Hyperliquid is preparing to open its outcome markets to permissionless deployment, marking the next phase of its HIP-4 upgrade and positioning the decentralized exchange to compete more directly in the rapidly expanding prediction market sector.
The project announced on July 20 that a future network upgrade will allow qualified users — not just validators — to launch prediction markets on Hyperliquid. The feature will first be introduced on testnet before eventually expanding to mainnet, giving developers time to test the infrastructure and refine the system before a wider rollout.
The move represents a significant evolution for HIP-4, also known as Outcome Markets, which initially launched on Hyperliquid’s mainnet in May. While the first version relied on validators to create and oversee markets, the upcoming enhancement aims to decentralize the process by allowing community members to deploy markets themselves under standardized, validator-approved rules.
Hyperliquid Plans Permissionless Outcome Markets With HIP-4 Upgrade (Source: Telegram)
A builder-focused approach to prediction markets
Prediction markets have become one of the fastest-growing sectors in crypto, enabling users to trade on the outcomes of real-world events rather than traditional financial assets. Participants can speculate on everything from central bank interest rate decisions and election results to sporting events and entertainment announcements.
The market has been led by platforms such as Polymarket and Kalshi, whose growing popularity has also attracted major centralized companies including Coinbase and Robinhood. These firms are increasingly integrating prediction products alongside traditional crypto and financial trading services as demand for event-based markets accelerates.
Hyperliquid believes the universe of possible outcome markets is far larger than the number of spot or perpetual trading pairs available on traditional exchanges. Because new events emerge constantly, the protocol argues that permissionless deployment is essential for scaling the ecosystem beyond what validators alone could support.
Instead of requiring the protocol to manually approve every new market, HIP-4 will allow deployers to create markets using templates that have already been approved through validator voting. Those templates will define the rules, settlement conditions, and market structure, ensuring consistency while allowing anyone meeting the protocol’s requirements to launch new prediction markets.
According to Hyperliquid, multiple deployers will even be able to create markets based on the same template, encouraging competition while maintaining standardized rules.
Strict staking requirements designed to maintain quality
Although the deployment process will become permissionless, Hyperliquid is introducing substantial economic safeguards intended to discourage poor-quality markets or incorrect settlements.
Anyone wishing to launch outcome markets will be required to stake 500,000 HYPE tokens for six months. During that period, validators will retain the authority to slash part or all of the stake if a market violates protocol standards.
The proposal outlines several situations that could trigger penalties, including:
- Markets with ambiguous or poorly defined outcomes.
- Incorrect settlement that conflicts with the approved template.
- Markets that remain unresolved more than one week after the event outcome becomes known.
Deployers will only be able to unstake after every market they created has been properly settled.
The framework closely resembles Hyperliquid’s HIP-3 model for permissionless perpetual futures, where staking requirements also serve as a quality control mechanism while minimizing centralized oversight.
Validator-approved templates remain central
Rather than allowing unrestricted market creation, Hyperliquid plans to preserve quality through standardized templates voted on by validators.
These templates will be stored and enforced on-chain, creating a common framework for market definitions and settlement rules. Deployers will be free to choose any approved template but must strictly follow its requirements when creating and resolving markets.
Hyperliquid said this approach balances decentralization with reliability, reducing the risk of confusing or manipulable prediction markets while still enabling permissionless innovation.
The project also expects validator-created “canonical” markets to continue existing, although they are expected to become increasingly uncommon. Ideally, Hyperliquid said, fewer than ten validator-operated markets will be launched each year once permissionless deployment becomes fully operational.
Revenue incentives for market creators
Beyond opening market creation to the community, Hyperliquid also plans to financially reward deployers.
Future versions of HIP-4 will allow deployers to collect up to 50% of the trading fees generated by the markets they launch. Although configurable fee sharing is not yet available, the feature is intended to encourage builders to create high-quality prediction markets that attract sustained trading activity.
Initially, each deployer will receive an allocation allowing the creation of 100 outcomes, equivalent to 200 outcome tokens. Hyperliquid said it intends to introduce an auction mechanism in a later upgrade that would enable deployers to expand those quotas.
The project noted that the current design remains preliminary and may change based on community feedback gathered during the testnet phase.
Stablecoin settlement and ecosystem expansion
At launch, HIP-4 outcome markets will support only AQAv2 quote assets, which are settled using stablecoins participating in Hyperliquid’s Aligned Quote Asset framework.
Under that framework, stablecoin issuers must also stake 500,000 HYPE while contributing the majority of reserve-generated yield back to the protocol.
In June, Coinbase registered USDC under the program, making it eligible to become Hyperliquid’s primary settlement asset in the future and potentially replacing USDH as the platform’s default settlement currency.
The integration reflects Hyperliquid’s broader effort to expand its infrastructure beyond perpetual futures into a more comprehensive on-chain financial ecosystem.
HYPE continues to gain momentum
The HIP-4 announcement arrived as Hyperliquid continues to strengthen its position within decentralized derivatives.
According to market data from Coinglass, HYPE futures open interest recently approached $2.6 billion, putting the token nearly level with XRP futures in one of the closest races among major crypto derivatives markets. Meanwhile, Hyperliquid’s perpetual futures platform recorded approximately $266 billion in monthly trading volume during June, representing a 34% increase from May.
Following Sunday’s announcement, HYPE briefly climbed from an intraday low near $59.88 to above $60.50 before trading around $61.13. Although the price later softened alongside the broader crypto market, the token remains up more than 138% year to date.
Hyperliquid (HYPE) Price Performance (Source: CoinMarketCap)
If the permissionless rollout proceeds as planned, Hyperliquid could significantly expand beyond its core derivatives business by tapping into one of crypto’s fastest-growing segments. By combining decentralized deployment, validator oversight, and economic incentives, HIP-4 aims to create a scalable framework for prediction markets while preserving market integrity as participation grows.
