According to Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom, the competition for dominance in prediction markets is not just about offering cheaper trading, but also about who can capture the upside. Hyperliquid's push into this space, with its zero-fee-to-open model for event trading under HIP-4, is a significant move. Hayes argues that the real differentiator is the HYPE token, which allows users to profit from platform activity, a feature that sets it apart from competitors like Polymarket and Kalshi. With a large user base, lower trading fees, and robust tech infrastructure, Hyperliquid is well-positioned to become a major player in the prediction market.
The fact that users can directly profit from their usage of HIP-4 by owning the HYPE token gives it a significant advantage. In contrast, Polymarket is expected to launch its own token, and Kalshi's model, which is built around compliance and licensing, does not offer a similar value-accrual layer.
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. This gives Hyperliquid a significant edge, as it faces no equivalent constraints in this region. The contrast with Kalshi, a CFTC-regulated exchange, is particularly notable, as its model is built around compliance and licensing, rather than token incentives.
This makes it the most direct test of Hayes' thesis, as users can trade event outcomes on Kalshi, but have no path to the upside of the platform itself.