Decentralized exchange Hyperliquid has announced plans to introduce a new “outcome trading” feature designed to support prediction markets and other derivatives. The move taps into surging interest in prediction markets, which saw $12.4 billion in trading volume last month. It also comes as regulatory scrutiny intensifies globally against platforms like Polymarket, with debates over whether such markets constitute gambling or financial instruments.
The Hyperliquid protocol plans to roll out support for “outcome trading,” according to an announcement. This feature will be introduced through Hyperliquid Improvement Proposal 4 (HIP-4), allowing its core infrastructure to support fully collateralized contracts that settle within a fixed range.
“They are a general-purpose primitive that are useful for applications such as prediction markets and bounded options-like instruments,” the announcement stated. It cited extensive user demand and noted builders would likely create novel applications for the technology.
Prediction markets have seen a surge in activity, with $12.4 billion in trading volume recorded last month according to data from Dune. “Hyperliquid is about to grow the Prediction Markets TAM, which is great for the industry as a whole,” said Farokh Sarmad, co-founder of prediction market Myriad.
The HIP-4 proposal itself was first published last September. It promotes non-linear, dated contracts and an alternative form of derivatives trading that avoids leverage and liquidations. The “Outcomes” feature is currently being tested on Hyperliquid’s testnet.
The platform’s move comes as prediction markets face mounting regulatory pressure worldwide. Scrutiny has intensified recently, particularly around sports and political markets. Polymarket has faced bans and enforcement actions in jurisdictions including Hungary, Portugal, Nevada, and Tennessee.
Central to the regulatory dispute is whether prediction markets should be treated as gambling sites or as financial venues offering “event contracts.” Despite this, major firms continue entering the space, with Coinbase recently rolling out its own prediction market product. Coinbase CEO Brian Armstrong tweeted, “Prediction markets are the ultimate form of truth-seeking.”
