Kalshi Courts Crypto Traders With Tokenized Betting Contracts On Solana

Kalshi bettors can now buy and sell tokenized versions of their wagers on Solana, the company told CNBC exclusively on Monday. It’s the latest indication that the prediction market company is intensifying its efforts to attract the same cryptocurrency holders who have funneled billions of dollars of digital assets into rival Polymarket.

Tokenization refers to creating a digital representation of a real-world financial asset such as a stock, bond or treasury note. The resulting token, which can be held or traded like a standard asset, exists on a decentralized ledger known as a blockchain, such as Solana or Bitcoin.

The tokenized versions of the contracts function the same as the regular ones previously available on Kalshi’s platform. However, by trading tokens instead of the actual contracts, users gain more anonymity. This places Kalshi on par with Polymarket, which allows users to trade directly on-chain.

Support for tokenized wagers linked to Kalshi’s event contracts is live on Solana, Kalshi told CNBC. Decentralized finance protocols DFlow and Jupiter will serve as institutional clients, bridging the exchange’s off-chain order book to Solana’s liquidity.

Kalshi is doubling down on its effort to court crypto holders as demand for event contracts accelerates. Prediction markets’ combined trading volume reached nearly $28 billion through October of this year, hitting a weekly record high of $2.3 billion during the week of October 20, according to data cited by Crypto.com’s research arm.

By tapping into the $3 trillion digital asset market, Kalshi will be able to shore up liquidity needed to scale its offerings at a time when investors’ appetite for prediction markets is growing rapidly, John Wang, the company’s head of crypto, told CNBC.

“There’s a lot of power users in crypto,” Wang said. “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.”

Founded in 2018, Kalshi was the first exchange to launch federally regulated event contracts on U.S. congressional races for American traders in late 2024, shortly after winning a years-long legal battle against the Commodity Futures Trading Commission.

Since then, Kalshi has added more event contracts to its platform, running about 3,500 markets, according to a company representative. Last fall, it raised more than $300 million at a $5 billion valuation in a funding round backed by crypto heavyweights Andreessen Horowitz and Sequoia Capital, and expanded its footprint to more than 140 countries.

But its first-mover advantage may not be enough to keep the platform competitive, particularly as Polymarket relaunches in the U.S. Kalshi will need to continue growing to edge out rivals, and it will require ample liquidity to do so — something crypto-native traders’ funds could provide, according to Wang.

Digital asset holders tend to be particularly active on prediction markets, trading at higher volumes than their non-crypto peers, meaning their presence on the platform is likely to meaningfully boost liquidity across Kalshi’s markets, the executive said. By tapping into that liquidity, Kalshi can ensure competitive and accurate pricing across its platform, he added.

“If you have a market with no liquidity, then you don’t really have a market,” Wang said. “People can’t really trade size or get the prices that they want.”