Prediction markets and permissionless perps on Hyperliquid: Exploring HIP-3 and HIP-4

Hyperliquid, a high-performance decentralized exchange specializing in perpetual futures, is pivoting toward a generalized derivatives platform through the adoption of Hyperliquid Improvement Proposals (HIP) 3 and 4. These proposals collectively aim to decentralize market creation and expand the platform’s utility beyond traditional crypto assets.

HIP-3: Permissionless Perpetual Futures
HIP-3 focuses on eliminating the governance bottleneck inherent in launching new perpetual contracts. Historically, listing a new perp market on DEXes required complex community votes or centralized committee approval, limiting agility and stifling the growth of long-tail assets. HIP-3 allows any user to initiate a new perpetual contract listing by simply posting the required parameters (e.g., oracle sources, liquidation bounds, initial funding rate structure) and providing the necessary collateral deposit. This mechanism fundamentally shifts market listing responsibility to the creator, fostering true permissionlessness. The result is an explosive potential for market diversity, allowing the community to rapidly create perps for novel tokens, emerging indices, or specific baskets of assets without requiring official protocol endorsement, dramatically enhancing Hyperliquid’s responsiveness to market demands.

HIP-4: Integrated Prediction Markets
Building on the foundation of permissionless listing established by HIP-3, HIP-4 formally integrates prediction markets into Hyperliquid’s infrastructure. Prediction markets—where participants bet on the outcome of future events (e.g., political elections, economic indicators, sports results)—are naturally structured as binary derivative contracts. By leveraging Hyperliquid’s high throughput and low-latency execution environment, prediction markets can operate with the same efficiency as standard perpetuals. This allows complex outcomes to be tokenized and traded seamlessly, benefiting from deep liquidity and fast price discovery. The integration utilizes the platform’s existing order book and liquidation engine, treating the outcome of the prediction event as the final settlement price of the perp contract. This positions Hyperliquid not just as a financial trading venue, but as a critical infrastructure layer for speculative forecasting.

Combined Impact
The synergistic adoption of HIP-3 and HIP-4 represents a major step toward Hyperliquid becoming a generalized derivatives machine. HIP-3 provides the ‘how’—the infrastructure for permissionless creation—while HIP-4 provides the ‘what’—a powerful new category of asset class, prediction markets, that leverages the high-speed infrastructure. Together, these proposals significantly expand Hyperliquid’s total addressable market, driving decentralization and ensuring the platform can host an almost limitless array of derivative instruments.

Source: Prediction markets and permissionless perps on Hyperliquid: Exploring HIP-3 and HIP-4