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Hyperliquid rolls out new testnet for prediction markets

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Hyperliquid rolls out new testnet for prediction markets

Hyperliquid has launched Outcome Trading testnet, introducing fully funded contracts for prediction markets and event-based trading.

Summary

  • Hyperliquid launched Outcome Trading under HIP-4.
  • Contracts are fully collateralized with no leverage.
  • Mainnet launch may follow after testing.

Hyperliquid announced on Feb. 2 that it has launched “Outcome Trading” on its testnet under Hyperliquid Improvement Proposal 4.

The new feature allows users to trade fully collateralized outcome contracts that settle within a fixed price range. 

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What is Outcome Trading and how it works

Prediction markets and actual events, such as elections, sports, or economic data, are the main focus of these contracts. They are solely dependent on the outcome of the event and do not require leverage, unlike conventional crypto derivatives.

Traders must fund their positions in full, which removes the risk of forced liquidations. This structure is meant to provide a more stable and transparent way to trade uncertain events.

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Hyperliquid (HYPE) said the system introduces non-linear payouts and time-based settlement, giving traders more ways to express market views. It also responds to strong demand from users looking for lower-risk alternatives to perpetual futures.

Outcome Trading is built to work alongside existing tools such as portfolio margin and HyperEVM. This allows developers to combine outcome contracts with other decentralized applications on the platform.

At this stage, the feature is only available on testnet and remains under active development. Hyperliquid plans to launch curated “canonical” markets once testing is complete. These markets will be settled in USDH, the platform’s stablecoin, and will rely on objective data sources to reduce disputes.

If user feedback is positive, the company may later allow permissionless market creation, enabling anyone to launch outcome-based contracts.

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Why this matters for Hyperliquid and the market

The launch comes as Hyperliquid keeps pushing beyond its roots in perpetual futures. Earlier updates, including HIP-3, opened the door to permissionless markets for tokenized stocks, commodities, and other real-world assets.

Those changes have driven trading volumes and open interest to new highs, with several ecosystem projects reporting solid growth after the upgrades. With the introduction of outcome trading, Hyperliquid is now entering the quickly expanding prediction market, which is already dominated by companies like Polymarket and Kalshi.

The feature might be released on the mainnet later in 2026 if it becomes popular on the testnet. A smooth rollout would further cement Hyperliquid’s evolution into a multi-product, on-chain derivatives platform.

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Solana (SOL) Plunges Below $100, Bitcoin (BTC) Recovers From 15-Month Low: Market Watch

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BTCUSD Feb 4. Source: TradingView


Meanwhile, HASH and HYPE have declined the most over the past 24 hours after charting impressive gains lately.

Bitcoin’s adverse price actions as of late worsened yesterday when the asset tumbled to its lowest positions since early November 2024 at $73,000 before recovering by a few grand.

Most altcoins followed suit with enhanced volatility, but some, such as SOL, HYPE, and CC, have been hit harder than others.

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BTC’s Latest Rollercoaster

It was just a week ago when the primary cryptocurrency challenged the $90,000 resistance ahead of the first FOMC meeting for the year. After it became official that the Fed won’t cut the rates again, BTC remained sluggish at first but started to decline in the following hours.

The escalating tension in the Middle East was also blamed for another crash that took place on Thursday when bitcoin plunged to $81,000. It bounced off to $84,000 on Friday but tumbled once again on Saturday, this time to under $75,000. Another recovery attempt followed on Monday, only to be rejected at $79,000.

Tuesday brought the latest crash, this time to a 15-month low of $73,000. It has rebounded since then to just over $76,000, but it’s still 3% down on the day. Moreover, it has lost 14% of its value weekly and a whopping 18% monthly.

Its market capitalization has plummeted to $1.525 trillion on CG, while its dominance over the alts has declined to 57.3%.

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BTCUSD Feb 4. Source: TradingView
BTCUSD Feb 4. Source: TradingView

SOL Below $100

Most larger-cap altcoins have felt the consequences of the violent market crash lately. Ethereum went from over $3,000 to $2,100 in the span of a week, before bouncing to $2,280 as of now. BNB is down to $760, while SOL has plummeted to under $100 after a 7% daily decline.

Even the recent high-flyer HYPE has retraced hard daily. The token is down by 11% to $33. CC and ZEC are also deep in the red, while XMR has gained the most from the larger caps.

The cumulative market cap of all crypto assets has seen more than $70 billion erased in a day and is down to $2.65 trillion on CG.

Cryptocurrency Market Overview Feb 4. Source: QuantifyCrypto
Cryptocurrency Market Overview Feb 4. Source: QuantifyCrypto

 

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Pumpfun Unveils Investment Arm and $3 Million Hackathon

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Pumpfun Unveils Investment Arm and $3 Million Hackathon


PUMP rallied as much as 10% but erased its gains as crypto markets dipped.

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Spot Bitcoin ETF AUM Hits Lowest Level Since April 2025

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Spot Bitcoin ETF AUM Hits Lowest Level Since April 2025

Assets in spot Bitcoin (BTC) ETFs slipped below $100 billion on Tuesday following a fresh $272 million in outflows.

According to data from SoSoValue, the move marked the first time spot Bitcoin ETF assets under management have fallen below that level since April 2025, after peaking at about $168 billion in October

The drop came amid a broader crypto market sell-off, with Bitcoin sliding below $74,000 on Tuesday. The global cryptocurrency market capitalization fell from $3.11 trillion to $2.64 trillion over the past week, according to CoinGecko.

Altcoin funds secure modest inflows

The latest outflows from spot Bitcoin ETFs followed a brief rebound in flows on Monday, when the products attracted $562 million in net inflows.

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Still, Bitcoin funds resumed losses on Tuesday, pushing year-to-date outflows to almost $1.3 billion, coming in line with ongoing market volatility.

Spot Bitcoin ETF flows since Jan. 26, 2026. Source: SoSoValue

By contrast, ETFs tracking altcoins such as Ether (ETH), XRP (XRP) and Solana (SOL) recorded modest inflows of $14 million, $19.6 million and $1.2 million, respectively.

Is institutional adoption moving beyond ETFs?

The ongoing sell-off in Bitcoin ETFs comes as BTC trades below the ETF creation cost basis of $84,000, suggesting new ETF shares are being issued at a loss and placing pressure on fund flows.

Market observers say that the slump is unlikely to trigger further mass sell-offs in ETFs.

“My guess is vast majority of assets in spot BTC ETFs stay put regardless,” ETF analyst Nate Geraci wrote on X on Monday.

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Source: Nate Geraci

Thomas Restout, CEO of institutional liquidity provider B2C2, echoed the sentiment, noting that institutional ETF investors are generally resilient. Still, he hinted that a shift toward onchain trading may be underway.

Related: VistaShares launches Treasury ETF with options-based Bitcoin exposure

“The benefit of institutions coming in and buying ETFs is they’re far more resilient. They will sit on their views and positions for longer,” Restout said in a Rulematch Spot On podcast on Monday.

“I think the next level of transformation is institutions actually trading crypto, rather than just using securitized ETFs. We’re expecting the next wave of institutions to be the ones trading the underlying assets directly,” he noted.