Hyperliquid opens prediction market creation to all with HIP-4
Hyperliquid (HYPE) announced on the 20th that a future upgrade will introduce permissionless functionality for outcome markets, allowing anyone to create and launch markets. The feature will first be deployed on a testnet before migrating to mainnet. Previously, only validators could create outcome markets under a permissioned system, but the new proposal requires staking 500,000 HYPE to become a market creator, with staked assets locked for six months.
Outcome markets let users bet on the results of various events. Hyperliquid launched the protocol improvement proposal HIP-4 on May 2 to enter the prediction market space. On the first day alone, over 6.05 million contracts were traded. By May 26, the platform expanded to cover real-world events such as sports results, macroeconomic data releases, elections, and legal rulings—events that cannot be settled directly from on-chain price data.
Permissionless expansion with quality controls
To ensure quality in permissionless market creation, validators will vote to determine templates for outcome markets. Market creators must use one of the approved templates as a basis. They are responsible for configuring their markets according to the template and for settling outcomes. Hyperliquid noted that canonical markets—those established by validator vote—will continue to be created, but ideally fewer than 10 event outcomes or questions per year.
If a market is set up improperly, settled in a way that deviates from the template, or left unsettled for over a week, validator voting may trigger slashing—confiscating the market creator's staked HYPE. Market creators can set a fee of up to 50% on their markets, a feature to be released later. All specifications are provisional and subject to change based on community feedback.
Growth potential and regulatory engagement
Hyperliquid pointed out that the number of events suitable for outcome markets far exceeds the number of underlying assets for perpetual futures or spot trading. Permitting anyone to create markets is expected to foster diverse offerings and ecosystem growth. The prediction markets recorded about $100 million in trading volume within the first month of launch.
On July 14, the U.S. SEC's Crypto Task Force held a meeting with representatives from the Hyperliquid Policy Center and XYZ, among others, to discuss cryptocurrency regulation. Hyperliquid submitted materials explaining its technology and markets.