Hyperliquid Introduces Permissionless Prediction Markets with HIP-4 Upgrade

Hyperliquid Introduces Permissionless Prediction Markets with HIP-4 Upgrade

Hyperliquid has announced an upcoming enhancement to its HIP-4 upgrade, set to enable permissionless decentralized prediction markets on its platform. This feature will initially be available on the testnet before being rolled out to the mainnet.

Details on the Upgrade

The HIP-4 upgrade, which introduced outcome trading, will expand to include permissionless deployment of prediction markets. Once implemented, any user will be able to create a prediction market, provided their setup adheres to templates sanctioned by validators. Currently, permissioned markets are controlled by validators, but the new update will shift to a more decentralized model.

Prediction markets allow users to wager on various event outcomes, including significant economic events, like central bank interest rate decisions, and popular cultural events, such as Super Bowl performances. This sector has proliferated, with platforms like Polymarket and Kalshi leading the way, turning it into a multibillion-dollar industry.

Staking and Revenue for Deployers

To create a prediction market, deployers must stake 500,000 HYPE tokens. This stake can be slashed if a validator rules the market was poorly defined or incorrectly settled. Additionally, deployers stand to earn up to 50% of the revenue from trading fees.

Market Trends and Platform Developments

Following the announcement of the upgrade, Hyperliquid’s HYPE token saw a 1% increase, rising from an intraday low of $59.88 to over $60.50. As Hyperliquid moves forward with this enhancement, the ongoing validator-controlled markets will continue to exist, although they are expected to become less frequent, with an ideal scenario of fewer than 10 per year.