Hyperliquid proposed HIP‑4 on February 2, introducing Event Perpetuals to expand the protocol into prediction‑market style outcome trading. The proposal, and a subsequent testnet deployment, shifted HYPE token sentiment, signalling investor interest in a non‑leveraged, fully collateralized market model.
HIP-4 redesigns Hyperliquid’s perpetual infrastructure to support binary outcome contracts that settle through a 0/1 oracle once an event concludes. Unlike traditional perpetuals that rely on continuous price oracles and funding rates for price discovery, this model lets market trading itself determine prices, with settlement occurring strictly at the final outcome.
The proposal removes leverage and liquidation risk by enforcing full collateralization and fixed contract ranges. Positions operate with 1x isolated margin, ensuring that counterparty exposure remains contained and that losses are limited to the collateral posted upfront. This structure prioritizes simplicity and risk control over capital amplification.
To further stabilize trading, HIP-4 introduces a 15-minute opening auction designed to reduce early price volatility, along with slot reuse to improve capital efficiency across markets. At event conclusion, contracts are settled in a binary manner—either 0 or 1—providing clear, deterministic outcomes aligned with the oracle’s final resolution.
What HIP‑4 proposes and how it works
Outcome trading was launched on Hyperliquid’s testnet immediately after the proposal, using curated initial markets for validation and feedback. The governance mechanism creates a Builders programme that requires a 1 million HYPE stake to create markets; Builders capture up to 50% of trading fees. Proponents argue this will drive HYPE staking demand and could lock up an estimated 10–20 million HYPE tokens if uptake is strong.
Analysts flagged trade‑offs. A high staking threshold could restrict market creation compared with more permissionless rivals, while many independent prediction markets risk fragmenting liquidity and producing shallow books despite Hyperliquid’s current TVL. Early February reports also noted the Commodity Futures Trading Commission was developing a regulatory framework for prediction markets, a backdrop that could influence market design and adoption.
For traders and treasuries, HIP‑4 reshapes optionality and risk profiles: it offers limited‑risk, non‑levered exposure to event outcomes while shifting market‑making and curation responsibilities onto Builders. If mainnet launches and Builder uptake meets expectations, HYPE staking could tighten circulating supply and alter tokenomics.
However, dispersed liquidity and the permissioned creation model will determine whether the new product attracts professional flow or remains a niche on‑chain experiment.
