Kalshi, a prediction market platform, has announced plans to tokenize thousands of its event contracts on the Solana blockchain. This move signifies a substantial step in the company's cryptocurrency expansion.
This initiative bridges the event prediction platform’s traditional off-chain order book with on-chain liquidity. The objective is to attract crypto-native traders and facilitate the scaling of operations.
Essentially, Kalshi bettors will now have the ability to buy and sell tokenized versions of their wagers on the Solana network. These tokenized contracts will function similarly to the regular contracts previously hosted on Kalshi’s platform. By trading tokens instead of the actual contracts, users can benefit from blockchain-native advantages.
Kalshi Partners with Solana
This development positions Kalshi alongside its rival, Polymarket, which allows users to trade directly on-chain. According to Kalshi's statements, decentralized finance protocols DFlow and Jupiter will serve as institutional clients, merging the exchange’s off-chain order book with Solana’s liquidity.
This strategic move indicates Kalshi's commitment to attracting crypto holders as the demand for event contracts continues to increase.
John Wang, the company’s head of crypto, explained that by accessing the $3 trillion digital asset market, Kalshi anticipates securing the necessary liquidity to scale its offerings. This is particularly important at a time when investor interest in prediction markets is rapidly growing.
“There’s a lot of power users in crypto,” Wang stated. “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.”
Kalshi, established in 2018, was the first exchange to launch federally regulated event contracts on U.S. congressional races for American traders in late 2024. This followed a lengthy legal victory against the Commodity Futures Trading Commission.
The platform has since expanded its event contract offerings and currently operates approximately 3,500 markets. Last fall, Kalshi secured over $300 million in a funding round valuing the company at $5 billion. This round was supported by investors including Andreessen Horowitz and Sequoia Capital, and it also led to an expansion of its services to over 140 countries.
Polymarket Prepares to Re-enter the US Market
While Kalshi currently holds a first-mover advantage, it must continue to grow rapidly to outpace its competitors. This growth will necessitate substantial liquidity, which crypto-native traders' funds could provide, according to Wang.
Polymarket announced on November 25 that the U.S. Commodity Futures Trading Commission (CFTC) had issued an Amended Order of Designation. This order permits Polymarket to operate an intermediated trading platform, subject to the full requirements applicable to federally regulated U.S. exchanges.
This approval allows Polymarket to onboard brokerages and customers directly, facilitating trading on U.S. venues. It also permits the introduction of intermediated access, enabling users to trade through Futures Commission Merchants (FCMs) and leverage traditional market infrastructure, custody, and reporting channels.
“People rely on Polymarket because we provide clarity where there is confusion and accountability where there is ambiguity,” said Shayne Coplan, Founder and CEO of Polymarket.
Coplan further stated that the approval enables the company to operate in a manner that aligns with the maturity and transparency demanded by the U.S. regulatory framework.
“We’re grateful for the constructive engagement with the CFTC and look forward to continuing to demonstrate leadership as a regulated U.S. exchange,” he added.
As part of the amended order, Polymarket has implemented enhanced surveillance systems, market supervision policies, clearing procedures, and regulatory reporting capabilities compliant with part 16. The platform is also expected to introduce additional rules, policies, and processes relevant to intermediated trading before its official launch.
Furthermore, Polymarket will continue to be bound by all provisions of the Commodity Exchange Act and applicable CFTC regulations governing Designated Contract Markets, including its self-regulatory obligations.