Hyperliquid announced that its upcoming enhancement to the HIP-4 upgrade will introduce permissionless deployment of prediction markets, expanding access beyond validator control. This change allows anyone to launch a prediction market using templates approved by validators.
Transition to Permissionless Markets
Currently, Hyperliquid’s prediction markets operate under the authority of validators. With the planned update, these markets will first be available on the testnet before launching on mainnet. Although markets controlled by validators will remain, they are expected to become rare, with fewer than 10 permitted annually, according to the platform.
The upgrade follows the launch of HIP-4 in May, which added outcome trading to Hyperliquid’s decentralized exchange. The future permissionless contracts will complement this by enabling wider market creation subject to governance-approved templates.
Staking and Revenue Model
To deploy a permissionless prediction market, users must stake 500,000 HYPE tokens. The staking mechanism is designed to penalize poorly defined or incorrectly settled markets through potential slashing, based on validator votes. Deployers stand to earn up to 50% of the trading fees generated by their markets.
This model aims to balance openness with quality control, maintaining market integrity while fostering growth. Following the announcement, Hyperliquid’s native token, HYPE, rose approximately 1%, moving from a low of $59.88 to around $60.79.
Context and Industry Impact
Prediction markets, primarily led by platforms like Polymarket and Kalshi, represent a multi-billion-dollar sector in blockchain. They allow users to wager on various events, ranging from central bank decisions to entertainment outcomes. The sector’s growing appeal has drawn in centralized platforms such as Coinbase and Robinhood, integrating prediction markets with traditional financial trading.
The FIFA World Cup, which ended recently with Spain’s third title, saw over $50 billion in prediction bets placed, underscoring the scale and interest in this market type.
