According to Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom fund, Hyperliquid's foray into prediction markets is not just about reducing trading costs, but also about who gets to capture the upside. Hyperliquid's zero-fee-to-open model for event trading under HIP-4 is expected to be a game-changer.
Hayes believes that the real differentiator is Hyperliquid's exchange token, HYPE, which allows users to profit from platform activity. This sets Hyperliquid apart from Polymarket and Kalshi, which do not currently offer this feature. With a large user base, lower trading fees, and robust tech infrastructure, Hyperliquid's HIP-4 is poised to become a dominant prediction market.
The fact that users can own the HYPE token and directly profit from their usage of HIP-4 gives Hyperliquid a significant advantage. In contrast, Polymarket is expected to launch its own token, and premarket perpetual contracts are already trading, implying a valuation of around $14 billion. However, HYPE has a fully diluted valuation of around $38 billion, according to CoinGecko data. The geographical landscape also plays a role, with Polymarket facing regulatory hurdles in Asia and Hyperliquid having a strong user base in the region.
The contrast with Kalshi, a CFTC-regulated exchange, is also notable, as Kalshi's model 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.