According to Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom fund, Hyperliquid's foray into prediction markets is centered around capturing the upside of the platform, rather than just focusing on cheaper trading fees. Hyperliquid's zero-fee-to-open model for event trading under HIP-4 is set to revolutionize the space. Hayes argues that the true differentiator is Hyperliquid's exchange token, HYPE, which allows users to directly benefit from platform activity. This sets it apart from competitors like Polymarket and Kalshi, which do not currently offer this functionality.
Hayes predicts that HIP-4 will quickly become a dominant force in the prediction market due to Hyperliquid's large user base, lower trading fees, and robust tech infrastructure. The fact that users can profit from their usage of HIP-4 by owning the HYPE token is a major advantage. In contrast, Polymarket is expected to launch its own token, and premarket perpetual contracts tied to this token are already trading.
However, the implied valuation of these contracts should be treated with caution. The geographic landscape also plays a role, with Polymarket facing regulatory challenges in Asia and Hyperliquid having a strong user base in the region. The contrast between Hyperliquid and Kalshi is particularly notable, as Kalshi's model is built around compliance and licensing, rather than token incentives.
This means that Kalshi users have no path to the upside of the platform itself, unlike Hyperliquid users who can benefit from the HYPE token.