First-day trading volume crushes Polymarket as Hyperliquid enters the prediction market with BTC binary options

Original | Odaily Planet Daily (@OdailyChina)

Author | Asher (@Asher_0210)

On May 2, Hyperliquid launched HIP-4 Outcome Markets on Mainnet, formally introducing outcome markets to its on-chain trading system. The first batch listed is BTC daily binary outcome contracts, allowing users to trade based on whether the BTC price will be above or below a specified price at a certain time. Contract prices float between 0.001 and 0.999, representing the market's pricing of the event's probability; upon settlement, the contract settles to 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. In the past, Polymarket has functioned more as an information market centered around events, where users enter a specific market due to elections, sports, geopolitical conflicts, or crypto hotspots, using prices to express their judgment on outcomes. Kalshi, on the other hand, has tried to place event contracts into a clearer regulatory framework.

Hyperliquid's entry point is different. It doesn't first build a standalone prediction market and then attract users to migrate funds. Instead, it cuts directly from its most familiar trading scenario—bringing outcome contracts into the same trading environment as perpetuals and spot trading. 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 Daily Market Makes a Strong Start, 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"—not starting with political, sports, or entertainment events, but focusing on the BTC price volatility that crypto traders are most familiar with.

On its first day, HIP-4 delivered impressive data. According to Predictefy, on its launch day, Hyperliquid's event contract trading volume for BTC price-related contracts reached $6.15 million, far exceeding similar markets on Kalshi, Polymarket, and other prediction platforms. This means in the niche market of BTC price-related event contracts alone, Hyperliquid has already raced to the absolute forefront on its first day.

Data Source: Predictefy

Furthermore, the first day's total trading fees for HIP-4 exceeded $12,000, with over 54,000 transactions and more than 3,000 participants. For a newly launched HIP-4 related to prediction market events, this data is already impressive. It wasn't achieved by rolling out a large number of event categories, but by completing a cold start within the single BTC daily market. This makes HIP-4's first step even more significant.

Why HIP-4 Isn't Simply a Modification of HIP-3

Hyperliquid had previously supported Builders in deploying perpetual contract markets through HIP-3. So, the question arises: since perpetual markets could 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 ultimately settle at either 0 or 1. If an oracle mechanism unsuitable for binary contracts is used, it could leave a lengthy window for incorrect pricing after the event outcome is clear, creating nearly risk-free arbitrage opportunities for traders.

Therefore, HIP-4 was designed as a separate outcome market primitive. It is not a reskinned perpetual, but a contract type specifically designed for expiry, settlement, disputes, and Oracle result confirmation. For the average user, a prediction market looks like buying Yes or No. But for a real trading system, the true difficulty lies in how the event is defined, who confirms it, when it settles, how disputes are handled, and how erroneous results are corrected and penalized. The core of a prediction market isn't just the front-end page and trading interface, but the settlement mechanism itself.

Hyperliquid, Polymarket, and Kalshi Each Have Their Own Battlefields

Looking at Hyperliquid's HIP-4, Polymarket, and Kalshi together, they represent three directions for prediction markets:

• Polymarket's core advantage is event richness and mindshare: It excels at turning complex events into tradable questions, combining public attention, media dissemination, and market probabilities. Political elections, geopolitical conflicts, celebrity events, sports competitions, and crypto project milestones can all be quickly turned into markets.
• Kalshi's advantage lies in compliance: It is closer to an event contract platform in the traditional financial context, with target users and regulatory frameworks not entirely identical to Polymarket and Hyperliquid. The recent escalating debate surrounding prediction market regulation in the US and the conflict between the CFTC and state-level regulators indicate that event contracts are no longer marginal products but have entered the core discussion zone of financial regulation.
• Hyperliquid's advantage is trading experience and capital efficiency: Hyperliquid has its own L1, HyperCore matching engine, on-chain order books, and spot and perpetual infrastructure. Official documentation shows that HyperCore includes fully on-chain perpetual and spot order books, with orders, cancellations, trades, and liquidations executed transparently, capable of processing 200k orders/second.

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

HYPE May Become the Value Capture Mechanism in This Competition

The significance of HIP-4 for Hyperliquid extends beyond adding a new trading scenario; it further ties prediction markets to HYPE's staking, fee, and buyback mechanisms. According to HIP-4's design, the first phase involves validators deploying standardized markets, while the second phase will open up permissionless deployment. In the 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; staked assets may be slashed in cases of oracle manipulation, abnormal market states, or prolonged downtime.

This threshold is significantly higher than HIP-3's 500,000 HYPE. The reason is not hard to understand: outcome markets depend more on event definition and Oracle settlement than perpetual markets. Prices in perpetual markets can adjust continuously, but outcome markets only have 0 and 1. A settlement error damages not only the trading experience of a specific 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 wanting to deploy outcome markets will need to lock up more HYPE. Especially as categories like sports, macroeconomics, politics, crypto events, and entertainment gradually open up, the right to create quality markets could become a high-barrier operational license. Second, fee and buyback logic. Hyperliquid already has a strong capacity for capturing trading volume and fees, with a large portion of protocol fees used to buy back HYPE. If HIP-4 can generate new trading volume, outcome markets will not just be a new feature but become part of the fee growth and HYPE buyback flywheel.

This is also a key difference between Hyperliquid and Polymarket or Kalshi. The growth of Polymarket and Kalshi is primarily reflected in platform trading volume, market share, and brand influence. In contrast, Hyperliquid's growth will be more directly mapped onto the demand for and value capture of HYPE.

Market Optimistic, but HIP-4 Still Needs to Prove Itself

The market's feedback on HIP-4 leans towards optimism, for a simple reason. Hyperliquid already has mature trading infrastructure, active trading users, and a clear HYPE value capture mechanism. It doesn't need to build a matching engine from scratch or find its first batch of traders from zero when entering the prediction market.

However, HIP-4 is still in a very early stage. Current markets are concentrated on BTC price outcomes. Whether it can expand into more categories like sports, politics, macroeconomics, crypto events, and entertainment depends on the smooth progress of the second phase's permissionless deployment. Additionally, outcome markets have higher requirements for oracles and settlement mechanisms. Event definition, data source selection, dispute resolution, and erroneous settlements will all directly impact market trust.

Therefore, the significance of HIP-4 is not that Hyperliquid has already won the prediction market, but that it provides a new competitive direction for this track. Polymarket proved that events can become an information market, Kalshi represents the path of compliant event contracts, and Hyperliquid wants to prove 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 hot events and attract more users to bet, then after HIP-4, a new line of competition emerges: who can truly integrate event outcomes into traders' capital, positions, and strategies.

This also means Polymarket's competitor is no longer just Kalshi. With Hyperliquid entering the fray, the next phase of prediction markets may not just be competition between event markets, but competition between trading systems, liquidity, and asset pricing capabilities.