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Hyperliquid has announced the rules for creating prediction markets on its platform, and these details are important for both current HYPE token holders and those planning to launch new markets.
As a crypto investor, I’m really excited to see the official confirmation about HIP-4! Basically, they’re planning to let anyone deploy on the network in an upcoming upgrade – first for testing, and then with real money. The rules will be the same as those currently used for perpetual deployers under HIP-3: you need to stake 500,000 HYPE tokens for six months, and your stake is at risk if things go wrong. It’s a big step towards making the network more open and accessible.
Hyperliquid isn’t building outcome markets as an entirely new venture. Instead, they’re applying the same rapid launch process – the one that made their perpetual futures contracts widely accessible in less than a year – to this next type of trading opportunity. They see outcome markets as a new asset class and are streamlining their development and release just like they did with perps.
Hyperliquid Has Productized Its Expansion Model
Hyperliquid is rolling out its growth plan in stages. They’re launching new features with initial control, testing them thoroughly, and then opening them up to the public. This happens through a system where users need to stake HYPE tokens to participate, and can lose those tokens if they misuse the system. The project has already given out tokens (HIP-1) and established initial liquidity (HIP-2). Perpetual contracts were opened to anyone on October 13, 2025 (HIP-3), and now, HIP-4, which initially launched in a controlled environment on May 2, 2026, is following a similar path toward fully open access.
Each stage of this process increases how much HYPE cryptocurrency is needed as security. Currently priced around $60, a stake of 500,000 HYPE represents about $30 million per user, locked up for at least six months – and often longer if they’re deploying options that extend further into the future.
The Six-Month Lock is Actually Longer Than It Reads
The design really needs careful consideration when it comes to withdrawing funds. Currently, someone who creates a market has to close out *all* their open markets before they can get their stake back. This means if they list a market that settles in eighteen months, their capital is locked up for that full period, not the standard six months. This effectively makes the stake a cost of holding inventory, measured against the longest-duration market they offer, and will likely encourage creators to be more selective about the types and number of markets they list.
Strict requirements create additional challenges. If a market isn’t clearly set up, doesn’t settle correctly based on its rules, or remains unresolved for over a week, validators can step in and make decisions about the funds at stake. This is much less flexibility than most prediction market organizers have experienced with similar platforms.
The Template System is Where HIP-4 Diverges From HIP-3
The key innovation isn’t about financial stakes – it’s how outcomes are structured. Validators will decide on standard market formats (templates), which will be securely recorded and automatically enforced on the blockchain. Instead of creating custom rules for each market, developers can simply build upon these pre-approved templates.
As an analyst, I see that anyone authorized to use our pre-approved templates can deploy them as many times as needed. Each deployer is responsible for the financial settlement related to their specific deployment, but they don’t have the power to change the fundamental structure of the market we’ve established.
Here’s a key difference between HIP-4 and HIP-3 that analysts should pay close attention to. HIP-3 allows qualified users to create markets for any asset with reliable price data. HIP-4 will let qualified users create markets based on pre-approved templates. This shifts the focus from *what* the market is about to *how* the question is structured, and will likely determine if HIP-4 becomes a major competitor to Polymarket, or ends up resembling Kalshi but with more flexibility.
The announcement clearly states that templates will focus on events with strong trading activity and genuine interest, and will be designed to be reliable and easily understood public resources. This wording seems cautious, implying that validators will likely prioritize templates based on financial and market data before considering those dealing with potentially sensitive political or social issues – if they consider them at all.
Capacity is Metered And Priced Through A Future Auction
The system limits how many predictions a deployer can create. Each deployer begins with enough capacity for 100 predictions, which translates to 200 ‘outcome tokens’ because each prediction has both a ‘yes’ and ‘no’ possibility. Questions with more than two possible outcomes use up more than one slot. Once a prediction is resolved, its slot becomes available for new predictions.
A feature allowing deployers to access more resources will be released in the future using an auction system. This approach, instead of simply increasing the resource limit, indicates Hyperliquid plans to let the market determine the price of extra capacity. This way, Hyperliquid can benefit from the value that others might otherwise capture by distributing those resources.
Fee Economics Route Everything Back Through USDH
As an analyst, I’ve been looking into the fee structure, and it’s quite interesting. Market creators can currently collect up to 50% of the fees generated on their markets. We’re also planning to add even more control over these fees in a future update. Right now, though, this fee arrangement is only available for markets using the latest AQAv2 quote tokens.
This limitation is intentional and crucial to how the system works. It directs the final payments from prediction markets through USDH, which then drives the protocol’s fee system and, ultimately, helps buy back HYPE tokens. This creates a self-sustaining economic cycle: each new prediction market reduces the available HYPE supply by requiring it as stake, and every completed market increases USDH usage, further fueling the fees that support the token’s value.
The Competitive Frame is Composability, Not Coverage
Analysts find the way these platforms compete particularly noteworthy. Polymarket runs on Polygon with separate accounts for each user. Kalshi, on the other hand, is regulated by the CFTC and makes its own decisions about which contracts to offer. Because of these differences, neither platform allows traders to hold contracts based on related events, perpetual contracts, and immediate-delivery (spot) positions all within a single margin account.
HIP-4 allows for this kind of flexible integration, and its permissionless nature means it can expand beyond a few basic markets to become a major platform for prediction. As Phase 2 templates incorporate events like politics, sports, and economic data – using external information sources – HIP-4 will offer coverage very close to Polymarket, limited only by what the network’s validators agree to support.
The Trade-Offs Worth Naming
It’s important to acknowledge some limitations. Restricting access through validator voting narrows the potential user base to only those approved by the validators, effectively capping how much trading activity Hyperliquid can attract.
Although the required stake to participate has been reduced to 500,000 HYPE (from an initially reported 1 million), it’s still a significant amount, effectively preventing smaller teams from joining. Deployers who list markets related to politics or sports in countries with strict rules face potential legal issues. While Hyperliquid’s core system is protected, individual deployers are still directly responsible for managing these risks themselves.
HYPE Sits in a Consolidation With Two Opposing Forces
Throughout mid-July 2026, HYPE’s price fluctuated between $58 and $62. It had previously reached a peak of $76.70 on June 16th, but then dipped in late June and early July. Currently, the token is trading around $60.97 with a market value of approximately $15.4 billion, keeping it among the top ten cryptocurrencies by this measure. However, instead of breaking past previous resistance levels, the price is currently stabilizing.
There are two key factors to consider. First, a consistent supply of new HYPE tokens is released each month through 2027. This regular release acts as a test for any upward price movement, as the market needs to absorb this new supply to sustain a rally – a challenge it has faced throughout the year.
With the new HIP-4 update allowing anyone to deploy, HYPE will have even more uses. This adds to how HYPE is already used for deploying through the existing system, staking, and as collateral for validators.
If ten developers create applications using the HIP-4 standard, it would take 5 million HYPE tokens out of circulation for at least six months. Twenty developers doing so would remove 10 million. However, whether this impacts the price depends on how quickly these applications are built and how easily HYPE tokens can actually be bought and sold, as many are currently locked up in staking or held by long-term holders.
Who Actually Benefits
This announcement most directly helps projects that can reach users but don’t have their own trading systems. Companies building prediction markets, structured financial products, or digital asset vaults can now easily connect to Hyperliquid’s trading technology – including order processing, margin lending, and payment settlement – without having to create those systems from scratch. Plus, Hyperliquid offers a competitive fee structure compared to other independent platforms.
Traders can manage related investments – including future contracts, perpetual swaps, and current market prices – all within a single account thanks to the platform’s flexible design. HYPE token holders will benefit from the system reducing the overall supply of tokens, but how much they benefit depends on how quickly Phase 2 is adopted. Polymarket and Kalshi aren’t facing immediate competition; even after Phase 2 launches, new templates for popular topics like politics and sports need to be approved before anyone can start trading on them.
What Comes Next
The team wants to let everyone know that all current specifications are still drafts and may be adjusted based on community feedback. They’ll share another update once they launch permissionless deployment on the test network, and they’ll update the documentation at that time.
For now, we’re basing pricing on these key details: a 500,000 HYPE stake, a six-month lock-up period, an initial allocation of 100 possible outcomes, a deployer fee share of up to 50%, the requirement of using the AQAv2 quote token, and the validator set reserving less than ten standard outcomes per year. The overall plan is becoming clear, even though some specifics are still being finalized.
2026-07-20 10:00