Kalshi executives promote Hyperliquid HIP-4! The brand new "Event Perpetuals" aims to solve the pain points of the prediction market.

On September 16, four authors jointly submitted Hyperliquid Improvement Proposal 4 (HIP-4), which plans to introduce a new "Event Perpetuals" mechanism, allowing the prediction market to run natively on Hyperliquid's order book infrastructure. Notably, one of the proposal authors is John Wang, the crypto assets director at Kalshi, which has generated significant attention in the field of crypto derivatives and prediction markets.

Limitations of Existing Infrastructure

HIP-4 points out that the current HIP-3 builder deployed perpetual contracts have obvious shortcomings in the application of prediction markets:

· Continuous updates of the prediction market are needed.

· Price fluctuations are limited to 1% per moment.

· The binary event analysis efficiency is low, and the settlement is asymmetric.

Taking the NFL betting scenario as an example, in the current system, it takes about 50 minutes for the market to drop from a neutral probability (0.5) to zero probability, creating arbitrage opportunities for informed traders; while the settlement rising to 1.0 is almost instantaneous, creating asymmetric risk.

Event Perpetuals: Core Design

The new mechanism aims to eliminate the continuous prediction market data and fund payments, with prices determined entirely by trading activities, and adopts a binary yield settlement:

Price range: 0.001 to 0.999, reflecting the market's implied probability.

Settlement method: immediately settle to 0 or 1 after the event ends.

Margin: Only 1x isolated margin is used, and the buyer must deposit collateral for the maximum potential loss.

Fair Price Discovery: Single Price Clearing Auction

Initiation phase: A single price clearing auction lasting approximately 15 minutes.

Price Determination: The system evaluates all candidate prices, maximizes matching volume, and prioritizes the smallest imbalance that is closest to 50%.

Opening Execution: All orders are executed at the confirmed opening price uniformly, followed by continuous trading.

Builders need to stake 1 million HYPE coins to deploy the market and can charge an additional fee of 50% above the base rate.

Market Recycling and Flexible Deployment

HIP-4 also designed a market recovery mechanism that allows new activities to replace markets that have ended within the same period, improving resource utilization.

In terms of dispute resolution, the oracle will release the final value within the designated challenge window to ensure the fairness of the outcome.

Conclusion

The launch of HIP-4 means that Hyperliquid is trying to deeply integrate prediction market into its derivation infrastructure and address the long-standing issues of settlement delays and price constraints. If "Event Perpetuals" successfully lands, it will provide a more efficient and fair trading environment for diverse scenarios such as sports betting, political predictions, and financial events, and may also become a key step for the large-scale application of prediction markets on-chain.