Kalshi has chosen Solana to migrate its prediction markets on-chain, aiming to enable permissionless monetization of its global liquidity pool. The U.S.-based prediction market platform is introducing tokenized versions of thousands of its betting markets with the objective of attracting a crypto-native user base and securing liquidity.
This strategic move intensifies Kalshi's competition with Polymarket, a platform native to the Polygon blockchain, as both entities experience significant growth. November has emerged as the most substantial month to date for both platforms, with Kalshi's spot volume reaching $5.8 billion and Polymarket's volume exceeding $3.7 billion.
The burgeoning duopoly has entered a phase of hyper-growth following a policy shift by the U.S. Commodity Futures Trading Commission (CFTC). Historically, the CFTC had maintained a cautious stance on the largely academic domain of event derivatives. However, last week, the CFTC officially cleared the path for Polymarket to re-enter the U.S. market, reversing an initial ban on the unregistered platform.
Kalshi now appears poised to directly compete with Polymarket within the on-chain economy. The company is reportedly collaborating with Solana-based protocols DFlow and Jupiter to facilitate the integration of its off-chain order book with Solana's liquidity and to introduce new Kalshi Builder Codes.
These Builder Codes empower users to permissionlessly monetize applications built on top of Kalshi's extensive global liquidity pool. According to Kalshi's announcement, trading terminals, weather websites, AI agents, and any other applications users wish to develop can now generate fees and rewards commensurate with their trading volume.
Support for this initiative is already active, with decentralized finance protocols DFlow and Jupiter connecting Kalshi's off-chain order book to Solana's liquidity. John Wang, Kalshi's head of crypto, indicated that this transition is intended to access deeper capital pools as activity in prediction markets accelerates.
Wang's assessment suggests that tokenization provides Kalshi with access to billions of dollars in liquidity, enables developers to create third-party front ends, and helps maintain competitive pricing. The platform employs tokenization to transform its event markets into blockchain-based assets that can be traded on cryptocurrency networks.
This is not Kalshi's first engagement with Solana. In September, the startup initiated a grant program designed to support builders, traders, and creators who are advancing the frontier of prediction markets on Solana and on Coinbase-incubated layer-2 Base.
According to Bernstein, Kalshi's distribution partner, Robinhood, was responsible for approximately 57% of its trading volume in October. The decision to tokenize its betting markets represents a significant strategic gamble for the platform, particularly given its established reliance on traditional distribution channels.
Kalshi successfully raised $1 billion last month, achieving a post-money valuation of $11 billion. This funding round followed closely on the heels of news that Polymarket was seeking to raise capital at a valuation exceeding $12 billion. The competitive dynamic between these two platforms continues to intensify as both pursue ambitious expansion strategies.