Hyperliquid’s HIP-4 chips away at Polymarket’s lead

Hyperliquid has opened the doors to events trading with the launch of HIP-4. The new platform picked up the pace in the first days of trading and may become one of the major competitors to Polymarket.

Hyperliquid’s HIP-4 opened the door to permissionless events trading, becoming one of the key competitors to Polymarket.

HIP-4 arrives at a time of peak demand for prediction markets, where all leading platforms are posting new records in open interest, as Cryptopolitan reported earlier.  

On the first day of trading, the platform reached a peak of 6.05M contracts, taking 0.7% of the prediction market. In comparison, Polymarket carried 190M contracts, and Kalshi was the leader with 546M contracts. 

Hyperliquid also competes with Limitless, Crypto[.]com, Opinion, and PredictFun, as other legacy platforms have also added an events prediction component.

Hyperliquid brings permissionless outcome markets

Hyperliquid takes a permissionless approach to launching new outcome markets. The only condition is to stake 1M HYPE to avoid spamming the platform. On Polymarket and other platforms, only approved creators can launch a new market. 

The HIP-4 prediction markets will also be composable and interact with the rest of the Hyperliquid ecosystem. All transactions are recorded on the Hyperliquid native L1 chain.

Traders can use cross-margin and the same wallet to trade BTC outcomes, perpetual futures, or spot markets. The new permissionless and open approach will make hedging easier, allowing a trader to open positions in the same ecosystem with one click. There will be no bridging requirements, separate accounts, or additional fees. 

Hyperliquid has also built a Central Limit Order Book (CLOB) engine, allowing for instant fill times. Taker fees are also lowered for high-volume traders. All predictions are settled in the native USDH stablecoin.

Hyperliquid sets new user records

Hyperliquid set a record for new users on May 3, with 2,441 new original wallets. In total, the platform carries 1.19M users, with over 18M retail users for Polymarket. HIP-4 may offset some of the lowered general activity in token trading. 

HIP-3 is also boosting the bottom line for Hyperliquid, often supplying up to 45% of daily volumes, according to Dune Analytics data. Recently, TradeXYZ launched another version of one of the most in-demand markets. 

TradeXYZ is still the biggest source of volumes, launching some of the most in-demand contracts for commodities and equities on HIP-3. The exchange makes up over 91% of open interest on HIP-3.

HIP-3 will carry pre-IPO markets, allowing traders to get exposure to promising businesses even before they are public. HIP-3 will take pricing data from the company’s latest relevant funding round for a basic valuation, and price discovery will happen through the perpetual futures market.

Once the IPO is realized, the perpetual futures price will be converted to the public pricing. If there is no IPO, the market will continue based on the average pre-IPO price.

Following the news, the HYPE native token traded near its three-month high at $41.65. HYPE is still seen as relatively stagnant, as it has not pushed beyond the $40 range for months, and the addition of prediction markets sparks hopes of a renewed rally.

If you're reading this, you’re already ahead. Stay there with our newsletter.