Kalshi reached 875 million USD in August, fiercely competing with Polymarket.

Kalshi is emerging as a notable force in the prediction market space, recording a trading volume of 875 million USD in August, while positioning itself as a legitimate, tightly regulated alternative to rival Polymarket – a platform that achieved 1 billion USD volume in the same period.

Last June, Kalshi successfully raised 185 million USD in a funding round led by the venture capital firm Paradigm, bringing the company's valuation to 2 billion USD post-investment. This funding, along with the hiring of a director for the crypto sector, indicates that Kalshi is preparing to expand into the crypto ecosystem and is ready to directly compete with Polymarket.

The core difference between Kalshi and Polymarket lies in their user approach and legal compliance. Kalshi operates as an exchange licensed by the U.S. Commodity Futures Trading Commission (CFTC), requiring users to deposit funds in USD and complete full KYC. This limits accessibility but provides legal certainty for investors in the U.S.

Meanwhile, Polymarket operates on the Polygon network and pays in USDC, allowing for partial anonymous trading and expanding its global reach. However, Polymarket faces barriers in the U.S. market due to the lack of a clear legal framework. CEO Shayne Coplan recently stated that Polymarket has been "given the green light" to operate in the U.S. following the acquisition of the derivatives platform QCEX.

The competition between the two platforms is opening up the possibility of convergence as both race to capture market share in the rapidly growing prediction market sector. The legal advantage helps Kalshi easily access institutions and investors in the US, while the capital from large funds in the crypto industry demonstrates an ambition to integrate blockchain technology. On the other hand, Polymarket, with its decentralized infrastructure and a mindset closely tied to crypto, has attracted significant volume from this community, but is still constrained by the legal framework in the US.

In the long run, this competition may bring direct benefits to users, with more refined features, deeper liquidity, and a more transparent legal environment for participating in the prediction market.

Thach Sanh