According to Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom fund, Hyperliquid's foray into prediction markets is focused on capturing the upside, not just reducing trading costs. Hyperliquid is set to launch a zero-fee-to-open model for event trading under HIP-4, which Hayes believes will quickly become a dominant prediction market due to its large user base, low trading fees, and robust tech infrastructure. Hayes argues that the HYPE token allows users to directly profit from their usage of HIP-4, giving it an edge over Polymarket and Kalshi.
With a fully diluted valuation of around $38 billion, HYPE has a significant advantage over potential competitors. The geographic distribution of users also plays a role, with Hyperliquid's user base skewed towards Asia, where crypto-native trading is already well-established.
In contrast, Polymarket and Kalshi face regulatory constraints, with Polymarket rebuilding its US business and Kalshi's model built around compliance and licensing, rather than token incentives.