Tokenization of prediction markets! Kalshi goes on-chain with Solana, achieving a monthly volume of 5.8 billion, surpassing Polymarket.

Kalshi has partnered with Solana to move its prediction market on-chain and enable the permissionless monetization of its “global liquidity pool”. Data shows that November has been the largest month for trading volume for Kalshi and Polymarket to date, with the former's spot trading volume rising to $5.8 billion and the latter's spot trading volume exceeding $3.7 billion.

Prediction Market Duel: Kalshi 5.8 Billion vs Polymarket 3.7 Billion

(Source: The Block)

According to data from The Block, November has been the largest month to date for Kalshi and Polymarket in terms of volume, with Kalshi's spot trading volume soaring to $5.8 billion and Polymarket's spot trading volume exceeding $3.7 billion. This explosive growth is largely driven by the U.S. elections, as the prediction market attracted significant attention and capital during the election period.

After the policy reversal by the U.S. Commodity Futures Trading Commission, the emerging dual monopoly market has entered a rapid growth phase. Previously, the Commission had taken a cautious approach to the event derivatives market, which was primarily based on academic research. Last week, the CFTC officially cleared the way for Polymarket to re-enter the U.S. market—this unregistered platform had previously been banned—making the competitive landscape between Polymarket and its main competitor Kalshi even more complex.

Kalshi once dominated the U.S. market, while the blockchain-native platform Polymarket focuses on global development. However, as Polymarket is approved to return to the U.S., the two will face off in the same market. This competitive landscape has prompted Kalshi to accelerate its blockchain strategy, gaining a technological edge through Solana tokenization.

It seems that no matter what action one prediction market takes, the other will closely follow. For example, in recent weeks, both Kalshi and Polymarket have signed distribution agreements with institutions such as Google Finance and the National Hockey League, while Galaxy Digital is exploring potential liquidity provision partnerships with competitor platforms. This synchronized competition shows that both companies are vying for market dominance.

Kalshi vs Polymarket Key Comparison

November Volume: Kalshi 5.8 billion USD vs Polymarket 3.7 billion USD

Blockchain Choice: Kalshi chooses Solana vs Polymarket based on Polygon

Valuation: Kalshi $11 billion vs Polymarket over $12 billion

Market Position: Kalshi U.S. Compliance vs Polymarket's Return to the U.S. After Globalization

Last month, Kalshi announced that the company raised $1 billion in funding at a post-money valuation of $11 billion. Earlier reports indicated that Polymarket was back in the market raising funds, with a valuation exceeding $12 billion. Both companies have reached a valuation in the tens of billions, demonstrating that the enormous potential of the prediction market sector has been recognized by top investors.

Solana Tokenization Strategy: Builder Codes Unlock Permissionless Monetization

Kalshi seems ready to go head-to-head with Polymarket in the on-chain economy space. According to reports, the company is collaborating with Solana-based protocols DFlow and Jupiter to help connect its off-chain order book to Solana's liquidity, and to develop new “Kalshi Builder Codes” that allow users to “monetize applications on top of its global liquidity pool without permission.”

Kalshi Builder Codes are the core innovation of this tokenization strategy. It allows third-party developers to build applications on top of Kalshi's prediction market and earn a share from the volume. “Trading terminals, weather websites, AI agents… anything you want to build can now earn fees and rewards proportional to the volume.” Kalshi said on X.

This permissionless ecosystem expansion strategy is highly characteristic of Web3. It not only opens Kalshi's prediction market to a broader developer community but, more importantly, creates an economic incentive mechanism that encourages third parties to bring users and volume to Kalshi. For example, a trading terminal developer can integrate Kalshi's prediction market, and when users trade through that terminal, the developer earns a commission. This model is similar to affiliate marketing, but the transparent settlement based on blockchain ensures fair distribution.

The roles of DFlow and Jupiter are as technology infrastructure providers. DFlow focuses on order flow optimization, seamlessly connecting Kalshi's off-chain order book with Solana's on-chain liquidity. Jupiter, as the largest DEX aggregator on Solana, handles over 80% of on-chain trading volume, and its integration will provide deep liquidity for the tokenized market of Kalshi.

Choosing Solana over other blockchains has been a well-considered decision. Solana's high throughput (theoretically 65,000 transactions per second) and low transaction fees (usually below $0.001) perfectly align with the high-frequency trading demands of prediction markets. In contrast, while Polymarket chose Polygon as its Layer-2 solution, it does not match Solana in terms of performance and ecosystem prosperity. This could become a competitive advantage for Kalshi.

Robinhood contributes 57% volume: Distribution collaboration is the key to victory

Although for Kalshi, tokenizing its betting market seems like a gamble. According to Bernstein, Kalshi's distribution partner Robinhood contributed about 57% of its trading volume in October. This figure reveals the core of Kalshi's business model: deep integration with traditional financial platforms.

As one of the largest retail brokerages in the United States, Robinhood has tens of millions of active users. When Robinhood integrates Kalshi's prediction market on its platform, these users can seamlessly participate in betting without leaving the familiar interface. The 57% contribution to volume demonstrates that this integration is extremely successful and proves the strong demand for prediction markets among traditional finance users.

This distribution strategy is also key to distinguishing Kalshi from Polymarket. As a crypto-native platform, Polymarket primarily attracts users who are already familiar with crypto wallets and DeFi. In contrast, Kalshi has reached a broader audience of traditional finance users through partnerships with mainstream platforms like Robinhood and Google Finance. Both strategies have their pros and cons: Polymarket users may be more crypto-savvy and risk-tolerant, while Kalshi has a larger user base but may require more education.

Now Kalshi chooses to tokenize the market on Solana, effectively combining two advantages: attracting mainstream users through traditional channels like Robinhood, while simultaneously attracting crypto-native users through Solana tokenization. If this dual strategy is successfully executed, it could give Kalshi an edge in the competition with Polymarket.

This is not the first time Kalshi has turned to Solana. In September of this year, the startup launched a funding program aimed at “supporting builders, traders, and creators driving the development of prediction markets on Layer 2 Base incubated on Solana and Coinbase.” Kalshi also uses ZeroHash for deposits and withdrawals of cryptocurrencies on Aptos, Avalanche, Sui, and multiple Ethereum Layer 2 networks. Polymarket has earlier this year enabled SOL deposit functionality.

Valuation Battle and Regulatory Dividend: 11 Billion vs 12 Billion Showdown

Last month, Kalshi stated that the company raised $1 billion in funding at a post-money valuation of $11 billion. Previously, there were reports that Polymarket had re-entered the market to raise funds, with a valuation exceeding $12 billion. Both companies' valuations reached the tens of billions of dollars, with not much difference, indicating that investors have equal confidence in both.

However, Kalshi has regulatory advantages that Polymarket lacks. Kalshi is a compliant prediction market registered with the CFTC in the United States, allowing it to legally serve U.S. users. In contrast, Polymarket was banned from serving U.S. users for being unregistered, and although it was granted permission to return last week, it still needs to establish a compliance framework. This regulatory certainty gives Kalshi an edge when partnering with traditional financial institutions.

From the perspective of financing scale, a single round of financing of 1 billion dollars is extremely rare, indicating that investors are highly optimistic about Kalshi's long-term prospects. This funding will be used for technology development, market expansion, and integration with more distribution partners. Tokenization on Solana may be one of the significant strategies supported by this funding.

Polymarket's valuation of $12 billion is slightly higher than Kalshi, which may reflect its global layout and the value of its crypto-native community. Polymarket's brand awareness globally may be higher than Kalshi, especially within the cryptocurrency community. However, as both enter each other's areas of strength (Kalshi moving into on-chain, Polymarket returning to the US), the valuation gap may further narrow.

The future landscape of prediction markets may be a coexistence of dual oligopolies: Kalshi dominating the compliant U.S. market and traditional financial users, while Polymarket leads the global market and crypto-native users. Both are rapidly growing and expanding their influence through tokenization and ecosystem integration. For investors and users, this competition will ultimately bring better products, lower costs, and richer market choices.