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

Hyperliquid announced a planned enhancement to its recent HIP-4 upgrade that will enable permissionless deployment of prediction markets on its platform. Currently, prediction markets on Hyperliquid are controlled by validators who have authority over them. The upcoming feature will allow anyone to offer a prediction market, but only using approved templates that validators vote to authorize. This change follows the May mainnet launch of HIP-4, which introduced outcome trading to the decentralized exchange.

Prediction markets, which let users bet on event outcomes ranging from central bank interest rate decisions to entertainment events, have become a multibillion-dollar blockchain sector dominated by platforms such as Polymarket and Kalshi. The wide popularity of these markets has also drawn centralized platforms like Coinbase and Robinhood to enter the space. For example, the FIFA World Cup saw over $50 billion worth of bets placed recently. Hyperliquid’s initiative aims to expand decentralized access to prediction markets in this competitive environment.

Once permissionless contracts are active, validator-controlled prediction markets will still exist but are expected to be rare, with Hyperliquid ideally capping them at fewer than 10 per year. The permissionless markets will first launch on Hyperliquid’s testnet and later on the mainnet. Deployers will need to stake 500,000 HYPE tokens, which can be slashed if validators decide a market is poorly defined or settled incorrectly. Deployers are also eligible to earn up to 50% of the revenue from trading fees generated by their markets.

Following the announcement, Hyperliquid’s native HYPE token rose about 1%, moving from an intraday low of $59.88 to above $60.50, and trading recently at around $60.79. The upgrade aims to increase user autonomy in creating and managing prediction markets while maintaining validator oversight through staking and slashing mechanisms.