Big Shift For Crypto Prediction Markets: Hyperliquid Removes External Oracle Dependency

Hyperliquid’s new HIP-4 update—unveiled Monday—marks a major shift in how crypto prediction markets could operate, and it arrives as the platform looks to intensify competition in a fast-growing sector where Polymarket and Kalshi currently lead.

Prediction Markets Get A New Playbook

The change was announced via Telegram, where Hyperliquid said it now supports “canonical outcome markets” tied to off-chain events. In other words, the outcome markets can be published and managed using automated newsfeed software that runs through the validator operations Hyperliquid already uses for its blockchain. 

Rather than relying on a separate external oracle system to determine results, the validator set becomes responsible for deployment and settlement of these markets through on-chain governance.

According to the explanation shared, validators cast votes on whether canonical markets should be deployed and how they should be settled. Those votes consider multiple factors, including whether the market rules are unambiguous, and—importantly—how the market itself scores on subjective quality.

Hyperliquid dev Yaigourth described the upgrade in blunt terms: as he put it on X (formerly Twitter), Hyperliquid has “just removed the need for external oracles on prediction markets,” adding that the validator set is now the oracle. 

Yaigourth also contrasted HIP-4’s approach with how some other market platforms handle real-world event resolution. He pointed out that Polymarket uses its decentralized “optimistic oracle” Universal Market Access (UMA), while Kalshi is centralized. 

Hyperliquid HIP-4 Outlook

The HIP-4 changes build on earlier announcements from Hyperliquid about upcoming market functionality. Earlier this year, the platform said it planned to launch HIP-4 markets that introduce prediction-market-like outcome trading. 

Outcome markets then moved onto mainnet as a limited-feature initial release on May 2, 2026. At the time of writing, Hyperliquid indicated there are only two markets live on mainnet, both launched by the Hyperliquid team.

Hyperliquid also noted that fully permissionless HIP-4 market deployments are not yet live. Once that capability is enabled, the platform expects a period of rapid experimentation and new market launches from developers such as Outcome and Trade[XYZ].

A key practical benefit—according to brokerage and trading firm FalconX, in a recent social post—centers on access and trading workflow. With the update, traders can potentially view and trade event contracts 24/7 within the Hyperliquid environment alongside their existing spot and perp positions. 

FalconX also suggested this setup could make cross-margining possible, which would improve capital efficiency by letting traders allocate the same capital across different position types rather than keeping liquidity isolated.

At the time of writing, the platform’s native token, HYPE, was trading at around $61.93 — a gap of almost 4% from the all-time high of $64 reached over the weekend. 

Featured image created with OpenArt; chart from TradingView.com