HIP-4 Opens Permissionless Deployment: Can Hyperliquid Kill Polymarket?

Original by Odaily (@OdailyChina)

Author: Golem (@web3_golem)

Just after the World Cup ended, Hyperliquid dropped a "nuclear bomb" on the prediction market track.

On July 20, Hyperliquid announced that HIP-4, like HIP-3, will support permissionless deployment in the future. The staking requirement for HIP-4 deployers is also 500,000 HYPE, which will be locked for 6 months. HIP-4 deployers can set a fee split of up to 50% in deployed markets. This feature will first launch on the testnet before going live on the mainnet.

Hyperliquid Announces Open Permissionless Deployment for HIP-4

Although Hyperliquid's announcement is still preliminary and the specific timeline for HIP-4 permissionless deployment has not been confirmed, the market has already gotten excited following the news.

The reason Hyperliquid has become the world's largest platform for equity tokens and on-chain commodity perpetual contracts, even beating traditional financial markets to set IPO prices for companies, is largely due to its launch of HIP-3 in October 2025, which opened up third-party permissionless creation of perpetual contract markets.

Therefore, this time, investors believe Hyperliquid can once again leverage the power of "decentralization" to surpass all leaders in the prediction market track.

Who Will Be the Next Trade.xyz?

Hyperliquid launched the HIP-4 market on May 2, 2026, marking its official entry into the prediction market. Before its launch, the market generally expected it to become Hyperliquid's next core narrative. However, nearly three months after its actual debut, its performance can only be described as poor.

According to Hyperliquid's official data, the cumulative trading volume of the HIP-4 market over the past three months was only $216 million, with an average daily volume of just $10 million, a peak daily active user count of 7,000, and total fee revenue of only $442.38. In contrast, according to DeFiLlama data, Polymarket's trading volume over the past month alone reached $4.587 billion, generating $50 million in fees.

HIP-4 Average Daily Volume and Total Volume

Beyond low user numbers and trading volume, the number of events with tradable outcomes on HIP-4 is also quite limited. Currently, there are only 6 prediction markets on HIP-4, which is a drop in the bucket compared to Polymarket in both quantity and variety.

Currently Tradable Events on HIP-4

Faced with such a stark disparity in scale, Hyperliquid chose path dependency, following the successful formula of HIP-3: since it couldn't build it up internally, it would hand the stage over to the community and recreate a Trade.xyz for HIP-4.

Hyperliquid opening permissionless deployment for the HIP-4 market is equivalent to Polymarket allowing users to autonomously create prediction market events. Hyperliquid founder Jeff also stated that permissionless deployment is particularly crucial for the growth of outcome markets (HIP-4), as the range of tradable outcomes is extremely broad, and the number of independent events suitable for outcome trading far exceeds the number of underlying assets suitable for derivatives and real-world asset tokenization.

Furthermore, having the community or third parties deploy prediction market events offers greater flexibility. Currently, the creation of prediction market contracts is primarily handled by project teams or requires community-created markets to pass a review process. This workflow is not sufficiently decentralized, and team members cannot possibly have an exhaustive focus on all fields. Especially for hot events happening in the real world, this model slows down the time from reacting to a market trend to ultimately executing and launching it.

In the HIP-4 market, as long as enough HYPE tokens are staked, third parties can list prediction market events according to their own standards without needing review from the Hyperliquid team. Hyperliquid also stipulates that it will not restrict multiple deployers from launching identical events simultaneously. This will incentivize healthy competition in the HIP-4 market, where success comes only from providing users with more comprehensive events and deeper liquidity.

Hyperliquid has always adhered to a win-win strategy in its product philosophy. The HIP-3 market has already birthed the behemoth Trade.xyz, which commands over 90% of the HIP-3 market share, with the trading volume for each of its first ten perpetual contract assets exceeding $10 billion.

Perhaps many teams are already sharpening their tools, waiting for the day Hyperliquid's mainnet opens permissionless HIP-4 deployment. We might then witness a spectacular "Clash of the Titans."

Can Hyperliquid Disrupt the Prediction Market Landscape?

But can Hyperliquid truly rely on "one trick to win them all"?

First, Hyperliquid is not what it used to be. The HYPE price has stabilized above $60, and the HIP-4 market's requirement for deployers to stake 500,000 HYPE (approximately $30 million) has effectively shut out small startup teams. A crypto project these days might not even raise $30 million in a funding round, and a prediction market project capable of raising $30 million would likely prefer to develop its own prediction market platform.

Therefore, the excessively high staking barrier for HIP-4 deployers could drastically reduce the number of third-party competitors. Ultimately, only "well-funded" prediction market projects might participate to drive traffic, limiting the number of tradable independent events and severely hampering the innovation momentum of the entire HIP-4 ecosystem.

Second, Hyperliquid's timing for introducing HIP-4 permissionless deployment missed the boat entirely. A primary reason 2026 became a year of opportunity for the prediction market track is the dense schedule of sports events in recent years, especially catching the quadrennial World Cup. Major prediction markets have all been focusing on the World Cup matches. For example, the total trading volume for the Argentina vs. Spain match on Polymarket on July 20 alone reached $83.75 million.

But Hyperliquid completely missed this crucial time window of the World Cup, undoubtedly a significant strategic oversight. Even the success of the HIP-3 market was a confluence of favorable timing, geographical advantages, and human effort. The volatility in international crude oil prices triggered by the US-Iran conflict in February this year served as a critical catalyst for the development of the HIP-3 market. The conflict broke out on a weekend. With traditional markets closed, traders needing urgent position adjustments and hedging had to find new tradable markets, making Hyperliquid's HIP-3 market the top choice.

When Hyperliquid launched HIP-3, it did not emphasize its purpose for tokenizing stocks and commodities. Yet, it ultimately led to the creation of Trade.xyz and Hyperliquid's current dominant position in the tokenized trading market. If Hyperliquid had not seized the opportunity presented by the US-Iran conflict, it might have no place in the tokenized trading market today.

Similarly, having missed the World Cup window, how confident can Hyperliquid be now in disrupting the giants of the prediction market?