Hyperliquid has activated permissionless deployments for its HIP-4 prediction-market framework on testnet, a move that aims to expand the DEX’s ecosystem beyond perpetual futures. The update coincides with a sharp drop in the protocol’s native token, HYPE, which fell through the psychological $55 support level amid bearish market sentiment and large whale transfers.
HYPE traded around $54.70, down nearly 2% in the session and 7% for the week, reversing its earlier uptrend. The decline followed the broader crypto market’s weakness — Bitcoin slid below $64,000 on geopolitical tensions — and was compounded by on-chain data from Lookonchain showing a major holder unstaking 1.02 million HYPE and depositing tokens to institutional platforms FalconX and Coinbase Prime. The holder had accumulated at an average price of about $18 several months ago, sitting on a significant unrealized gain. While the transfers do not confirm a sale, they typically signal incoming supply pressure, weighing on the token.
On the development side, HIP-4 allows developers to create and test their own prediction and outcome markets, mirroring the permissionless perpetual markets enabled by HIP-3. Initial activity on the framework remains modest: open interest in HIP-4 contracts stands near $182,000, with notional trading volume at $881,000 — far below established competitors like Polymarket. Activity has dropped since the FIFA World Cup ended earlier in July, highlighting the current concentration in sports markets. Hyperliquid plans to add configurable fees and more templates as testing progresses, but no mainnet release date has been set.
The rollout carries operational risks. A recent incident involving a HIP-3 market — a SK Hynix perpetual contract that briefly crashed 17.9% due to an anomalously low pre‑market trade — underscored the importance of reliable pricing oracles as Hyperliquid opens market creation to more developers. The team at Trade.xyz, which operated that market, is investigating.
Hyperliquid also received policy support: the Hyperliquid Policy Center and Multicoin Capital jointly filed a comment endorsing the CFTC’s proposed prediction‑market framework, which could clarify rules for event contracts offered to U.S. traders. For now, the near‑term outlook for HYPE depends on whether bulls can reclaim the $55 level and whether HIP-4 testnet participation revives open interest, particularly in diverse event types beyond sports.
