Hyperliquid Enters the Prediction Market Fray with New 'Outcome Trading' Proposal
Hyperliquid, a leading decentralized exchange (DEX), is making a strategic push into the burgeoning prediction market arena. The platform has proposed a new product called "outcome trading," which it frames as a foundational step toward enabling event-based contracts without the high-stakes leverage and liquidation risks inherent in traditional crypto derivatives.
The proposal, detailed in a Monday announcement, outlines how Hyperliquid's core trading engine, HyperCore, would support these new instruments under the designation HIP-4. Unlike perpetual futures, outcome contracts would be fully collateralized and settle within a predefined numerical range. This structure, the team argues, can serve as the backbone for prediction markets while also facilitating a form of bounded options trading.
"Outcomes aim to introduce non-linear, dated payoffs into our ecosystem in a capital-efficient way," a Hyperliquid representative stated. "It's a derivative that removes the specter of forced liquidations, appealing to users who want exposure to specific events or price ranges without extreme leverage." The feature is currently in testnet, with plans for officially sanctioned markets to launch once technical development is complete.
This move comes at a pivotal moment for prediction markets. Regulatory winds in the United States are shifting, with Commodity Futures Trading Commission (CFTC) Chairman Rostin Behram noting last week that the agency is actively developing a new regulatory framework for event contracts. This follows the explosive growth of platforms like Polymarket and Kalshi, which have attracted billions in volume by letting users speculate on outcomes in politics, sports, and entertainment.
The competitive landscape is evolving rapidly. According to a recent Clear Street analyst note, Polymarket's recent re-entry into the U.S. market under a CFTC-approved structure has signaled that event contracts could become a key engagement tool for major crypto exchanges. Hyperliquid's infrastructure-first approach with HIP-4 appears designed to capture developer and trader interest early, offering a simplified, on-chain building block for this new asset class.
"We see this as a core primitive that can integrate with our portfolio margin system and the HyperEVM," the Hyperliquid team added, emphasizing their goal to expand the toolkit available to developers building on its layer-1 chain.
If adopted, HIP-4 would position Hyperliquid directly in the race to legitimize and mainstream prediction markets within crypto, just as regulatory scrutiny and user demand converge to shape the sector's future.
Community Voices
Alex Rivera, DeFi Researcher: "Hyperliquid's technical approach is clever. By creating a settled, range-bound contract, they're offering a purer form of prediction market instrument that avoids the complexity and risks of leveraged perps. This could attract a different, perhaps more risk-averse, demographic to on-chain event trading."
Maya Chen, Crypto Portfolio Manager: "The timing is strategic. With regulators finally paying attention, having a compliant-ready, non-leveraged product in the pipeline is smart. It's less about competing with Polymarket directly and more about providing the infrastructure for the next wave of applications."
David Park, Independent Trader: "This feels like a 'me-too' feature chasing a hype cycle. Prediction markets are niche, often plagued by low liquidity. Why divert resources from core DEX functions? And 'no liquidations' sounds nice until you realize your capital is locked in a contract for weeks with minimal yield. It's a solution in search of a problem."
Sarah Lin, Blockchain Developer: "The integration potential with HyperEVM is the most exciting part. If they get this primitive right, it could unlock a wave of innovative dApps for insurance, gaming, and forecasting that we haven't even thought of yet. It's a building block play, and those often have the longest-term impact."