#What is HIP-4?
HIP-4 recently enhanced Hyperliquid by introducing outcome markets. Launched on the mainnet around May 2, this feature enables traders to place bets on specific events using fully collateralized contracts that settle between 0 and 1.
This functionality essentially merges prediction markets with trading capabilities in one platform. Traders can continue to utilize the same infrastructure they rely on for trading spot and perpetual contracts without the hassle of opening new accounts, bridging funds, or facing liquidation risks. All capital remains within Hyperliquid’s ecosystem.
#How Does HIP-4 Operate?
Contracts under HIP-4 are straightforward in concept. Each contract represents a binary or bounded outcome, settling within the range of 0 to 1. Traders who predict an event will occur should buy contracts closer to 1, while those who believe it will not happen should buy contracts closer to 0.
A crucial aspect of HIP-4 is full collateralization. Unlike perpetual futures that can lead to amplified losses and margin calls, outcome contracts require traders to fully collateralize the amount upfront. This eliminates the threat of sudden liquidation, providing a stable trading environment. The contracts will settle in USDH, Hyperliquid's native stablecoin.
The first market introduced is a daily recurring binary outcome linked to HyperCore’s BTC mark price, which settles every day at 06:00 UTC.
#What Makes HIP-4 Stand Out?
HIP-4 enhances HyperCore by introducing non-linear, date-sensitive payoffs, allowing the introduction of multi-outcome markets. This upgrade integrates seamlessly with Hyperliquid's existing portfolio margin system and HyperEVM. As a result, traders can manage spot positions, perpetuals, and outcome contracts from a singular margin account.
#Why Is This a Challenge for Polymarket?
Polymarket acts as a standalone prediction market platform. If traders want to engage in perpetuals or spot trading, they need to switch platforms. Hyperliquid aims to consolidate trading activities in one location, enabling users to simultaneously express views on BTC perpetuals, hold spot tokens, and bet on binary outcomes—all managed from a single margin account.
#What Does HIP-4 Mean for HYPE Token Holders?
HIP-4 has been under development for several months and the early announcement in February 2026 resulted in a notable increase in the HYPE token’s price. For holders of the HYPE token, the introduction of multiple product types on the platform is likely to increase trading volume, which typically leads to higher fees generated by the protocol. As HYPE holders benefit from the platform’s economic activities, increased usage will be advantageous.
The no-liquidation nature of outcome contracts may attract a different demographic of traders. These markets, backed by full collateralization, offer a risk-averse method to make directional bets without the stress of liquidation issues that often accompany leveraged trading.
Moreover, the integration with the portfolio margin allows traders to use unrealized profit and loss from perpetual positions as collateral for outcome bets or vice versa, enhancing capital efficiency beyond what standalone prediction platforms can offer.