Hyperliquid is expanding the scope of decentralized derivatives with the announcement of HIP-4, a major protocol upgrade that introduces outcome trading on HyperCore, unlocking prediction markets and options-like financial instruments for the first time on the platform.
The new primitive, known as Outcomes, allows traders and builders to create fully collateralized contracts that settle within a defined range rather than tracking perpetual price movements.
Unlike traditional perps that rely on leverage and liquidation mechanisms, Outcomes introduce a fundamentally different trading model focused on bounded risk, fixed settlement, and non-linear payoffs.
Hyperliquid confirmed the development in a public update, highlighting strong user demand for prediction markets and alternative derivatives that go beyond leverage-based speculation.
With HIP-4, Hyperliquid is positioning HyperCore as a more expressive financial engine, capable of supporting entirely new categories of onchain markets.
Outcomes Introduce A New Derivatives Primitive On HyperCore
At the heart of HIP-4 is the Outcomes contract, a general-purpose financial primitive designed to settle within predefined bounds rather than floating endlessly like perpetual futures.
These contracts are:
• Fully collateralized
• Dated with fixed settlement points
• Structured with non-linear payoff curves
• Free from leverage and forced liquidations
This design allows traders to express directional views, probability estimates, and bounded risk strategies in ways that were previously difficult or impossible with perps alone.
For example, an outcome contract could settle based on whether Bitcoin trades within a specific range by a certain date, whether a governance proposal passes, or whether a macro event occurs, forming the foundation of robust prediction markets.
At the same time, these same mechanics can replicate bounded options-like instruments, enabling traders to speculate on price ranges, volatility windows, and event-driven outcomes without margin calls or cascading liquidations.
By introducing Outcomes, HyperCore moves beyond linear price exposure and into a more flexible financial modeling layer.
No Leverage, No Liquidations, And Fully Collateralized Risk
One of the most significant shifts brought by HIP-4 is the removal of leverage-based risk mechanics.
Traditional perpetual markets rely on borrowed exposure and liquidation engines, which can trigger:
• Forced position closures
• Liquidation cascades
• Volatility amplification
• Sudden systemic drawdowns
Outcomes eliminate these dynamics entirely.
Every position is fully collateralized from the start, meaning losses are capped by the amount committed, and positions naturally settle at expiration without liquidation pressure.
This structure creates a calmer and more predictable trading environment, especially attractive for users who want exposure without the stress of liquidation risk.
It also opens the door to broader participation, including traders who avoid perps due to their complexity and aggressive risk profile.
In effect, HIP-4 introduces a derivatives layer that feels closer to traditional options and event markets, while retaining the speed and composability of onchain infrastructure.
Deep Integration With Portfolio Margin And HyperEVM
Rather than existing as a standalone product, Outcomes are designed to compose directly with Hyperliquid’s broader ecosystem.
The new contracts integrate seamlessly with:
• Portfolio margin, allowing cross-position capital efficiency
• HyperEVM, enabling smart contract interaction and custom financial logic
• Existing HyperCore trading infrastructure
This composability means builders can create advanced strategies that combine outcome contracts with perpetuals, lending logic, automated trading systems, and onchain applications.
For example, a protocol could design structured products that hedge perp exposure using outcome markets, or prediction platforms that automatically settle and rebalance portfolios based on real-world events.
By embedding Outcomes into HyperCore’s core architecture, Hyperliquid ensures that these new markets benefit from the same speed, liquidity, and risk management tools that power its existing derivatives engine.
Canonical Markets Will Launch After Testnet Phase
At present, Outcomes are still under active development and are being tested exclusively on Hyperliquid’s testnet environment.
The team plans to roll out canonical markets once technical refinement is complete and user feedback has been incorporated.
These official markets will:
• Rely on objective settlement sources
• Be denominated in USDH
• Serve as standardized prediction and options-like instruments
Following this initial rollout, Hyperliquid expects to extend the infrastructure toward permissionless deployment, allowing builders and users to create their own outcome markets without centralized approval.
This approach mirrors the evolution of decentralized exchanges, starting with curated markets before opening fully to community-driven innovation.
If successful, HIP-4 could spark an entirely new category of onchain financial products layered on top of HyperCore.
A Major Step Toward More Expressive Onchain Finance
Hyperliquid’s HIP-4 signals a broader shift in how decentralized trading platforms are evolving.
Rather than focusing solely on faster perps and deeper liquidity, protocols are now expanding toward richer financial primitives that better reflect real-world markets and user needs.
- Prediction markets allow crowdsourced probability forecasting.
- Options-like instruments enable controlled risk strategies.
- Fully collateralized models reduce systemic volatility.
Together, these tools move DeFi closer to a mature financial ecosystem, one that supports not just speculation, but hedging, forecasting, structured products, and complex risk management.
By embedding Outcomes directly into HyperCore and composing them with HyperEVM, Hyperliquid is building an infrastructure where developers can design entirely new forms of decentralized finance without reinventing trading rails.
As testing progresses and canonical markets go live, HIP-4 could become one of the most important upgrades in Hyperliquid’s roadmap, transforming the platform from a high-performance derivatives exchange into a multi-primitive financial network.
In the long run, Outcomes may prove to be the missing layer that connects prediction markets, options-style trading, and onchain composability into a unified decentralized trading experience.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news!
Source: https://nulltx.com/hyperliquid-unveils-hip-4-to-bring-prediction-markets-and-options-onchain/
