Hyperliquid is opening its prediction market to outside operators. The team behind the layer-1 blockchain proposed HIP-4, an upgrade that would let external deployers create and settle event contracts — as long as they put up 500,000 HYPE tokens, worth roughly $31.7 million at the time of the announcement.
The proposal, published this week, aims to close the gap with Polymarket. Since May 2, HIP-4 has been live on mainnet, but only validator-curated contracts were allowed. That limited the number of event markets Hyperliquid could offer. The new design lets approved deployers list questions without needing a validator vote for each one.
A $31.7 million ticket to run a prediction market
Each deployer must lock 500,000 HYPE for six months. They can't withdraw until all their markets are settled. In return, they get up to 50% of the fees from the markets they operate. The system starts on testnet before moving to mainnet.
Deployers control which questions to list and how markets are settled. Validators still set the broader rules, approve standardized templates, and can penalize bad actors. If an operator records incorrect results, fails to resolve within a week, or launches a market with unclear terms, validators can seize part or all of the stake.
How the system works
Markets are integrated into Hyperliquid's HyperCore trading engine. They're fully collateralized, settle at 0 or 1, and don't use leverage. Validators approve templates; deployers use those templates to introduce contracts. Direct validator deployments are expected to be rare — fewer than 10 questions per year for canonical markets.
Each deployer initially gets capacity for 100 outcomes, which translates to up to 200 tradable outcome tokens. Multiple-outcome questions eat multiple slots. Hyperliquid plans to add an auction mechanism for operators who want larger allocations.
The economics and the risks
The 500,000 HYPE stake is meant to align incentives. Deployers earn a fee share, but they also have skin in the game. If they mess up — wrong results, late resolution, unclear terms — validators can slash the stake. That's a strong deterrent.
The proposal follows HIP-3, which let independent developers list customized perpetual futures contracts. That upgrade saw its share of daily volume grow from about 2% at the start of 2026 to roughly 50% now. Hyperliquid is betting the same model works for prediction markets.
The broader ecosystem is already seeing record activity. Real-world asset (RWA) open interest hit $3.6 billion, and total open interest reached an 11 billion high for 2026.
HIP-4 will first launch on testnet. A mainnet rollout will follow once the code is battle-tested. Hyperliquid is also working on the auction mechanism for operators who need more than the initial 100-outcome allocation. The proposal is open for community feedback.
