Written by: David Christopher
Compiled by Saoirse, Foresight News
Hyperliquid HIP-4's greatest success to date stems from世界杯-related trading.
I did not anticipate this scenario. When HIP-4 was first launched, I argued that Hyperliquid was not truly aiming to directly compete with Polymarket or Kalshi. These outcome prediction markets are better understood as an extension of its trading ecosystem: providing daily binary contracts in crypto to hedge perpetuals, construct option-like risk exposures, and allow traders to keep their entire portfolio consolidated within the Hyperliquid platform.
However, subsequent developments were unexpected: Hyperliquid陆续 launched trading markets for the NBA Finals, individual World Cup matches, and championship winners. These three categories—of which the latter two account for the vast majority of trading volume—collectively represent approximately 48% of the total trading volume on HIP-4 to date.
After the peak trading interest in the World Cup, the open interest for related contracts dropped by more than 90%. However, objectively speaking, this does not mean HIP-4 has failed—it simply reflects the current lack of events with significant trading interest.
The system is currently operating under a permissioned model, requiring validators to manually create and launch all trading markets. The remaining markets on the platform are mostly related to cryptocurrency price movements, with extremely low trading volumes that cannot compare to the volume generated by sports events.
Hyperliquid now aims to break through this limitation. On July 31, the permissionless HIP-4 deployment feature went live on the testnet, paving the way for third-party teams to independently create and operate outcome prediction markets, while also outlining the necessary conditions for successful implementation.
Between May and August 2026, 47.8% of HIP-4 trading volume came from sports event markets, with the World Cup accounting for the majority of sports trading volume, highlighting the platform's heavy reliance on major trending events to drive trading traffic.
How HIP-4 operates in a permissionless model
Note: Permissionless deployment does not mean unrestricted or arbitrary market creation.
According to the mainnet preliminary design: Validators first approve market templates—a reusable standard framework that defines market creation rules and settlement methods. Deployers then select an approved template to create a specific trading market, filling in details such as the trading proposal, optional outcomes, expiration time, and settlement criteria.
Here is a political-related example (we will explain below why the political market is emphasized): An approved binary event template can be used to create markets for candidate election outcomes. However, Hyperliquid has not yet disclosed the scope of the template’s applicability, so it is currently unclear whether a single template can cover scenarios such as Senate, House, or gubernatorial races—or whether separate templates are needed for situations like party control, seat counts, or multi-candidate races.
One thing is certain: the deployer only needs to invoke a template that has already been approved by the validator to create a market, without needing to apply for separate approval for each individual market.
Consistent with the HIP-3 mechanism, deployers must precisely define market rules and properly complete settlements. In the event of significant errors, validators have the authority to slash their staked assets.
Deployers are required to stake 500,000 HYPE (same as standard and HIP-3), with a lock-up period of six months; staked assets can only be withdrawn after all markets under their name have been fully settled. Initially, each deployer is granted a limit of up to 100 outcome markets; this limit can be reused once markets are settled. The platform plans to expand additional quotas in the future through auctions. Deployers can ultimately earn up to 50% of the trading fees generated by the markets they create.
After the World Cup craze, where is the next major opportunity?
The most obvious target: the U.S. midterm elections.
Prediction markets initially entered the public spotlight through political issues. Kalshi and Polymarket have already established comprehensive election trading interfaces covering markets such as control of Congress, district-level races, and total seat counts, whereas HIP-4 has not yet launched any related assets.
This is data from the Kalshi prediction market, with 92 days remaining until the U.S. midterm elections. The market predicts a 54% probability that the Republican Party will control the Senate. Currently, Democrats hold 49 seats and Republicans hold 47 seats; securing 51 seats is required to control the Senate. The map displays the probability of each state’s victory for the respective party.
Whether third-party deployers can fill this gap depends on when the permissionless HIP-4 goes live on mainnet. For reference: HIP-3 took 164 days from the launch of its first permissionless testnet minimal version to mainnet deployment; however, the interval between publishing the initial mainnet specification and launching the mainnet bug bounty program to official launch was only 18 days.
The current status of HIP-4 is in between: the mainnet preliminary architecture has been publicly disclosed, and the testnet has opened deployment features, but a mainnet-level bug bounty program has not yet been launched, leaving the overall progress in an uncertain phase.
If this system launches on schedule, deployers can establish a comprehensive election trading section based on the midterm elections, rather than rolling out isolated campaign issue markets—provided that validators synchronously approve transaction templates supporting election scenarios.
If permissionless deployment misses the midterm election window, validators can still manually launch various midterm election markets. Nevertheless, HIP-4 will still capture trading volume, but it will miss its first major real-world opportunity: failing to demonstrate to the market that external third-party deployers can consistently provide timely, popular trading markets to the platform.
The World Cup has demonstrated that Hyperliquid users are willing to trade around major real-world events. However, the rapid decline in trading volume after the tournament ended revealed a key challenge: the platform struggles to maintain engagement in the absence of high-profile events.
The current midterm election has generated significant momentum, presenting an excellent opportunity for HIP-4. The platform can leverage this momentum to maintain market enthusiasm and advance the deployment of permissionless initiatives. Over the coming weeks, it’s advisable to closely monitor related developments.