{"id":"hip-4","title":"HIP-4","content":"## Hyperliquid Improvement Proposal 4 (HIP-4)\n\n**Hyperliquid Improvement Proposal 4 (HIP-4)** is the designation used for two distinct proposals aimed at expanding the trading capabilities of the [Hyperliquid](https://iq.wiki/wiki/hyperliquid) decentralized exchange. The most recent proposal, announced by the [Hyperliquid](https://iq.wiki/wiki/hyperliquid) team on February 2, 2026, focuses on introducing \"Outcome Trading\" through a new primitive called \"Outcome Contracts\" to enable prediction markets and options-like instruments [\\[1\\]](#cite-id-J91Ikrid39InBhls) [\\[2\\]](#cite-id-YARRDOOv4CIZe3v7). An earlier proposal from September 2025, also named HIP-4, was submitted by third-party contributors and focused on a product called \"Event Perpetuals\" to solve challenges related to deploying prediction markets on the platform [\\[3\\]](#cite-id-TlCqLFJZob2QznvP) [\\[4\\]](#cite-id-mGLEi9nMX7yTyERb).\n\n## HIP-4: Outcome Trading (February 2026 Proposal)\n\nOn February 2, 2026, the [Hyperliquid](https://iq.wiki/wiki/hyperliquid) team announced its own version of HIP-4, introducing a new primitive called \"Outcome Trading\" to the protocol [\\[2\\]](#cite-id-YARRDOOv4CIZe3v7). This proposal aims to support a wider range of financial products beyond the platform's core offering of perpetual futures. The development was initiated in response to what the team described as \"extensive user demand\" for both prediction markets and options-style derivatives [\\[1\\]](#cite-id-J91Ikrid39InBhls).\n\n### Key Features and Technology\n\nThe core of this proposal is the \"Outcome Contract,\" a new general-purpose primitive designed to be built on [Hyperliquid](https://iq.wiki/wiki/hyperliquid)'s core infrastructure, [HyperCore](https://iq.wiki/wiki/hypercore) [\\[2\\]](#cite-id-YARRDOOv4CIZe3v7).\n\nKey characteristics of Outcome Contracts include:\n\n* **Full Collateralization:** Unlike leveraged perpetuals, these contracts are fully collateralized, meaning the maximum potential loss is the capital committed upfront. This design completely removes the risk of liquidations for traders of these instruments [\\[1\\]](#cite-id-J91Ikrid39InBhls).\n* **Fixed Settlement Range:** Each contract settles at a fixed price within a predetermined range, making them suitable for binary or bounded outcomes [\\[2\\]](#cite-id-YARRDOOv4CIZe3v7).\n* **Dated Markets:** The proposal introduces contracts with specific expiration dates, a feature distinct from the platform's existing perpetual offerings [\\[1\\]](#cite-id-J91Ikrid39InBhls).\n* **Non-Linear Payoffs:** Outcome Contracts allow for more complex profit-and-loss structures compared to the linear payoffs of perpetual futures [\\[1\\]](#cite-id-J91Ikrid39InBhls).\n* **Compositionality:** The primitive is designed to be compatible with other [Hyperliquid](https://iq.wiki/wiki/hyperliquid) features, such as portfolio margin and the HyperEVM, allowing developers to build novel applications [\\[2\\]](#cite-id-YARRDOOv4CIZe3v7).\n\nThe primary initial applications for Outcome Contracts are prediction markets and bounded, options-like derivatives. The canonical markets are planned to be denominated in [USDH](https://iq.wiki/wiki/usdh) [\\[2\\]](#cite-id-YARRDOOv4CIZe3v7).\n\n### Proposed Implementation Roadmap\n\nThe rollout of Outcome Trading is planned in multiple phases to ensure stability and incorporate community feedback [\\[1\\]](#cite-id-J91Ikrid39InBhls). As of the announcement on February 2, 2026, the feature was actively being developed and tested on the [Hyperliquid](https://iq.wiki/wiki/hyperliquid) [testnet](https://iq.wiki/wiki/testnet) [\\[2\\]](#cite-id-YARRDOOv4CIZe3v7).\n\nThe planned phases are:\n\n1. **Phase 1: Testnet Launch:** Initial deployment on a testnet for final technical development and testing.\n2. **Phase 2: Mainnet Launch with Curated Markets:** Following a successful testnet phase, the feature will launch on the mainnet with a limited set of markets curated by the [Hyperliquid](https://iq.wiki/wiki/hyperliquid) team and settled using objective data sources [\\[1\\]](#cite-id-J91Ikrid39InBhls) [\\[2\\]](#cite-id-YARRDOOv4CIZe3v7).\n3. **Phase 3: Potential Permissionless Listing:** Depending on the success of the initial phases, the infrastructure may be opened up for permissionless deployment. This would allow any user to create their own outcome-based markets, potentially under a similar model to Hyperliquid's permissionless perpetual markets, which require staking 500,000 HYPE tokens [\\[1\\]](#cite-id-J91Ikrid39InBhls).\n\nAs of May 2, 2026, HIP-4 binary prediction markets were live on Hyperliquid’s mainnet with curated canonical markets, indicating progression to Phase 2 of the rollout [\\[6\\]](#cite-id-iR1jC57v3TKtA8tc).\n\n### Launch and Exchange Support\n\n​[Bitget](https://iq.wiki/wiki/bitget) reported on May 2, 2026, that [Hyperliquid](https://iq.wiki/wiki/hyperliquid) launched binary prediction markets under HIP-4 on mainnet, positioning them as rivals to existing prediction platforms such as [Polymarket](https://iq.wiki/wiki/polymarket) and [Kalshi](https://iq.wiki/wiki/kalshi). The report characterized the new markets as binary/outcome-based instruments designed to broaden [Hyperliquid](https://iq.wiki/wiki/hyperliquid)’s product set, with trades executed on an on-chain CLOB, fully collateralized payoffs that settle to 0 in [USDH](https://iq.wiki/wiki/usdh), and a zero-fee-to-open model. [Bitget](https://iq.wiki/wiki/bitget) also noted a ~15-minute opening auction for new markets and that builders must stake 1,000,000 HYPE to deploy markets. [Bitget](https://iq.wiki/wiki/bitget) did not state that it was listing or offering direct trading access on [Bitget](https://iq.wiki/wiki/bitget) Exchange; the article served as news coverage and pointed users to [Hyperliquid](https://iq.wiki/wiki/hyperliquid)’s app for access [\\[6\\]](#cite-id-iR1jC57v3TKtA8tc).\n\n## Previous HIP-4 Proposal: Event Perpetuals (September 2025)\n\nPrior to the team's official 2026 announcement, another proposal also designated HIP-4 was introduced on September 16, 2025 [\\[4\\]](#cite-id-mGLEi9nMX7yTyERb). Titled \"HIP-4: Event Perpetuals,\" this proposal was authored by four contributors, including [John Wang](https://iq.wiki/wiki/john-wang), the Head of Crypto at the CFTC-regulated prediction market [Kalshi](https://iq.wiki/wiki/kalshi), and the research entity Bedlam Research [\\[3\\]](#cite-id-TlCqLFJZob2QznvP) [\\[4\\]](#cite-id-mGLEi9nMX7yTyERb).\n\n### Rationale and Problem Addressed\n\nThis version of HIP-4 was created as an extension of HIP-3, which had enabled builders to deploy their own perpetuals markets. The authors identified that HIP-3's mechanics were unsuitable for binary outcome prediction markets. The key limitations were [\\[4\\]](#cite-id-mGLEi9nMX7yTyERb):\n\n* **Slow Price Adjustment:** The existing infrastructure restricted price changes to 1% per tick, making it too slow to settle a market to a definitive 0 or 1 outcome. This \"asymmetric resolution problem\" could take nearly an hour for a market to decay to zero.\n* **Arbitrage Vulnerabilities:** The slow settlement time created significant arbitrage opportunities for traders who had information about a resolved event before the market price could catch up.\n* **Oracle Dependency:** The system's reliance on a continuous oracle price feed was not practical for events that resolve instantaneously, such as the outcome of a sports game or an election [\\[3\\]](#cite-id-TlCqLFJZob2QznvP).\n\n### Technical Design of Event Perpetuals\n\nTo solve these issues, the proposal introduced \"Event Perpetuals,\" a specialized derivative designed for binary prediction markets [\\[4\\]](#cite-id-mGLEi9nMX7yTyERb).\n\n#### Market Launch\n\nA key innovation was a 15-minute opening auction to establish an initial market price. The system would algorithmically determine a single clearing price that maximized trading volume, minimized the buy/sell imbalance, and, as a final tie-breaker, was closest to 0.50. All initial orders would execute at this single price before the market transitioned to continuous trading [\\[4\\]](#cite-id-mGLEi9nMX7yTyERb).\n\n#### Trading and Settlement\n\n* **Oracle-Free Trading:** After the opening auction, trading would occur freely on the order book without a continuous oracle feed, with prices representing the market-implied probability of the event [\\[3\\]](#cite-id-TlCqLFJZob2QznvP).\n* **No Funding Rate:** Unlike standard perpetuals, these markets would not have a funding mechanism [\\[4\\]](#cite-id-mGLEi9nMX7yTyERb).\n* **Binary Settlement:** Upon the event's conclusion, a resolution oracle would post the final outcome (0 or 1), trading would be halted, and all positions would be settled instantly. The proposal included an optional dispute window before final settlement [\\[3\\]](#cite-id-TlCqLFJZob2QznvP).\n* **Margin:** The proposal specified 1x isolated margin, requiring traders to fully collateralize their positions based on their maximum potential loss [\\[4\\]](#cite-id-mGLEi9nMX7yTyERb).\n\n### Deployment and Governance Requirements\n\nUnder this proposal, builders could deploy their own Event Perpetual markets by staking **1,000,000 HYPE** tokens [\\[3\\]](#cite-id-TlCqLFJZob2QznvP). Builders would be responsible for defining the event terms and resolution criteria and would be granted the ability to set and collect additional trading fees of up to 50% on their deployed markets [\\[3\\]](#cite-id-TlCqLFJZob2QznvP) [\\[4\\]](#cite-id-mGLEi9nMX7yTyERb).\n\n## Underlying Technology: HyperCore\n\nBoth HIP-4 proposals are designed to be implemented on **HyperCore**, the specialized Layer 1 blockchain that powers the [Hyperliquid](https://iq.wiki/wiki/hyperliquid) exchange [\\[5\\]](#cite-id-JAy8wG7nSYJoLKHl). [HyperCore](https://iq.wiki/wiki/hypercore) is designed for high-performance decentralized finance, with its state split between the core matching engine and a general-purpose, EVM-compatible environment known as the HyperEVM. Unlike many exchanges, it does not use an off-chain order book, instead processing all transactions through its on-chain consensus mechanism [\\[5\\]](#cite-id-JAy8wG7nSYJoLKHl).\n\n### Architecture and Consensus\n\nHyperliquid's L1 uses a Proof of Stake (PoS) consensus algorithm named **HyperBFT**, which is a variant of HotStuff consensus. Validators produce blocks in proportion to their staked native tokens, and the mechanism is optimized for low end-to-end latency [\\[5\\]](#cite-id-JAy8wG7nSYJoLKHl).\n\n### Performance and Scalability\n\nAccording to documentation updated in early 2025, the [Hyperliquid](https://iq.wiki/wiki/hyperliquid) mainnet demonstrated significant performance capabilities:\n\n* **Latency:** For a geographically co-located client, the median end-to-end latency (from request sent to response received) was 0.2 seconds, with the 99th percentile at 0.9 seconds.\n* **Throughput:** The chain could process approximately 200,000 orders per second. The documentation noted that the primary performance bottleneck was the execution logic, while the underlying consensus and networking layers were capable of scaling to \"millions of orders per second\" with future optimizations.\n\nThese technical specifications form the foundation upon which features like Outcome Trading and Event Perpetuals are built [\\[5\\]](#cite-id-JAy8wG7nSYJoLKHl).","summary":"HIP-4 is a Hyperliquid Improvement Proposal for outcome-based trading. The proposal, announced in February 2026, aims to add outcome contracts for prediction ma...","images":[{"id":"Qma35ruqaJbpETEGRdNmrhfeFuvaJbZNmFM1aYiUi1mKN9","type":"image/jpeg, image/png"}],"categories":[{"id":"defi","title":"Decentralized Finance"}],"tags":[{"id":"Protocols"},{"id":"Developers"}],"media":[],"metadata":[{"id":"twitter_profile","value":"https://x.com/HyperliquidX"},{"id":"references","value":"[{\"id\":\"J91Ikrid39InBhls\",\"url\":\"https://www.coindesk.com/markets/2026/02/02/hyperliquid-s-hype-higher-by-10-on-plans-to-add-prediction-markets-and-options\",\"description\":\"CoinDesk report on Hyperliquid's plans for prediction markets\",\"timestamp\":1770046862574},{\"id\":\"YARRDOOv4CIZe3v7\",\"url\":\"https://x.com/HyperliquidX/status/2018327360723202167\",\"description\":\"Official Hyperliquid announcement of HIP-4: Outcome Trading\",\"timestamp\":1770046862574},{\"id\":\"TlCqLFJZob2QznvP\",\"url\":\"https://blockworks.co/news/hyperliquid-frontier-for-innovation\",\"description\":\"Blockworks article on Bedlam Research's HIP-4 proposal\",\"timestamp\":1770046862574},{\"id\":\"mGLEi9nMX7yTyERb\",\"url\":\"https://cryptoslate.com/kalshi-exec-submits-hyperliquid-improvement-proposal-to-solve-prediction-market-deployment-challenges\",\"description\":\"CryptoSlate coverage of the Event Perpetuals proposal\",\"timestamp\":1770046862574},{\"id\":\"JAy8wG7nSYJoLKHl\",\"url\":\"https://hyperliquid.gitbook.io/hyperliquid-docs/hypercore/overview\",\"description\":\"Hyperliquid docs overview of HyperCore\",\"timestamp\":1770046862574},{\"id\":\"iR1jC57v3TKtA8tc\",\"url\":\"https://www.bitget.com/news/detail/12560605394797\",\"description\":\"Bitget News on HIP-4 launch\",\"timestamp\":1777844547889},{\"id\":\"q6Qqz3VQAlQqO5uM\",\"url\":\"https://www.coindesk.com/markets/2026/04/30/hyperliquid-s-hype-token-could-be-its-prediction-market-weapon-arthur-hayes-says\",\"description\":\"CoinDesk Apr 30: Hayes on HYPE and HIP-4\",\"timestamp\":1777844547889}]"},{"id":"previous_cid","value":"\"https://ipfs.everipedia.org/ipfs/QmNSvNLJNDEusX871DEnUqmvnFgFgRriuHvhGY1y6Ywx9p\""},{"id":"commit-message","value":"\"Expanded title defi to Decentralized Finance\""},{"id":"previous_cid","value":"QmNSvNLJNDEusX871DEnUqmvnFgFgRriuHvhGY1y6Ywx9p"}],"events":[],"user":{"id":"0x8af7a19a26d8fbc48defb35aefb15ec8c407f889"},"author":{"id":"0x8AF7a19a26d8FBC48dEfB35AEfb15Ec8c407f889"},"operator":{"id":"0x1E23b34d3106F0C1c74D17f2Cd0F65cdb039b138"},"language":"en","version":1,"linkedWikis":{"blockchains":["hyperliquid"],"founders":[],"speakers":[]},"recentActivity":"{\"items\":[{\"id\":\"a8015a81-95ef-400d-a929-cab663ccceab\",\"title\":\"HIP-4\",\"description\":\"HIP-4 is a Hyperliquid Improvement Proposal for outcome-based trading. The proposal, announced in February 2026, aims to add outcome contracts for prediction ma...\",\"timestamp\":\"2026-05-03T21:46:58.652Z\",\"category\":\"Decentralized Finance\",\"status\":{\"icon\":\"RiGlobalLine\",\"label\":\"Wiki Updated\",\"iconClassName\":\"text-green-500\"},\"user\":{\"name\":\"0x8AF7a19a26d8FBC48dEfB35AEfb15Ec8c407f889\",\"address\":\"0x1E23b34d3106F0C1c74D17f2Cd0F65cdb039b138\"},\"button\":{\"label\":\"View Summary\",\"icon\":\"RiFileTextLine\"},\"summarySections\":[{\"title\":\"Title\",\"subtitle\":\"Title changed\",\"variant\":\"modified\",\"changeCount\":1,\"changes\":[\"Changed title from \\\"defi\\\" to \\\"Decentralized Finance\\\"\"]},{\"title\":\"Summary\",\"subtitle\":\"Summary text updated (shortened/truncated)\",\"variant\":\"modified\",\"changeCount\":1,\"changes\":[\"Replaced summary text: \\\"HIP-4 is a Hyperliquid Improvement Proposal for outcome-based trading. The proposal, announced in February 2026, aims to add outcome contracts for prediction markets and options-style derivatives, distinct from a prior 2025 proposal for event perpetuals.\\\" -> \\\"HIP-4 is a Hyperliquid Improvement Proposal for outcome-based trading. The proposal, announced in February 2026, aims to add outcome contracts for prediction ma...\\\"\"]},{\"title\":\"Content\",\"subtitle\":\"Main article content updated: added HyperCore link, added mainnet launch status and a new 'Launch and Exchange Support' section with Bitget coverage; some minor wording/formatting changes\",\"variant\":\"modified\",\"changeCount\":3,\"changes\":[\"Added explicit linked reference for HyperCore in the Outcome Contracts description: added \\\"[HyperCore](https://iq.wiki/wiki/hypercore)\\\" where HyperCore was previously unlinked. [[1]](#cite-id-J91Ikrid39InBhls) [[2]](#cite-id-YARRDOOv4CIZe3v7) [[3]](#cite-id-TlCqLFJZob2QznvP) [[4]](#cite-id-mGLEi9nMX7yTyERb) [[5]](#cite-id-JAy8wG7nSYJoLKHl) [[6]](#cite-id-iR1jC57v3TKtA8tc)\",\"Added status/progression note: \\\"As of May 2, 2026, HIP-4 binary prediction markets were live on Hyperliquid’s mainnet with curated canonical markets, indicating progression to Phase 2 of the rollout.\\\" [[1]](#cite-id-J91Ikrid39InBhls) [[2]](#cite-id-YARRDOOv4CIZe3v7) [[3]](#cite-id-TlCqLFJZob2QznvP) [[4]](#cite-id-mGLEi9nMX7yTyERb) [[5]](#cite-id-JAy8wG7nSYJoLKHl) [[6]](#cite-id-iR1jC57v3TKtA8tc)\",\"Added a new section \\\"Launch and Exchange Support\\\" describing Bitget coverage: reports Hyperliquid launched binary prediction markets on mainnet, positions these markets vs Polymarket/Kalshi, notes on on-chain CLOB, fully collateralized payoffs that settle to 0 in USDH, zero-fee-to-open model, ~15-minute opening auction for new markets, and that builders must stake 1,000,000 HYPE to deploy markets. (Bitget coverage referenced). [[1]](#cite-id-J91Ikrid39InBhls) [[2]](#cite-id-YARRDOOv4CIZe3v7) [[3]](#cite-id-TlCqLFJZob2QznvP) [[4]](#cite-id-mGLEi9nMX7yTyERb) [[5]](#cite-id-JAy8wG7nSYJoLKHl) [[6]](#cite-id-iR1jC57v3TKtA8tc)\"]},{\"title\":\"Events\",\"subtitle\":\"Events list replaced with an empty array; three events removed\",\"variant\":\"modified\",\"changeCount\":3,\"changes\":[\"Removed event: \\\"HIP-4: Event Perpetuals Proposed\\\" — date: 2025-09, id: 8a5ad5b1-73c4-4d8a-baf6-aad988eb7f16, link: https://cryptoslate.com/kalshi-exec-submits-hyperliquid-improvement-proposal-to-solve-prediction-market-deployment-challenges/\",\"Removed event: \\\"HIP-4: Outcome Trading Proposed\\\" — date: 2026-02, id: 397f7aeb-dc84-4847-ab75-7cb86d94146c, link: https://www.coindesk.com/markets/2026/02/02/hyperliquid-s-hype-higher-by-10-on-plans-to-add-prediction-markets-and-options\",\"Removed event: \\\"HIP-4 Founded\\\" — date: 2026-02-02, id: a3319e0b-770b-4bf0-88e9-f6ed5d73e377 (type: CREATED)\"]},{\"title\":\"Speakers\",\"subtitle\":\"Speakers field removed\",\"variant\":\"removed\",\"changeCount\":1,\"changes\":[\"Removed empty \\\"speakers\\\" array from the wiki metadata\"]},{\"title\":\"References / Metadata\",\"subtitle\":\"References/metadata entries changed: previous 'references' metadata removed; metadata value(s) replaced/expanded and a new 'wiki-score' metadata entry added\",\"variant\":\"modified\",\"changeCount\":4,\"changes\":[\"Removed metadata entry with id \\\"references\\\" that contained a JSON-string list of five references (ids: J91Ikrid39InBhls, YARRDOOv4CIZe3v7, TlCqLFJZob2QznvP, mGLEi9nMX7yTyERb, JAy8wG7nSYJoLKHl).\",\"Removed metadata value: \\\"https://hyperliquid.gitbook.io/hyperliquid-docs/hypercore/overview\\\" (previous standalone value).\",\"Added metadata entry \\\"wiki-score\\\" with value \\\"69\\\".\",\"Added/Updated metadata value to a JSON-string array of references including existing references (J91Ikrid39InBhls, YARRDOOv4CIZe3v7, TlCqLFJZob2QznvP, mGLEi9nMX7yTyERb, JAy8wG7nSYJoLKHl) plus two new reference items: iR1jC57v3TKtA8tc (Bitget News on HIP-4 launch) and q6Qqz3VQAlQqO5uM (CoinDesk Apr 30: Hayes on HYPE and HIP-4).\"]}]}]}"}