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, rather than just offering cheaper trading options. 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 the HYPE token, which allows users to benefit from platform activity. This sets Hyperliquid apart from competitors like Polymarket and Kalshi, which do not currently offer similar token-based incentives. With a large user base, low trading fees, and robust tech infrastructure, Hayes believes that HIP-4 will quickly become a dominant prediction market. The ability for users to own and profit from the HYPE token is a key factor in this prediction.
In comparison, Polymarket is expected to launch its own token, often referred to as $POLY, with premarket perpetual contracts trading around $14, implying a fully-diluted valuation of roughly $14 billion. HYPE, on the other hand, has an FDV of about $38 billion, according to CoinGecko data.
The geographical landscape also plays a role, with Polymarket facing regulatory challenges in Asia, while Hyperliquid's user base is skewed towards the region. The contrast is particularly notable with Kalshi, a CFTC-regulated exchange that is built around compliance and licensing, rather than token incentives. This makes it an interesting test of Hayes' thesis, as users can trade event outcomes on Kalshi, but have no path to the upside of the platform itself.