According to Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom fund, Hyperliquid's entry into prediction markets is not just about cheaper trading, but about capturing the upside. The Hyperliquid Improvement Proposal (HIP)-4 introduces event trading on the platform with a zero-fee-to-open model.
Hayes argues that the real differentiator is Hyperliquid's exchange token, HYPE, which allows users to profit from platform activity. This sets it apart from competitors like Polymarket and Kalshi, which do not offer similar benefits. With a large user base, lower trading fees, and robust tech infrastructure, Hyperliquid's HIP-4 is poised to become a dominant prediction market venue. The HYPE token has a fully-diluted valuation of around $38 billion, compared to Polymarket's implied valuation of roughly $14 billion.
Hayes believes that users who own the HYPE token can directly profit from their usage of HIP-4, giving Hyperliquid a significant advantage in the market. In contrast, Polymarket is still navigating regulatory compliance, while Kalshi's model is built around compliance and licensing, without token incentives.
This contrast makes Kalshi the most direct test of Hayes' thesis, as users can trade event outcomes but have no path to the upside of the platform itself.