According to Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom fund, Hyperliquid's foray into prediction markets is not just about cheaper trading, but also about capturing the upside. Hyperliquid's HIP-4 proposal introduces event trading with a zero-fee-to-open model. Hayes argues that the real differentiator is HYPE, Hyperliquid's exchange token, which allows users to profit from platform activity.
With a large user base, lower trading fees, and robust tech infrastructure, HIP-4 is poised to become a dominant prediction market. In contrast, Polymarket and Kalshi do not offer similar benefits to their users. While Polymarket is expected to launch its own token, HYPE has a fully-diluted valuation of around $38 billion, according to CoinGecko data.
The geographical landscape also plays a role, with Hyperliquid facing no regulatory constraints in Asia, where its user base is concentrated. In contrast, Polymarket and Kalshi face regulatory hurdles in various regions. The contrast is most pronounced with Kalshi, a CFTC-regulated exchange that prioritizes compliance over token incentives, limiting users' access to the platform's upside.
As the three platforms evolve, the structural split between them will be crucial in determining their respective market shares.