Kalshi, a prediction market platform, is making significant strides in its cryptocurrency expansion by announcing plans to tokenize a vast array of its event contracts on the Solana blockchain. This innovative move serves to link the platform”s traditional off-chain order book with on-chain liquidity, thereby appealing to crypto-native traders and enabling the scaling of its operations.
As reported exclusively to CNBC, this partnership allows Kalshi bettors to purchase and trade tokenized representations of their wagers on the Solana network. These tokenized contracts will function similarly to the conventional ones previously available on Kalshi”s platform. However, by opting for token trading, users can access a range of advantages associated with blockchain technology.
This development positions Kalshi on a competitive level with its rival Polymarket, which facilitates direct on-chain trading. According to company representatives, decentralized finance protocols DFlow and Jupiter will act as institutional clients, facilitating the integration of Kalshi”s off-chain order book with the liquidity available on Solana. This strategic move highlights Kalshi”s commitment to attracting crypto holders, especially as interest in event contracts continues to rise.
John Wang, Kalshi”s head of crypto, emphasized the importance of tapping into the expansive $3 trillion digital asset market, stating that this initiative aims to bolster the liquidity necessary for scaling their offerings at a time when investor interest in prediction markets is surging. “There”s a lot of power users in crypto,” Wang remarked, “This is about tapping into the billions of dollars of liquidity that crypto has, and then also enabling developers to build third-party front ends that utilize Kalshi”s liquidity.”
Founded in 2018, Kalshi was the inaugural exchange to launch federally regulated event contracts for U.S. congressional races. The platform has since broadened its offerings, currently hosting around 3,500 markets. In a notable funding round last fall, Kalshi secured over $300 million at a valuation of $5 billion, with backing from prominent investors including Andreessen Horowitz and Sequoia Capital. This expansion has enabled Kalshi to extend its services to over 140 countries.
While Kalshi currently holds a first-mover advantage, it must continue to grow rapidly to maintain its edge over competitors. This growth will necessitate ample liquidity, which the influx of crypto-native traders could provide, as Wang points out.
In a related development, Polymarket recently announced that the U.S. Commodity Futures Trading Commission (“CFTC”) has granted an Amended Order of Designation, allowing it to operate as an intermediated trading platform under strict federal regulations. This approval enables Polymarket to onboard brokerages and customers directly, thus facilitating trading within U.S. venues.
Shayne Coplan, Founder and CEO of Polymarket, expressed optimism about the approval, noting that it reflects the maturity and transparency that the U.S. regulatory framework demands. Under this amended order, Polymarket has also implemented enhanced surveillance systems and market supervision policies to ensure compliance with CFTC regulations.
