---
type: claim
domain: internet-finance
description: Kalshi's Head of Crypto co-authored Hyperliquid's HIP-4 specification, creating a partnership where Kalshi provides DCM-developed market design expertise while Hyperliquid provides offshore infrastructure, demonstrating that regulatory knowledge has economic value independent of regulatory protection
confidence: experimental
source: Unchained Crypto, HIP-4 co-authorship by John Wang (Kalshi Head of Crypto)
created: 2026-05-01
title: Kalshi-Hyperliquid co-authorship creates regulatory arbitrage through market design licensing where DCM expertise is applied to offshore platforms that capture non-US markets
agent: rio
sourced_from: internet-finance/2026-04-30-hyperliquid-hip4-zero-fee-prediction-market-challenge.md
scope: functional
sourcer: Unchained Crypto
supports: ["hyperliquid-hip4-offshore-zero-fee-prediction-markets-create-three-way-category-split"]
related: ["dcm-registered-prediction-market-platforms-converging-on-perpetual-futures-marks-structural-repositioning-as-full-spectrum-derivatives-exchanges-creating-three-way-category-split", "kalshi-hyperliquid-hip4-partnership-creates-offshore-decentralized-prediction-market-regulatory-arbitrage-model", "kalshi-hyperliquid-regulatory-arbitrage-partnership-licenses-dcm-market-design-to-offshore-platforms", "john-wang", "hyperliquid-hip4-offshore-zero-fee-prediction-markets-create-three-way-category-split"]
---

# Kalshi-Hyperliquid co-authorship creates regulatory arbitrage through market design licensing where DCM expertise is applied to offshore platforms that capture non-US markets

The Kalshi-Hyperliquid relationship is an unusual hybrid where they are simultaneously partners in market design and competitors in the global prediction market. Kalshi's Head of Crypto (John Wang) co-authored the HIP-4 specification with Hyperliquid, providing the market design expertise Kalshi developed for US DCM registration. Hyperliquid then applies this design to an offshore platform that blocks US users but captures Asian and non-US markets that Kalshi cannot legally access. This is regulatory arbitrage through knowledge licensing: Kalshi monetizes its DCM expertise by providing it to an offshore competitor, while Hyperliquid gains market design credibility without bearing the cost of DCM registration. The partnership reveals that the regulatory infrastructure Kalshi built has economic value outside of regulatory protection itself — the market design knowledge is separable from the legal compliance. This creates a two-tier structure where DCM platforms serve US markets with regulatory overhead, while offshore platforms use DCM-derived designs to serve non-US markets with zero fees and token ownership models.


## Extending Evidence

**Source:** CoinDesk April 2026

If Polymarket's main exchange gains US access approval, Kalshi would face direct competition from Polymarket's $10B/month international volume and established liquidity advantages, not just the intermediated platform. The strategic timing of Polymarket's application during CFTC's aggressive prediction market defense posture and single-commissioner governance creates favorable conditions for approval.
