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CoinDesk1 min read
Hyperliquid’s HYPE token could be its prediction market weapon, Arthur Hayes says
TL;DR
Hyperliquid's HYPE token is positioned as a key asset in its new prediction market model, according to co-founder Arthur Hayes. The exchange aims to differentiate itself with zero-fee trading and benefits for HYPE token holders.
Key points
- Hyperliquid is launching a prediction market model under HIP-4
- HYPE token allows users to profit from platform activity
- Zero-fee trading model aims to attract more users
- Arthur Hayes believes Hyperliquid will outperform competitors
- Polymarket is expected to launch its own token
Mentioned in this story
HyperliquidBitMEXPolymarketKalshi
Leading decentralized exchange Hyperliquid's push into prediction markets is about who captures the upside, not just cheaper trading, according to Arthur Hayes, co-founder of BitMEX exchange and CIO of Maelstrom fund.
CoinDesk reported earlier that Hyperliquid is preparing a zero-fee-to-open model for event trading under HIP-4. The Hyperliquid Improvement Proposal (HIP)-4 is a proposal that introduces event trading on Hyperliquid.
Hayes said that structure is only the first layer. In a note to CoinDesk, he argued that the real differentiator is HYPE, Hyperliquid’s exchange token, which he said allows users to benefit from platform activity in a way Polymarket and Kalshi currently do not.
“HIP-4 will quickly become a dominate prediction market because of Hyperliquid's large user base, much cheaper trading fees, and very robust tech infrastructure,” Hayes told CoinDesk. “Users who own the $HYPE token can directly profit from their usage of HIP-4.”
Polymarket is expected to launch a token, often referred to as $POLY.
On Gate, premarket perpetual contracts tied to a potential $POLY token are trading around $14, implying a fully-diluted valuation of roughly $14 billion. HYPE, by comparison, has an FDV of about $38 billion, according to CoinGecko data.
Pre-listing markets are often highly speculative and can be thinly traded, meaning any implied valuation should be treated with caution and may not reliably reflect actual market demand.
The argument also comes down to geography. Polymarket registered with the CFTC last July and is rebuilding its U.S. business, putting compliance at the center of its strategy.
However, in Asia, it is still grappling with how regulators classify its product. It is geoblocked in Singapore, Thailand, and Taiwan, partially restricted in Japan. Meanwhile, in Hong Kong, prediction markets more broadly are on the radar of gambling regulators
Q&A
What is Hyperliquid's HYPE token and its role in prediction markets?
The HYPE token is Hyperliquid's exchange token that allows users to profit from platform activity, particularly in its new prediction market model.
How does Hyperliquid's HIP-4 proposal change event trading?
HIP-4 introduces a zero-fee-to-open model for event trading, aiming to enhance user engagement and trading efficiency on the platform.
What advantages does Hyperliquid offer over Polymarket and Kalshi?
Hyperliquid offers cheaper trading fees, a large user base, and a robust tech infrastructure, which are expected to make it a dominant player in prediction markets.
