Kalshi exec submits Hyperliquid improvement proposal to solve prediction market deployment challenges

Four authors submitted Hyperliquid Improvement Proposal 4 (HIP-4) on Sept. 16, introducing “Event Perpetuals” to allow prediction markets on the platform’s order ebook infrastructure.

The proposal lists Kalshi’s head of crypto, John Wang, amongst its 4 co-authors. The textual content addresses limitations in Hyperliquid’s present HIP-3 builder-deployed perpetuals for prediction market use circumstances.

The present infrastructure requires steady oracle updates and limits worth modifications to 1% per tick, making binary occasion decision impractical.

Event Perpetuals’ aim is to eradicate steady oracle feeds and funding funds, with costs decided completely by buying and selling exercise. The contracts settle with binary payoffs reflecting market-implied possibilities between 0 and 1, resolving immediately to both end result upon occasion conclusion.

The proposal demonstrates present limitations by means of NFL betting eventualities, the place sportsbook odds replace as step capabilities throughout video games.

Under HIP-3 constraints, settling a market from impartial (0.5) to zero likelihood would require 50 minutes due to tick limitations, creating arbitrage alternatives for knowledgeable merchants.

The connected oracle settling chart illustrates the uneven decision drawback, exhibiting speedy settlement towards 1.0 however gradual decay towards 0, highlighting infrastructure challenges that motivated the brand new proposal.

Auction mechanism for truthful worth discovery

Event Perpetuals launch by means of single-price clearing auctions lasting roughly quarter-hour.

The system evaluates all candidate costs to maximize matched quantity, with tie-breaking favoring minimal imbalance and costs closest to 50%.

The clearing mechanism diagram exhibits bid and ask distributions throughout worth ranges, with the system calculating optimum clearing costs that stability provide and demand.

Orders execute uniformly on the decided opening worth earlier than steady buying and selling begins.

Builders deploy markets by staking 1 million HYPE tokens and might cost up to 50% extra charges above base charges.

The infrastructure helps market recycling, permitting new occasions to change resolved markets inside present slots.

Event Perpetuals function with 1x remoted margin solely, requiring patrons to deposit collateral equal to their most potential loss.

The proposal concludes that buying and selling happens inside worth bands of 0.001 to 0.999, with decision oracles posting remaining values throughout specified problem home windows for dispute decision.

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