Hyperliquid's New Narrative Begins as HIP-4 Officially Launches

TradeXYZ announced today the launch of its self-deployed prediction market Events, using txyz as the deployment name. The first contracts cover Up/Down on stocks, commodities, and Pre-IPO, with sports, politics, and economic events to be added later.

Traders can hold spot, borrow USDC, trade Pre-IPO perpetual contracts, and use event markets to hedge earnings reports or bet on sports outcomes, all within a single account.

Hyperliquid's prediction market has not made much of a splash since deployment began, but TradeXYZ's entry has given the community hope, as this team once almost single-handedly brought Hyperliquid into the traditional finance spotlight.

The launch of Events also officially kicks off competition among HIP-4 deployers.

Different Market Operators

HIP-4 is Hyperliquid's improvement proposal designed for prediction markets. An obvious question arises: Hyperliquid has already deployed its own HIP-4 market, so why can TradeXYZ deploy another one?

The answer lies in the division of labor between the protocol layer and the market operation layer.

The market deployed by Hyperliquid itself is called the official market, while third-party markets like txyz share the same underlying infrastructure, HyperCore. Order matching, balances, positions, and final on-chain settlement are all handled by HyperCore.

The difference is who operates the specific market.

HIP-4 has a fixed data template that specifies what text a prediction market can display, how event outcomes are named (e.g., Yes/No, Up/Down), and which keywords can be filled in. Within these boundaries, third-party deployers can choose templates, set parameters and fees, publish outcome determination methods, and decide which events to list, when to stop trading, and which data source to reference.

After an event outcome is determined, the data source does not automatically settle the contract. The deployer or an authorized settlement sub-deployer (a role specifically responsible for settlement) must submit the settlement result to HyperCore, which verifies permissions and then writes the result on-chain.

Therefore, "third-party deployment" means that the terms, determination, and settlement submission of a specific market are the responsibility of the third party, similar to the relationship between Hyperliquid's main site and various HIP-3 exchanges.

Hyperliquid manages the underlying trading rules, while deployers operate the markets.

Mechanism

A binary event has two outcomes: Yes and No. The collateral can be split into two complementary "outcome tokens."

Suppose the price of Yes is 0.63, then the price of No corresponds to 0.37. Buying Yes at 0.63 is economically equivalent to selling No at 0.37. HyperCore merges liquidity from both sides into a single order book.

Settlement after expiry is also straightforward. When settleFraction = 1, each Yes token redeems one unit of the quote asset, and No is zero; when settleFraction = 0, the opposite occurs. Some templates also allow settlement values between 0 and 1, enabling multiple candidate outcomes (such as who will win the US Open) to form a single question, with each outcome having its own order book.

HIP-4 splits "settlement determination" into two steps. The market first calculates the outcome from the declared data source using a public method; the deployer then converts the outcome into an on-chain settlement value and submits it to HyperCore.

TradeXYZ's daily Up/Down market provides a concrete example. According to the documentation, the system reads the five closed one-minute candlesticks before settlement, calculates the average of the high, low, and close prices for each candlestick, and then takes the arithmetic mean of the five results. Yes wins only if this price is strictly higher than the strike price; if they are equal or the average price is lower, No wins.

This five-minute window reduces the ability of the last trade or transient volatility to affect settlement. Sports markets initially use ESPN as the data source. How postponements, cancellations, draws, or result corrections are handled depends on the specific template and terms.

HIP-4 deployers like TradeXYZ can place Events in the same account as spot, lending, and HIP-3 contracts, allowing traders to express both continuous price judgments and discrete outcomes at a specific point in time. This is the fundamental difference between HIP-4 and traditional prediction markets like Polymarket and Kalshi. Although these two traditional prediction markets have also started operating PerpDEX businesses, they still have a long way to go compared to Hyperliquid in terms of liquidity, user mindset, and trading experience.

Competitive Landscape

TradeXYZ's advantage is its existing HIP-3 market. Events can obtain continuous prices from these perpetual contracts and connect event trading to existing user accounts. It chose to start with Up/Down on stocks, commodities, and Pre-IPO, then expand to sports, politics, and economic events, following a path from financial trading to real-world outcomes.

According to Loris.tools statistics, Events captured a 15% trading volume share on its first day of launch. The other two third-party deployers, Outcome and Skew, accounted for 75% and 3.5% respectively.

Outcome is the earliest HIP-4 deployer, launching on Aug. 29 and holding a first-mover advantage. Since launch, Outcome has rolled out a total of $1 million in trading incentives, and its cumulative trading volume now exceeds $20 million.

Skew.trade received 500,000 HYPE from Hyperion DeFi. The project was formerly Sharp terminal, a Polymarket trading terminal, and later pivoted to HIP-4. The project is still in the waitlist stage, and all listed markets are up/down type.

As market types and liquidity gradually enrich, Hyperliquid is poised to carve out a place in the prediction market. For Polymarket and Kalshi, when traders can place bets and hedge within the same Hyperliquid account, retaining them will require more compelling reasons.