On its first day, trading volume surpassed Polymarket as Hyperliquid entered the prediction market with BTC binary options

Original by Odaily Planet Daily (@OdailyChina)

Author: Asher (@Asher_0210)

On May 2, Hyperliquid launched HIP-4 Outcome Markets on its mainnet, officially integrating outcome markets into its on-chain trading system. The first batch listed were BTC intraday binary outcome contracts, allowing users to trade based on whether the BTC price will be above a specified price at a certain point in time. Contract prices float between 0.001 and 0.999, reflecting the market's pricing of the probability of an event occurring; they settle at 1 if the event occurs and 0 if it does not. Contracts are fully collateralized in USDH, with no fees for opening positions.

This is not a simple product expansion. Previously, Polymarket functioned more like an information market centered around events. Users entered a specific market due to elections, sports, geopolitical conflicts, or crypto trends, using prices to express their judgment on outcomes. Kalshi, on the other hand, attempted to place event contracts within a clearer compliance framework.

Hyperliquid's approach is different. It did not first build a standalone prediction market to attract users and migrate funds. Instead, it directly entered from its most familiar trading environment – allowing outcome contracts to appear alongside perpetuals and spot markets in the same trading interface. For Hyperliquid, prediction markets are not just about betting on an outcome, but a new tool for traders to express direction, manage risk, and build strategies.

BTC Intraday Market Sees Early Success, First-Day Data Exceeds Expectations

The first market under HIP-4 is a daily settlement BTC price performance market. This choice itself is very "Hyperliquid" – starting not from political, sports, or entertainment events, but from the BTC price volatility that crypto traders know best.

On its first day, HIP-4 posted impressive numbers. According to Predictefy, on its launch day, Hyperliquid's event contracts related to BTC price recorded a trading volume of $6.15 million, far surpassing similar products on Kalshi, Polymarket, and other prediction markets. In other words, looking solely at the niche of BTC price-related event contracts, Hyperliquid ranked at the absolute top on day one.

Data Source: Predictefy

Furthermore, on its first day, HIP-4 generated over $12,000 in total fees from over 54,000 trades, involving more than 3,000 unique traders. For a newly launched HIP-4 focused on a single prediction market event, these figures are quite remarkable. This achievement wasn't achieved by launching a wide variety of event categories; rather, it successfully bootstrapped within the single BTC intraday market, making HIP-4's initial step all the more significant.

Why HIP-4 Isn't Just a Rework of HIP-3

Hyperliquid already supports Builder deployment of perpetual contract markets through HIP-3. So the question arises: since perpetual markets can already be deployed, why was a separate HIP-4 necessary? The answer lies in the fundamentally different settlement logic of outcome contracts.

Perpetual contracts require continuous pricing, allowing oracle prices to adjust gradually. However, binary outcome contracts eventually settle at either 0 or 1. If an oracle mechanism unsuitable for binary contracts were used, it could leave a lengthy window for incorrect pricing after an event's outcome is already determined, creating nearly risk-free arbitrage opportunities.

Therefore, HIP-4 was designed as a separate outcome market primitive. It is not a rebranded perpetual contract but a contract type specifically designed for expiration, settlement, dispute resolution, and result confirmation via oracle. For the average user, a prediction market looks like simply buying Yes or No. But for a true trading system, the real challenges lie in how events are defined, who confirms them, when they are settled, how disputes are handled, and how incorrect results are rectified and penalized. The core of a prediction market isn't just the front-end page and trading interface; it is the settlement mechanism itself.

Hyperliquid, Polymarket, and Kalshi: Each Carving Their Own Battlefield

When comparing Hyperliquid's HIP-4, Polymarket, and Kalshi, they represent three distinct directions for prediction markets:

• Polymarket's core advantage is event richness and user mindshare: Its greatest strength lies in turning complex events into tradable questions, combining public attention, media virality, and market probabilities. Political elections, geopolitical conflicts, celebrity events, sports tournaments, and crypto project milestones can all be quickly turned into markets.
• Kalshi's edge lies in its compliance pathway: It is closer to an event contract platform within the traditional finance context, with target users and regulatory frameworks differing from Polymarket and Hyperliquid. Recent escalating debates over prediction market regulation in the US, including conflicts between the CFTC and state-level regulators, indicate event contracts are no longer a niche product but a core topic in financial regulation discussions.
• Hyperliquid's strength is in trading experience and capital efficiency: Hyperliquid possesses its own L1, HyperCore matching engine, on-chain order book, and spot and perpetual infrastructure. Official documentation states that HyperCore includes a fully on-chain order book for perpetuals and spot, where orders, cancellations, trades, and liquidations are executed transparently, capable of processing 200k orders per second.

Therefore, Hyperliquid may not immediately steal all of Polymarket's users. A lightweight user interested in the US election, sports, or entertainment gossip may not necessarily enter Hyperliquid's trading interface just to buy an event contract. However, a trader already using Hyperliquid for BTC, ETH, gold, oil, or stock perpetuals might naturally incorporate BTC intraday outcome contracts as part of their portfolio.

HYPE Could Become the Value Capture Engine in This Competition

HIP-4's significance for Hyperliquid extends beyond adding a new trading venue; it further integrates the prediction market with HYPE's staking, fee, and buyback mechanisms. According to HIP-4's design, Phase 1 involves validators deploying standardized markets, while Phase 2 will open up permissionless deployment. Future market creators wishing to create their own prediction markets will need to stake 1 million HYPE. Each staking seat can support rolling and periodic markets, which can be reused after settlement. In cases of oracle manipulation, abnormal market states, or prolonged downtime, the staked assets may be slashed.

This threshold is significantly higher than HIP-3's 500,000 HYPE requirement. The reason is not hard to understand: outcome markets depend more heavily on event definitions and oracle settlement than perpetual markets. Prices in perpetual markets adjust continuously, but outcome markets have only 0 and 1. Once a settlement error occurs, it damages not just the trading experience of one market, but the credibility of the entire prediction market system.

For HYPE, HIP-4 brings two layers of incremental demand. First, staking demand. More Builders looking to deploy outcome markets will need to lock up more HYPE. As categories like sports, macroeconomics, politics, crypto events, and entertainment gradually open up, the right to create quality markets could become a high-barrier license. Second, fee and buyback logic. Hyperliquid already has strong trading volume and fee-capture capabilities. A significant portion of protocol fees is used to buy back HYPE. If HIP-4 generates new trading volume, the outcome market becomes more than just an added feature; it becomes part of a growth flywheel for fees and HYPE buybacks.

This also represents a key difference between Hyperliquid and Polymarket/Kalshi. The growth of Polymarket and Kalshi is more reflected in increased platform volume, market share, and brand influence. In contrast, Hyperliquid's growth maps more directly onto HYPE demand and value capture.

Market Sentiment is Optimistic, But HIP-4 Still Needs to Prove Itself

Market feedback on HIP-4 leans optimistic, for a fairly straightforward reason. Hyperliquid already possesses a mature trading infrastructure, active user base, and a clear value capture mechanism for HYPE. Entering the prediction market does not require building a new matching engine from scratch or finding the first batch of traders from zero.

However, HIP-4 is still in a very early stage. Current markets are concentrated around BTC price outcomes. Whether it can successfully expand into sports, politics, macroeconomics, crypto events, entertainment, and other categories depends on the smooth progression of permissionless deployment in Phase 2. Additionally, outcome markets have higher requirements for oracles and settlement mechanisms. Event definitions, data source selection, dispute resolution, and incorrect settlements will all directly impact market trust.

Thus, the significance of HIP-4 is not that Hyperliquid has already won the prediction market race, but that it introduces a new competitive direction for this vertical. Polymarket proved events can become information markets, Kalshi represents the path of compliant event contracts, and Hyperliquid aims to demonstrate that event contracts can also be an integral part of an on-chain trading system.

If the past competition in prediction markets was about who could capture more trending events and attract more users to bet, HIP-4 adds another dimension: who can truly integrate event outcomes into traders' capital, positions, and strategies.

This also means Polymarket's rival is no longer just Kalshi. With Hyperliquid entering the arena, the next phase of prediction markets might not just be about competition between event markets, but about competition between trading systems, liquidity, and asset pricing power.