Hyperliquid HIP-4 Outcome Trading Goes Live on Testnet

Hyperliquid announced on February 2 that its HyperCore trading engine will add outcome-based contracts under a proposal known as HIP-4, introducing a new way to trade derivatives without leverage or liquidations. 

The feature is currently live on testnet and is aimed at supporting use cases such as prediction markets and range-bound trading strategies.

The update introduces fully collateralized outcome contracts that settle within set ranges, replacing leveraged derivatives and forced liquidations. Designed for controlled risk, they cap gains and losses, avoiding liquidation cascades, and will integrate with HyperCore features like portfolio margining and HyperEVM.

Hyperliquid described the purpose of outcome trading as a flexible financial primitive, enabling new market structures within risk limits. Canonical markets will be launched after development is complete, using objective settlement sources and USDH as the settlement currency.

The team is also considering permissionless deployment, which would enable users to create their own outcome markets based on early testing feedback.

Also Read: Hyperliquid’s HYPE Rockets 30% Toward $35 Amid $1B Silver Surge

Why Developers See This as a Structural Upgrade

DeFi researcher Ignas identified the most attractive part of HIP-4 as composability. According to Ignas, if outcome contracts could offset perpetual contracts, traders would be able to hedge their directional risk while minimizing margins.

For instance, a trader could have a long ETH perpetual position and an outcome contract that pays off if ETH is trading below a certain price.

Such a system is not present on current prediction market solutions like Polymarket or Kalshi, which run isolated markets and are very listing-curation dependent.

Ignas also highlighted Oracle’s credibility as a key concern in the prediction market space, implying that Hyperliquid’s emphasis on objective settlement sources might help to mitigate a long-standing problem in this area.

Nevertheless, he added that permissionless markets might need some protection mechanisms, potentially tied to staking, to avoid malicious event definition.

Hyperliquid HYPE Price Holds Firm As Market Reacts

The market reaction to the update has been quite encouraging. As of today, HYPE is trading at $32.93, an 11.84% increase in value. The trading volume for the last 24 hours touched $888.66 million, a 34.46% increase, as per CoinMarketCap data.

On a seven-day chart, the token has registered a 36.37% increase in value, outperforming most of the major altcoins in the market despite the fall in Bitcoin. According to trader Altcoin Sherpa, HYPE is one of the strongest performers in the current market conditions.

Source: X

Although he expects further consolidation, he also stated that Hyperliquid has managed to maintain its range better than most other alternatives, and it is not a good time for short-term trading because of the instability in Bitcoin.

Also Read: Hyperliquid’s HYPE Rockets 30% Toward $35 Amid $1B Silver Surge