Hyperliquid, the decentralized crypto exchange that has emerged as one of the most active trading venues in digital assets, is proposing to add prediction markets to its platform — a direct challenge to Kalshi and Polymarket as the fast-growing sector draws new competitors.
The proposal, known as HIP-4 and currently in public testing, would let traders bet on real-world outcomes on a platform that has increasingly drawn notice from Wall Street for the speed and ambition of its product expansion.
Hyperliquid is traditionally focused on perpetual futures — contracts with no expiry that involve large amounts of leverage, and therefore risk. For prediction markets, the contract design would be simpler. A market on whether US inflation in July could exceed 3.5%, for example, would generate two tokens — one for each outcome. Traders buy or sell either side, and the winning token settles at a fixed value when the answer is known.
Unlike Hyperliquid’s perpetual products, the proposed contracts would not include leverage, reducing the risk of forced liquidations that frequently occur in crypto markets.
What makes Hyperliquid a credible threat, at least on paper, is not the contract structure but the platform underneath it. What began as a niche venue for crypto derivatives has rapidly evolved into one of DeFi’s most ambitious marketplaces — adding contracts linked to oil, gold, silver and US equities, drawing billions in trading volume, and building and shipping new products at a speed that traditional venues cannot match. In March, Hyperliquid handled $219 billion in total volume, according to data site Hydromancer.
“Sophisticated traders will be able to take advantage of portfolio margin and figure out ways to generate alpha from these two different market types,” said Sunny Shi, an investor at crypto fund Syncracy Capital. “A way that you wouldn’t be able to see like on Polymarket or Kalshi, where today most of it is just betting. It’s just like single-sided betting.”
Some important details remain unresolved, including how Hyperliquid would decide which events qualify for contracts, what governance process would approve new markets, or when HIP-4 would move beyond testing to a full launch. A Hyperliquid representative declined to comment.
The platform’s growing popularity was on display during the Iran crisis, when oil-linked contracts saw more than $1 billion in volume in a single day, providing one of the earliest reads on how traders were pricing geopolitical risk while traditional commodity markets were closed. An equity-linked contract tracking the Nasdaq 100 has drawn more than $60 million in open interest. The platform has attracted backing from firms including Paradigm and Pantera Capital, and an $888 million Nasdaq-listed fund now holds its native token.
Polymarket and Kalshi already offer binary outcome contracts, and prediction markets are increasingly accessible through mainstream brokerages including Robinhood, Interactive Brokers and Coinbase. What Hyperliquid is proposing is distinct in at least two ways. First, the prediction markets would be native to a platform where traders are already active in crypto, commodities and equity-linked contracts — giving the product instant distribution rather than requiring it to build an audience from scratch. Second, the contracts would sit inside the same trading system as those other products, meaning a single user could manage event bets, Bitcoin positions and oil exposure within one account.
The competition is moving in both directions. As Hyperliquid pushes into prediction markets, Polymarket and Kalshi have been exploring perpetual futures and other derivatives — products that would bring them closer to the kind of multi-asset trading Hyperliquid already offers. A spokesperson for Polymarket didn’t respond to requests for comment. A Kalshi representative didn’t comment on the competitive landscape.
The overlap between user bases is already visible. Analysis by the on-chain researcher Fleck shows that roughly 3.3% of Polymarket users are also active on Hyperliquid, but those overlapping traders account for about 12% of Polymarket’s total volume — suggesting that the most active speculators already have a foot in both worlds.
The timing of Hyperliquid’s entry is notable. The prediction market industry has spent the past two years trying to move toward regulatory legitimacy — Kalshi winning CFTC approval, Polymarket returning to the US, Washington warming to the sector, and venture capital flowing toward platforms building within the regulatory framework. Hyperliquid cuts against that grain: an offshore, decentralized exchange, which restricts US users from accessing its platforms, proposing to offer event-like contracts at a moment when much of the industry is betting that the future lies in regulated markets. For supporters, that freedom is the point — faster product development and access for users in markets that US platforms do not serve.
Industry participants expect early adoption to be gradual, with activity concentrated outside the US in markets that have not had access to mainstream prediction platforms, such as cricket betting in countries like India.
“Historically prediction markets have been very centered around sports, geopolitical events and elections, with most of the activity coming via sports,” said Rajiv Patel-O’Connor, a partner at Framework Ventures.
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