Hyperliquid HIP-4 proposal is advanced, and HYPE pledge rate approaches 44%

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Hyperliquid HIP-4 outlines the next steps for the agreement to extend beyond perpetual contracts through a license-free results market framework testing. The proposal introduces a common primitive designed to support forecast markets and bounded options-like tools, allowing third-party builders to ultimately use valifier-approved templates to launch results markets, rather than relying mainly on valifier-led deployments.

The planned upgrade is expected to be launched on the test network before being more widely promoted on the main network. Hyperliquid emphasized that the proposal is still in its preliminary stages and may be adjusted based on validator testing and community feedback. In parallel with the proposal, indicators of pledge participation rates, derivatives activity and agreement fundamentals show continued activity on the Internet, but the long-term success of the framework will ultimately depend on actual adoption after a phased launch.

How does Hyperliquid HIP-4 change the market model of the protocol?

Hyperliquid HIP-4 introduces a proposed framework to enable permission-free resulting market deployment through future network upgrades that are expected to be launched on the test network before being implemented on the main network. The proposal shifts market creation from a validator led deployment model to a framework where eligible deployers can use standardized templates approved by validators to launch markets. These templates will define market descriptions, settlement standards and execution logic, and will be stored and enforced on-chain. As a result, the market was designed to be fully collateralized contracts that settled within a fixed range. Unlike perpetual contracts, they introduce nonlinear returns, contracts with expiration dates, and an alternative form of derivative trading that requires no leverage or clearing.

This framework is designed to serve as a common primitive that supports both market forecasting and bounded options-type tools. Initial deployment is expected to start with recurring binary results related to BTC tagged price settlement through daily recurring BTC price threshold events. Hyperliquid also stated that the multi-outcome market will not be included in the initial mainnet release.

The deployer will be responsible for defining each market based on the template selected and correctly settling the results. Multiple deployers can also create the same template-based market. The normative market created by validators is expected to continue to exist, but the number will be limited. Hyperliquid said the network should create fewer than 10 regulated results markets each year, and most future expansions will be carried out by third-party deployers within approved governance frameworks.

Why is pledge the core of the deployment framework?

The proposal combines the creation of unlicensed markets with strict financial liability. Each deployer must pledge 500,000 HYPE before launching the market. Pledged tokens will be locked up for six months. If the market is incorrectly defined, settled incorrectly, or is not settled correctly within more than a week, they may be forfeited through the validator's vote.

Builders must settle all open markets before withdrawing pledges, thereby assuming financial responsibility throughout the market life cycle. Each deployer will initially receive the ability to 100 results, which is equivalent to 200 result tokens. Once the results are settled, the allocation will be available again. Hyperliquid also plans to introduce an auction mechanism in future upgrades, allowing deployers to expand their allocations.

With the introduction of configurable fee sharing, deployers are expected to be eligible for transaction fees of up to 50% generated in their market. Only AQAv2-compatible quoted assets are eligible for Hyperliquid HIP-4 deployments. Hyperliquid also pointed out that the resulting market currently operates with zero transaction fees during the initial testing phase.

Why does the protocol test the results market?

This proposal expands Hyperliquid's scope from a derivatives trading platform to infrastructure that can support a wider range of on-chain financial applications. While spot and perpetual markets revolve around existing crypto assets, the result market allows trading around clearly defined future events. These events may include macroeconomic data releases, policy decisions, ETF approvals, company milestones, sporting events, or other verifiable results.

With the number of potential events far larger than traditional transaction pairs, Hyperliquid is testing an infrastructure model that enables developers, research organizations, enterprises and communities to build markets within standardized governance rules, rather than relying solely on protocol-managed deployments.

"The next phase of digital finance will not be won by the platform that builds the most products," said Varun Datta, founder and CEO of Truth Ventures. He added that platforms that empower others to build may bring greater long-term investment value.

What do pledge and agreement indicators show?

Internet engagement remains strong while advancing governance proposals. A trader with a lifetime profit of approximately US$2.37 million on perpetual transactions recently pledged 249,243 HYPE (valued at approximately US$15.5 million at the time of the transaction) rather than cashing in proceeds. Dune Analytics data shows that the total pledge volume of HYPE has reached approximately 438.7 million pieces, accounting for 43.9% of the total supply of tokens.

The overall pledge rate is still close to 44%, while mobile pledge participation has declined, indicating that many participants continue to prefer native verifiers. The current annualized rate of return on pledge is approximately 2.1%. Open interest has also exceeded US$11 billion. Balanced funding rates and limited clearing suggest that traders continue to increase exposure without relying on excessive leverage.

DefiLlama data shows that Hyperliquid's total lock-in value is approximately US$6.11 billion, including approximately US$5.713 billion on Hyperliquid Layer 1 and nearly US$396.78 million on Arbitrum. Annualized revenue and earnings were both approximately US$798.59 million.

CoinMarketCap data shows that HYPE is currently trading at approximately US$58.52, with a market value of approximately US$14.79 billion, and a 24-hour trading volume of approximately US$379.92 million. These updated data are based on previous valuations from large pledge transactions, indicating that despite changes in market prices, online participation remains high.

What challenges remain before wider adoption?

The proposal is still in the testing stage and should not be considered final implementation. Hyperliquid said these specifications are preliminary and may change based on validator testing and community feedback. Unlicensed deployments are currently planned to be launched on the test network before being more widely promoted on the main network, with validator approved templates continuing to guide the initial phase rather than allowing unlimited market creation from the beginning. As a result, markets also require deployers to maintain clear market definitions and accurate settlements, because controversial or poorly designed markets may trigger pledge forfeiture through validator governance.

Although pledge participation and agreement activity remain strong, these indicators do not by themselves confirm that Hyperliquid HIP-4 will gain widespread adoption. Long-term appeal will depend on successful testnet verification, the quality of market design, sufficient liquidity, builder engagement, governance effectiveness, and continued user demand as the framework continues to advance beyond the initial testing phase.

Conclusion

Hyperliquid HIP-4 represents an effort to test a broader infrastructure model that goes beyond operating high-performance derivatives platforms. The proposal does not simply introduce another trading product, but aims to establish a framework to support prediction markets, bounded options-like tools and other outcome-based applications through community engagement and verifier governance.

However, Hyperliquid has made it clear that the proposal is still under evaluation and that its final design will depend on testnet results, validator feedback and community input before a broader deployment is considered. Whether this move ultimately reshapes the role of the agreement will depend on successful execution, continued developer engagement, healthy liquidity, and continued adoption after a phased launch.