On May 26th, Hyperliquid further expanded its ambitions in the prediction market by officially launching a prediction market mechanism for real-world events through the HIP-4 upgrade. With this new change, the Hyperliquid network allows validators to directly participate in the creation and validation of prediction market results, instead of relying on external oracles like most current prediction market platforms.
According to an announcement posted by the Hyperliquid team on Telegram and Discord, prediction markets related to economic data, political events, or real-world events will be published through an automated newsfeed system operated by validators as part of the network's blockchain infrastructure. Validators will then vote to decide on the implementation and confirm the final results of each prediction market.
The development team stated that the validator's voting process will be based on various factors such as the clarity of market rules, the accuracy of the data, and the overall quality of the market. This is XEM as a crucial step towards making market prediction a core function within the Hyperliquid protocol, rather than operating as a supplementary application.
The most notable aspect of Hyperliquid's new mechanism lies in eliminating the need for external oracles. Hyperliquid developer Yaugourt stated that the validator is now the system's "oracle." This means that validating real-world events will become a native function of the Hyperliquid blockchain.
This approach sets it apart from many other popular prediction market platforms currently on the crypto market. For example, the Polymarket platform still uses the UMA Optimistic Oracle mechanism for users to propose and contest market outcomes. Kalshi, on the other hand, operates on a more centralized model where an internal team Vai data and makes final decisions.
Immediately after activating the new feature, Hyperliquid launched its first prediction market related to US CPI data, called “May CPI year-over-year.” This market allows traders to bet on the annual US CPI inflation rate for May. According to data from the platform, this market quickly recorded a volume of over $11,000 shortly after opening.
