Why HYPE Is Surging After Hyperliquid Unveils HIP-4 Prediction Markets

HYPE jumped over 10% after Hyperliquid announced HIP-4, a testnet upgrade enabling prediction markets and outcome trading.

Hyperliquid announced a new protocol upgrade as market conditions remained weak across crypto assets.

The update focuses on prediction markets and outcome-based trading. Following the announcement, the HYPE token recorded a sharp price increase.

Hyperliquid Introduces HIP-4 for Outcome Trading

Hyperliquid confirmed that HyperCore will support a new protocol known as HIP-4. The protocol is designed to enable outcome trading on the decentralized exchange.

These outcomes are structured as fully collateralized contracts with fixed settlement ranges.

According to Hyperliquid, HIP-4 will support use cases such as prediction markets and bounded options-like products.

The exchange stated that these contracts settle without leverage and without liquidations. This structure differs from traditional perpetual futures offered on the platform.

The exchange explained that outcome trading introduces dated contracts and non-linear payoff structures.

Hyperliquid stated, “The outcome primitive expands the expressivity of HyperCore.” The protocol is still under development and remains live only on the testnet.

HIP-4 Builds on Earlier Protocol Upgrades

The HIP-4 rollout follows the earlier launch of the HIP-3 protocol on Hyperliquid. HIP-3 allows users to create custom perpetual markets by staking HYPE tokens.

Demand for these markets increased activity on the exchange.

Data shared previously showed that HIP-3 open interest reached new record levels. Trading demand included commodities and stock-based products.

This growth helped expand the platform’s derivatives offerings.

With HIP-4, Hyperliquid aims to support outcome-based instruments alongside existing products. The exchange stated that outcomes can interact with other tools.

These include portfolio margin and the HyperEVM environment.

Canonical Markets and Deployment Plans

Hyperliquid stated that HIP-4 outcomes are still a work in progress. The team plans to deploy Canonical markets after technical development is completed.

These markets will rely on objective settlement sources.

The exchange plans to denominate Canonical markets using USDH, its native stablecoin.

This approach is intended to standardize settlement across outcome contracts. The team also noted plans for broader deployment.

Hyperliquid added that future expansion may allow permissionless deployment. This step will depend on user feedback and performance during testing.

No launch date for mainnet deployment has been provided.

Related Reading: Hyperliquid User Base Jumps to 1.4 Million in 2025 Milestone

HYPE Price Rises After Announcement

The HYPE token rose sharply following the HIP-4 announcement. The price climbed from near $30 to above $32 within 24 hours.

This move represented a gain of more than 10%. Market data showed that HYPE remained up over 40% on the weekly timeframe.

The increase occurred despite broader weakness across the crypto market. Trading volume also increased during the price move.

Commentary on social platforms linked the price action to the protocol update. Hyperliquid did not comment on token price movements.

The exchange focused its communication on product development and testing progress.

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