After the World Cup, HIP-4 Awaits Its 'Election Day'

Original Title: HIP-4 Must Get Ready for the Midterms
Original Author: David Christopher, Bankless
Original Compilation: Saoirse, Foresight News

Hyperliquid HIP-4 predicts the largest success of the prediction market to date, stemming from World Cup-related trading.

I did not anticipate this situation. When HIP-4 was first launched, I suggested that Hyperliquid was not actually aiming to compete directly with Polymarket and Kalshi. These types of outcome prediction markets are more like an extension tool of its trading system: providing daily binary contracts in cryptocurrency to hedge perpetual contracts, build options-like risk exposure, while allowing traders to keep all their positions unified within the Hyperliquid platform.

However, the subsequent developments were unexpected. Hyperliquid successively launched trading markets related to the NBA Finals, individual World Cup matches, and championship events. These three types of markets (with the latter two contributing the majority of trading volume) accounted for about 48% of HIP-4's total trading volume to date.

After the peak trading enthusiasm for the World Cup, the scale of related open contracts dropped by over 90%. However, objectively speaking, this does not mean that HIP-4 has failed; it simply lacks event subjects with trading enthusiasm at the moment.

Currently, the system is still in a permissioned mode, where all trading markets need to be manually created and launched by validators. Most of the remaining markets on the platform are related to cryptocurrency price trends, with dismal trading volumes that cannot compare to the trading volume driven by sports events.

Hyperliquid now aims to break this limitation. On July 31, the permissionless deployment feature of HIP-4 was launched on the testnet, clearing the way for third-party teams to independently create and operate outcome prediction markets, while also clarifying the conditions that need to be met for operational implementation.

 > From May to August 2026, 47.8% of HIP-4's trading volume came from sports event markets, with the World Cup contributing the vast majority of sports trading volume, highlighting the platform's heavy reliance on major hot events to attract trading flow.

Operation Mechanism of HIP-4 in Permissionless Mode

It is important to note: permissionless deployment ≠ unrestricted market creation.

According to the preliminary plan for the mainnet: validators first approve market templates, which are a set of reusable standard frameworks defining market creation rules and settlement methods. Deployers then select approved templates to create specific trading markets, filling in information such as trading topics, optional outcomes, expiration times, and settlement criteria.
One thing is certain: deployers only need to call upon the templates that have been approved by validators to generate markets, without needing to apply for approval for each individual market.
Consistent with the HIP-3 mechanism, deployers need to accurately define market rules and properly complete settlements. If there are significant errors, validators have the right to confiscate their staked assets.
The plan requires deployers to stake 500,000 HYPE (the same standard as HIP-3), with a staking lock-up period of 6 months; only after all markets under their name have been settled can deployers withdraw their staked assets. Initially, each deployer can create up to 100 outcome subjects; after market settlements are completed, the quota can be reused. The platform plans to expand additional quotas through auction methods. Ultimately, deployers can earn up to 50% of the trading fees from the markets they create.

After the World Cup Craze, Where is the Next Core Opportunity?

The most obvious target: the U.S. midterm elections.

Prediction markets initially entered the public eye through political topics. Kalshi and Polymarket have already built comprehensive election trading panels covering congressional control, various district campaigns, total seat counts, and other types of markets, while HIP-4 has not yet launched any related subjects.


Whether third-party deployers can fill this gap depends on when the permissionless HIP-4 goes live on the mainnet. Historical reference: HIP-3 took 164 days from the launch of the first permissionless testnet version to the mainnet rollout; however, from the release of the initial mainnet specifications to the official launch, only 18 days elapsed.

HIP-4's current progress is between the two: the preliminary architecture of the mainnet has been made public, and the testnet has opened deployment features, but the mainnet-level bug bounty program has not yet been launched, leaving the overall progress in an uncertain stage.

If this system can go live on time, deployers will be able to build a complete election trading area based on the midterm elections, rather than launching scattered independent campaign topic markets—provided that validators simultaneously approve trading templates that support election scenarios.

If the permissionless deployment misses the midterm election window, validators can still manually launch various midterm election markets. Even so, HIP-4 can still attract trading flow, but it will miss its first major practical opportunity: failing to prove to the market that external third-party deployers can continuously supply timely popular trading markets for the platform.

The World Cup has already proven that Hyperliquid users are willing to participate in trading significant real-world events. At the same time, the rapid decline in trading volume after the World Cup also exposes a pain point: without major events, the platform struggles to maintain activity.

The current surge in interest for the midterm elections presents an excellent opportunity for HIP-4. The platform can not only maintain market enthusiasm but also promote the implementation of permissionless deployment. In the coming weeks, relevant progress can be closely monitored.

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