Recently, Kalshi announced the completion of a $185 million Series C funding round led by Paradigm, with its valuation jumping to $2 billion; at the same time, Polymarket is also preparing to complete a nearly $200 million funding round, with its valuation exceeding $1 billion.

The frequent financing news in the platform race inevitably evokes thoughts of the undercurrents of competition and tension between platforms. A showdown over the future pricing power of information is quietly unfolding.

The love and hate of prediction markets

Kalshi was founded in 2020 and is headquartered in New York. It is currently the only legal prediction market platform approved by the Commodity Futures Trading Commission (CFTC) in the United States. Its investors include Y Combinator, former Charles Schwab CEO David Pottruck, and crypto venture capital firm Paradigm, with its latest funding round valuing the company at 1 billion dollars.

Polymarket represents a decentralized prediction market. The platform allows users to trade event predictions on the blockchain using the crypto stablecoin USDC, supporting on-chain settlement and providing strong liquidity. Its investment backers are also impressive, including Founders Fund, Polychain Capital, Naval Ravikant, Balaji Srinivasan, and others. The new round of financing is expected to amount to 200 million dollars, with a pre-financing valuation close to 1 billion dollars, led by Founders Fund.

In June of this year, Polymarket announced a partnership with the social platform X, led by Musk, to combine its prediction market data with the AI tool Grok launched by xAI, creating a “real-time prediction information stream.” Previously, Kalshi had been the first to negotiate a similar partnership with X, even having a brief “official announcement,” but this collaboration was retracted in less than 24 hours.

The outside world generally believes that there is a strong political implication behind this “lightning switch”—Donald Trump Jr., the son of Trump, is a senior advisor to Kalshi. The social media conflict between Musk and Trump is at its peak, and X’s abandonment of Kalshi in favor of the non-compliant Polymarket is interpreted as a strategic response to his political inclinations, while also reflecting Musk’s dissatisfaction with traditional regulation.

Related reading: 《X partners with Polymarket, bringing Musk closer to the “Everything App”.>

Recently, crypto investor Tom Schmidt revealed that Kalshi may have privately coordinated with former NFL players.Antonio Brown(AB) Organized public opinion attacks on Polymarket.

In a set of screenshots revealed by Pirate Wires, Kalshi’s growth department staffKeatonIt was revealed that he had privately messaged AB, requesting him to retweet with the caption “This guy looks guilty,” implying that Polymarket CEO Coplan was involved in criminal activities. Subsequently, AB posted the relevant tweet as instructed, confirming the fact that Kalshi organized the manipulation of public opinion and launched a smear campaign using social influencers.

Apart from Antonio Brown, Pirate Wires also found several KOLs with a large following who posted negative content after the FBI raided the Polymarket CEO, such as meme accounts.Clown World The day after the FBI raid, a tweet was posted mocking Polymarket CEO Coplan as the “illegal gambling version of SBF” and highlighting a paid partnership with Kalshi. This account also posted multiple times about Kalshi during the election period.

Miami influencer Arynne Wexler posted a video emphasizing that Polymarket is illegal in the U.S., repeatedly recommending Kalshi and advising viewers to “choose a compliant platform.” Relevant screenshots show that Arynne Wexler had previously engaged in private collaboration with Kalshi.

Kalshi vs Polymarket, which one is better?

Financing background: First-line capital is highly sought after.

Kalshi and Polymarket have both gained the favor of capital markets, backed by top VCs and industry figures betting on them, indicating that the prediction track is transitioning from “niche speculation” to “the next infrastructure” as part of a transformative path.

Kalshi was founded in 2019 through the Y Combinator winter incubation program and subsequently completed a $30 million Series A funding round led by Sequoia Capital in February 2021, with the company’s valuation soaring to $120 million, featuring heavyweight figures such as SV Angel, Charles Schwab (Chairman of Charles Schwab Corporation), and Henry Kravis (Co-founder of KKR). In October 2024, Kalshi secured another $50 million in funding, with notable institutions like Sequoia Capital, Mantis VC, and Neo participating, which will be used to expand the range of event contract categories and enhance platform capabilities. On June 26, 2025, Kalshi further completed a $185 million Series C funding round led by Paradigm at a valuation of $2 billion.

Polymarket’s financing path is more in line with the Web3 ethos: in the year it was founded in 2020, it secured a $4 million seed round led by Polychain, with an angel investment lineup that includes Web3 OG figures such as Balaji (former a16z partner, Coinbase CTO), Jack Herrick (founder of wikiHow), and Robert Leshner (founder of Compound). In 2022, it raised a $25 million Series A led by General Catalyst, with Airbnb co-founder Joe Gebbia and Polychain investing again. In May 2024, Polymarket completed a $45 million Series B round led by Founders Fund, founded by Peter Thiel (co-founder of PayPal and Palantir), with Ethereum founder Vitalik also personally investing. They are currently preparing for a new round of financing of $200 million, with a valuation expected to exceed $1 billion.

It is worth noting that Polymarket is supported not only by deep bets from traditional crypto capital but also has the endorsement of Silicon Valley legend Peter Thiel. Thiel led the Series B financing for Polymarket through his Founders Fund, which is also one of the early supporters of Musk’s X. Kalshi, on the other hand, received backing from members of the Trump family. Amid regulatory controversies in the election markets, the Trump camp’s indirect support for Kalshi has often been interpreted by the market as a “policy signal.” In this highly politicized arena, the game of capital and power has long surpassed merely predicting the outcomes of the races themselves.

Operating Mechanism: Centralized VS Decentralized

The core difference in the operational methods of Polymarket and Kalshi is mainly reflected in “decentralization vs centralization.”

Kalshi adheres to a centralized approach, utilizing a traditional centralized order book structure - the platform acts both as a matcher and a custodian of funds, with all transaction matching, result sourcing, and settlement processes completed in a closed loop within its platform. The trading experience is closer to that of the U.S. stock options market, and the entire logic is more conducive to institutional participation and regulatory access.

Polymarket fully embraces the decentralized narrative—AMM market-making mechanism, smart contract full-chain settlement, oracle determining the source of results, no need for a trust center, no need for registered real names, wallet is the transaction. The platform has embedded the characteristics of “freedom, fairness, and anti-censorship” into the code logic, making it closer to the “decentralization” of the crypto community.

Regulation: Compliance First VS Regulatory Red Lines

The regulatory gray area of prediction markets is no longer a secret, and the differing fates of Kalshi and Polymarket in this gray area further reveal the advantages and disadvantages of centralized versus decentralized approaches.

Kalshi broke through layers of regulatory obstacles to become an officially recognized prediction market: In June 2023, it caught the attention of the U.S. Commodity Futures Trading Commission (CFTC) due to election contracts. On June 12, Kalshi self-certified to the regulator, and on the 23rd, the CFTC initiated a formal review. It was ultimately denied on September 22, being rejected for “involving illegal gambling.” However, Kalshi did not give up and subsequently engaged in a protracted tug-of-war with the CFTC at the Washington Circuit Court of Appeals, ultimately winning in October 2024, becoming the first prediction platform in the U.S. to gain legalization for election contracts.

In stark contrast is the regulatory crackdown on Polymarket: as early as 2022, it was sued by the CFTC for offering unregistered over-the-counter binary options contracts, paying a fine of $1.4 million and “promising” to exit the U.S. market. However, according to on-chain access data, about 25% of the traffic still comes from U.S. users, with VPN circumvention of restrictions becoming the norm. After the U.S. elections in November 2024, Polymarket once again ignited the regulatory powder keg: the U.S. Department of Justice launched an investigation, the FBI raided the home of its founder Shayne Coplan and seized his electronic devices, accusing him of potentially manipulating platform outcomes to influence election opinions and guiding U.S. users to participate in trading. To this day, Polymarket remains in the status of an “illegal platform” as determined by the CFTC, with the shadow of regulation lingering.

Influence: Polymarket leads the way beyond the circle

If Kalshi wins within the rules, then Polymarket wins in breaking through the noise.

In the 2024 U.S. election, Polymarket accurately predicted Trump’s victory in advance, becoming a representative platform for “defying polls.” Bloomberg Terminal integrated its odds data into their system, and mainstream media outlets like The New York Times, The Economist, and The Wall Street Journal collectively cited on-chain prediction data for the first time, breaking the Web2 opinion barrier. Even Trump himself personally mentioned Polymarket at a rally, allowing its influence to permeate public opinion across the United States.

In terms of scale, Polymarket is already far ahead. The platform’s current TVL has reached $113 million, exceeding the total of the top ten platforms in the entire sector; the cumulative trading volume of the U.S. presidential election market in 2024 has surpassed $3 billion, with betting amounts exceeding $4 billion. In the same period, Kalshi’s total trading volume in the election market was $875 million, with betting amounts around $230 million. Whether it’s user participation, trading depth, or market feedback, Polymarket is undoubtedly the “phenomenal platform” in the current prediction sector.

Summary

Whether it is Kalshi, which follows a centralized compliance path, or Polymarket, which adheres to the spirit of decentralized autonomy, both represent different answers to the “pricing power of the future” in the information age. Whether these two paths ultimately converge remains to be seen with time. However, it is certain that prediction markets are moving from the margins to the center; they are no longer just a speculative game for a few, but are becoming a new way to interpret the world. Who dominates the situation is worth betting on.

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