Hyperliquid Goes After Polymarket with Offchain Prediction Markets

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• Hyperliquid has launched canonical prediction markets for offchain events, expanding beyond its traditional perpetual futures market.

• The markets will be published by automated newsfeed software, which the validators will run as part of their normal operations.

Hyperliquid is expanding beyond derivatives and going after Polymarket, launching prediction markets for offchain events as the sector blows up.

Prediction markets have become one of the fastest-growing sectors. Last year, they generated over $4 billion in trading volume, and this year, this growth has accelerated. According to Dune Analytics, the sector processed $29.8 billion in April, 12% higher than the $26.5 billion recorded in March.

Polymarket has dominated the crypto side of prediction markets, but Hyperliquid is now pushing for its share of the market. In an announcement on Telegram, the DeFi giant revealed that it had launched canonical outcome markets based on offchain events.

Source: Hyperliquid on Telegram.

The outcome markets let Hyperliquid users vote yes or no on real-world events, from financial issues like US inflation or the Federal Reserve’s interest rate decisions, to election results and more. These contracts will be fully collateralized and will settle at either 1 USDC if correct or 0 USDC if wrong. Hyperliquid will not offer any leverage, and so, there will be no liquidation risk.

Hyperliquid Targets Polymarket’s Lead

Hyperliquid is taking a different path with its predictions markets from Polymarket and other on-chain competitors. It will rely on its existing validators to run automated newsfeeds as part of their day-to-day operations. It will not depend on any third-party sources or oracles. Resolution of the predictions will be processed on the validator layer.

This is different from Polymarket, which relies on the Universal Market Access (UMA), a decentralized oracle protocol running on Ethereum. UMA allows any user to propose an answer, and if nobody opposes it, it passes. If someone opposes it, UMA token holders vote on the correct outcome.

UMA has been at the heart of a lot of controversy within the Polymarket ecosystem. Some have claimed that many outcomes are manipulated, with UMA token holders incentivized to vote in certain ways. With millions of dollars hinging on the outcomes of some predictions, this has become concerning to both users and regulators.

Hyperliquid is going a different route to reduce cases of manipulation. Its own validators will receive the real-world news, decide on the markets to list and then vote on the outcomes through the network’s on-chain governance system.

The prediction markets are already live. The first was on the May CPI year-over-year, which will be settled based on the official data that the Bureau of Labor Statistics will publish on June 10. Immediately after launching, this market attracted $11,000 in volume, indicating that the market is likely to embrace the new product.

Hyperliquid has been expanding aggressively in recent months, moving from a crypto derivatives platform to include tokenized stocks and now, prediction markets. This has threatened market giants, with the NYSE parent company and the CME reportedly ganging up to pressure regulators to crack down on it.