First-day trading volume surpasses Polymarket, Hyperliquid enters the prediction market with BTC binary options

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Author | Asher (@Asher_0210)

On May 2nd, Hyperliquid launched HIP-4 Outcome Markets on the mainnet, officially bringing outcome markets into its on-chain trading system. The first batch includes BTC intraday binary outcome contracts, allowing users to trade around whether BTC’s price at a specific time exceeds a designated price. Contract prices fluctuate between 0.001 and 0.999, representing the market’s implied probability of the event; upon occurrence, settlement is 1, and if not, settlement is 0. The contracts are fully collateralized with USDH, with no opening fees.

This is not just a simple product expansion. In the past, Polymarket was more like an information market centered around events, where users entered specific markets based on elections, sports, geopolitical conflicts, or crypto hot topics, expressing their judgments through prices; Kalshi, on the other hand, aimed to embed event contracts within a clearer regulatory framework.

Hyperliquid’s approach is different. It doesn’t start by building an independent prediction market to attract user migration, but rather directly integrates the most familiar trading scenarios—bringing outcome contracts together with perpetuals and spot trading in the same environment. For Hyperliquid, prediction markets are not just about betting on a result, but a new tool for traders to express direction, manage risk, and develop strategies.

BTC intraday market success, data exceeds expectations on the first day

HIP-4’s first market is a daily settlement BTC price performance market. This choice is inherently “Hyperliquid”—not based on political, sports, or entertainment events, but centered around the most familiar crypto trading asset: BTC price fluctuations.

On the first day of launch, HIP-4 delivered impressive data. According to Predictefy, on the first day of Hyperliquid’s event contracts, trading volume for BTC-related event contracts reached $6.15 million, far surpassing similar markets on Kalshi, Polymarket, and other prediction platforms. In other words, in the niche of BTC price-related event contracts alone, Hyperliquid’s first day already ranks at the top.

Data source: Predictefy

Additionally, the total trading volume on HIP-4’s first day exceeded $12k, with over 54k trades and more than 3,000 participants. For a newly launched prediction market event, these figures are already quite remarkable. It wasn’t achieved by spreading across many event categories, but through a cold start within a single BTC intraday market, making HIP-4’s initial step even more valuable.

Why HIP-4 is not just a simple upgrade from HIP-3

Hyperliquid previously supported Builder deploying perpetual markets via HIP-3. So the question is, since perpetual markets are already deployable, why design HIP-4 separately? The answer lies in the completely different settlement logic of outcome contracts.

Perpetual contracts require continuous pricing, with oracle prices adjustable over time; but binary outcome contracts can only settle as 0 or 1. Using an oracle mechanism unsuitable for binary contracts could leave a long window of mispricing after the event result is known, creating near-riskless arbitrage opportunities.

Therefore, HIP-4 is designed as a separate primitive for outcome markets. It’s not just a re-skin of perpetuals, but a specialized contract type for expiration, settlement, disputes, and oracle result confirmation. For ordinary users, prediction markets seem like just buying Yes or No; but for the actual trading system, the real challenge lies in how events are defined, who confirms them, when settlement occurs, how disputes are handled, and how incorrect results are corrected and penalized. The core of prediction markets is not just the frontend and trading interface, but the settlement mechanism itself.

Hyperliquid’s battlefield compared to Polymarket and Kalshi

Looking at Hyperliquid’s HIP-4, Polymarket, and Kalshi together, they represent three directions in prediction markets:

Polymarket’s core strength is event richness and user perception: it excels at turning complex events into tradable questions, combining public attention, media coverage, and market probabilities. Political elections, geopolitical conflicts, celebrity events, sports matches, and crypto project milestones can quickly become markets.

Kalshi’s advantage is its compliance pathway: it’s closer to traditional financial contexts for event contracts, targeting users and regulatory frameworks that differ from Polymarket and Hyperliquid. Recent debates over prediction market regulation in the US, along with conflicts between CFTC and state regulators, show that event contracts are no longer fringe products but are entering the core of financial regulation discussions.

Hyperliquid’s strength lies in trading experience and capital efficiency: it has its own L1, HyperCore matching engine, on-chain order book, and infrastructure for spot and perpetual trading. Official documentation states that HyperCore includes fully on-chain perpetual and spot order books, with transparent execution of orders, cancellations, trades, and settlements, capable of handling 200k orders per second.

Thus, Hyperliquid may not immediately take all Polymarket users in the short term. A casual user interested in US elections, sports, or entertainment gossip might not switch to Hyperliquid just to buy an event contract. But a trader already engaged in trading BTC, ETH, gold, oil, or stocks via Hyperliquid’s perpetuals might naturally include BTC intraday outcome contracts as part of their portfolio.

HYPE could become the value capture mechanism in this competition

HIP-4’s significance for Hyperliquid is not just adding a new trading scenario; it further links prediction markets with HYPE’s staking, fee, and buyback mechanisms. According to HIP-4’s design, the first phase involves validators deploying standardized markets, and the second phase will open permissionless deployment. Future market creators will need to stake 1 million HYPE tokens to create their own prediction markets. Each staking position can support rolling and cyclic markets, which can be reused after settlement; if oracle manipulation, market anomalies, or long-term outages occur, staked assets may be confiscated.

This threshold is significantly higher than HIP-3’s 500k HYPE. The reason is straightforward: outcome markets depend more heavily on event definitions and oracle settlement than perpetuals. While perpetual prices can adjust continuously, outcome markets only settle as 0 or 1. If settlement errors occur, the damage is not just to a single market’s trading experience but to the entire prediction market’s credibility.

For HYPE, HIP-4 introduces two incremental demands. First, staking demand: more builders wanting to deploy outcome markets will need to lock more HYPE. Especially as categories like sports, macro, politics, crypto events, and entertainment open up, high-quality market creation rights could become a high-threshold operational privilege. Second, fee and buyback logic: Hyperliquid already has strong trading volume and fee capture capabilities, with most protocol fees used for HYPE buybacks. If HIP-4 drives new trading volume, outcome markets will not just be a new feature but part of a flywheel for fee growth and HYPE buybacks.

This is a key difference between Hyperliquid and Polymarket or Kalshi. Polymarket and Kalshi’s growth mainly reflects increases in platform trading volume, market share, and brand influence; whereas Hyperliquid’s growth will more directly translate into demand for HYPE and value capture.

Market optimism, but HIP-4 still needs to prove itself

Market feedback on HIP-4 is generally optimistic, and the reasons are simple. Hyperliquid already has mature trading infrastructure, active users, and a clear mechanism for HYPE’s value capture. Entering prediction markets doesn’t require rebuilding matching engines or finding the first traders from scratch.

However, HIP-4 is still very early. Currently, the market focus is on BTC price outcomes, and whether it can expand into sports, politics, macro, crypto events, and entertainment categories depends on whether the permissionless deployment in phase two proceeds smoothly. Additionally, outcome markets demand higher standards for oracle and settlement mechanisms, with event definitions, data sources, dispute resolution, and error correction directly affecting market trust.

Therefore, HIP-4’s significance is not that Hyperliquid has already won the prediction market race, but that it has provided a new competitive direction. Polymarket proved that events can become information markets; Kalshi represents a compliant path for event contracts; Hyperliquid aims to demonstrate that event contracts can also be integrated into on-chain trading systems.

If past prediction market competition was about who could capture more hot events and attract more users to bet, then after HIP-4, a new dimension emerges: who can truly embed event outcomes into traders’ capital, positions, and strategies.

This also means that Polymarket’s competitors are no longer just Kalshi. With Hyperliquid entering the scene, the next phase of prediction markets may involve not just competition between event markets, but competition among trading systems, liquidity, and asset pricing capabilities.