HYPE rose approximately 20% after the Hyperliquid team confirmed its support for HIP-4, a proposal to add prediction market outcome contracts and options-style derivatives to the platform. Traders boosted the token’s value amid the prospect of new, lower-risk products and greater compatibility with existing Hyperliquid and HyperEVM margin features.
Hyperliquid’s token, HYPE, surged 20% after the company announced the implementation of the HUP-4 protocol. This protocol proposes fully collateralized, non-leveraged outcome contracts settled in USDH, designed to function as prediction market instruments.
One of the key factors driving this step is the strong performance achieved on the testnet. The format eliminates settlements by design and aims to broaden product accessibility beyond perpetuals, which historically generated the majority of the platform’s fee pool.
The plan also allows for combinations of outcome and perpetual contracts for hedging strategies and multi-product exposures. The creation of permissionless markets was described as a possibility, subject to community feedback, which would allow users to propose and launch on-chain event markets.
Network changes with HIP-4 and the rise of HYPE
Reports linked the rise of HYPE to the perceived reduction in the product’s risk profile and the expansion of its accessible user base. Unleveraged outcomes are presented as more accessible to hedgers and smaller counterparties.
From a trading perspective, the move increases opportunities for event-driven trades but also concentrates risk in execution and liquidity at launch. If the mainnet rollout is delayed or specific features change, the HYPE premium could appreciate rapidly. Conversely, a smooth mainnet rollout with active market making would likely attract more retail and institutional order flow.
Derivatives desks should note that outcome contracts are intended to be fully collateralized and unleveraged, which alters the hedging mechanics compared to perpetuals. This structure reduces liquidation-driven volatility but may shift hedging demand toward options-like strategies when using composability.
The key short-term determinant is the timeline and details of the mainnet rollout; this will determine whether the recent surge represents a temporary compression of positions or a structural revaluation linked to new commission flows and user onboarding. Participants should monitor official Hyperliquid announcements and testnet progress for confirmation before adjusting longer-term allocations.
