Prediction markets used to be a niche product for political bettors. Then Kalshi and Polymarket each pulled in hundreds of millions of dollars in volume on the 2024 U.S. election. Now the most active crypto exchange in the world wants in.
Hyperliquid is proposing to launch native prediction markets, a direct shot at Kalshi and Polymarket from a platform that already has a large and active trading base.
What Hyperliquid Is Proposing
The proposal, called HIP-4, is currently in public testing. It would let traders bet on real-world outcomes inside the same Hyperliquid interface where they already trade crypto, commodities, and equity-linked contracts.
The structural advantage is built into the platform. Hyperliquid users would not need to leave their existing account to trade event contracts. They could manage Bitcoin positions, oil exposure, and prediction market bets from one place.
That is a different distribution problem than what Polymarket or Kalshi face. Both companies built dedicated prediction market apps and have to convert new users one by one.
Where The Real Risk Is
On-chain researcher Fleck found that about 3.3% of Polymarket users are also active on Hyperliquid. Those overlapping users account for roughly 12% of Polymarket's total volume. In other words, the most active prediction market speculators already have a Hyperliquid login.
That is the kind of user overlap that gets noticed in board meetings.
Polymarket is currently raising at a $15 billion valuation, and earlier this month launched leveraged "perps" contracts. Kalshi has been working on similar derivatives. Both companies are expanding into the multi-asset trading space Hyperliquid already dominates.
Why The Competition Is Heating Up
Prediction markets have been the fastest-growing new product category in retail trading over the last 18 months. Kalshi got CFTC approval to list event contracts. Polymarket has the brand recognition and crypto-native user base. Hyperliquid has distribution and a very active trader base.
The three are now sliding toward the same product set, just from different starting points.
Worth Noting
The HIP-4 proposal is still in public testing, which means the launch timing is open. The next data point is whether Hyperliquid's user base actually shifts volume to native event contracts when they go live. If it does, the prediction market category gets a third major venue almost overnight.
