Hyperliquid Outcome Prediction Market Best and Worse Case Scenario?
Should polymarket be worried for Hyperliquid?
Polymarket launches a perp market
Hyperliquid launches a prediction market
What is going on?
Hyperliquid outcome market went live 48 hours ago and already closed its first BTC price market open with over $6million trading volume, surpassing comparable Polymarket BTC markets in speed/volume.
What are the best- and worst-case scenarios, and why should you care?
The reaction on CT is a bit divided, where the Hyperliquid community is convinced that Outcome will kill Polymarket. There’s a rebuttal against this, though
As of now, HIP-4 has been able to gather 0.1% of prediction market share compared to polymarkets 38%.
Hyperliquid has been testing HIP-4, their prediction market product with a zero-fee-to-open structure that would let traders bet on events with their crypto futures from a single margin account.
Also, there are claims that it’s a subtle attempt for Hyperliquid to drive USDH adoption. Why?
All HIP-4 outcome contracts are denominated and settled in USDH (Hyperliquid’s native stablecoin)
You need USDH (or spot BTC/HYPE with portfolio margin) to trade these binary Yes/No event contracts.
This creates forced demand for USDH. As prediction market volume grows, traders must hold/convert to USDH to participate in the new primitive.
Best Case Scenario
I came across a post indicating that both Hyperliquid and Polymarket already have overlapping users.
Polymarket side: Out of ~3 million PM users, 100,693 wallets (3.3%) are also active on Hyperliquid.
These 100k wallets drive ~12% of all Polymarket volume ($6.1 billion in trades at the time).
Hyperliquid side: 1 in 8 HL users has a Polymarket account.
It appears Hyperliquid is trying to retain its funds, so there is no need for its client to take the funds out.
What hedge does Hyperliquid have over Polymarket?
These are factors that make the HyperLiquid market considerable
Number 1 is a 0 market-making fee compared to polymarkets 2% taker fee.
Their selling point is that they’re optimized for pro traders and hedgers who live in perps primarily and want seamless prediction market exposure without leaving their platform.
Hyperliquid community already on opium on whether new point program is coming
Lots of reaction to its UI being complicated as respect to polymarket’s but the HL team promises more updates in the coming weeks.
We should also be expecting more integration of HIP-4 API to simpler UI’s if the case may be.
Trust wallet product intern already teasing this.
Worst Cast Scenario
Like I said there’s already a mixed reaction in the market about the launch
Here are some of the worst-case scenarios
UI/UX & retail appeal: Still very “perp-trader” oriented. Since early feedback calls it “weak” and “not even close” to Polymarket’s. Most casual bettors on elections/sports/culture will likely prefer Polymarket for now.
Market breadth & curation: Also, it launched with crypto-focused binaries (e.g., daily BTC price). Broader events (politics, sports, macro) are rolling out, but Polymarket has this under its bag.
Retail volume & brand moat: Polymarket owns the “prediction market” mindshare, especially in relation to crypto.
Regulatory/access limits: No U.S. users. Polymarket has CFTC + U.S. relaunch efforts.
Liquidity depth outside crypto events: Early OI and depth are strong on BTC binaries thanks to existing perp liquidity, but unproven on non-crypto macro or long-tail events. So yeah, fingers crossed
Proposed incentive: While Hyperliquid’s token $HYPE is already in circulation, there’s a high chance traders will lean towards Polymarket with hopes of their TGE.
Also, I saw a post where someone said the hyperliquid’s oracle might be inaccurate
My Thoughts
So yeah, how will you play this? There’s so much hopium for S3 points season ( not official) .
But this can either go like this; where the program will cause a lot of farmers to troop into Hyperliquid thereby diluting incentives for real traders.
The gap is still very wide, and I will be back in a few weeks for updates.