest sign yet that these two platforms are now openly at war over product territory. But the Hyperliquid development adds an entirely different dimension, a third player with serious infrastructure, a growing user base, and now a regulated co-pilot in Kalshi.

The capital at stake makes the competitive pressure real. Kalshi raised $1 billion at a $22 billion valuation in March. Polymarket is reportedly in the middle of raising $400 million at a $15 billion valuation. These are no longer scrappy startups. Both platforms are heavily capitalised and fighting to define what the prediction market category looks like at scale.

The User Overlap Problem

The data that should concern Polymarket most is this: on-chain researcher Fleck found that 3.3% of Polymarket’s users are already active on Hyperliquid. That slice of users generates roughly 12% of Polymarket’s total volume. These are the whales. HIP-4 gives them a clear reason to stop splitting activity across two platforms and consolidate everything into a single Hyperliquid margin account.

Losing 3.3% of your users doesn’t sound catastrophic until you realise that group is responsible for more than a tenth of your volume.

The Open Questions

Hyperliquid has structural limitations that matter here. The platform restricts U.S. users and operates with a lean team, a very different setup from Polymarket, which employs internal staff to curate markets and manage disputes, while routing resolutions through UMA’s optimistic oracle. Replicating that kind of oversight at scale without either bloating the team or compromising on quality won’t be easy.

HIP-4 also hasn’t confirmed a mainnet launch date or finalized its oracle infrastructure, meaning the actual competitive threat is still weeks or months away from being real. Former Barclays CEO Bob Diamond, who chairs Hyperliquid Strategies Inc., the Nasdaq-listed vehicle trading as PURR, has filed an S-1 to raise up to $1 billion more, so the money to build this out isn’t the problem. 

During the Iran war earlier this year, oil-linked contracts on Hyperliquid crossed $1 billion in single-day volume when traditional commodity markets were closed. The platform has already shown it can handle stress. Whether it can handle prediction market complexity alongside it is the real question.

Polymarket and Kalshi spent the last year proving prediction markets could be institutional-grade. Now they have to prove they can hold the territory they built.

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