Watching Prediction Markets: Kalshi vs Polymarket

--- Prediction markets are emerging as real-time forecasting engines, and Kalshi and Polymarket are shaping what that future looks like. --- Prediction markets give people the power to bet on anything—from what’s going to happen to the economy to who’s going to win the Champions League. The most common form of a prediction market is a binary options market, which gives the user two choices to bet on an outcome. The probability of either event happening is displayed from 0–100%, and the payout is adjusted based on crowdsourced probability odds. Interestingly, prediction markets can be thought of as part of a more general concept of crowdsourcing information, aggregating insights over unknown future outcomes. Learn more about Polymarket and Kalshi, the world’s leading prediction markets, in today’s episode of Whitepaper, where we’re strictly educational entertainment and not financial advice. ---

“Prediction markets aren’t about gambling—they’re about turning information into real-time economic signals.” ---

Key Takeaway

Prediction markets aggregate information using financial incentives
Kalshi and Polymarket dominate as a regulated–crypto duopoly
Kalshi monetizes more efficiently; Polymarket scales globally
AI bots and arbitrage are already reshaping the ecosystem
The next wave of growth is likely to come from Asia and new market innovation ---

The Two Giants: Kalshi vs Polymarket

The two largest prediction markets in the world right now are Kalshi and Polymarket. Both serve the same function—creating prediction markets for users—and are valued at over \$10 billion. The key difference is that Kalshi operates as a legal, regulated entity, while Polymarket operates offshore. Now here’s the thing: prediction markets, although they may sound like it, aren’t considered gambling. That’s because in a prediction market, you’re not betting against the house—you’re betting against another user. ---

How Prediction Markets Work

On Kalshi and Polymarket, you can buy and sell shares representing a future outcome. Examples include questions like: Will the latest Wicked movie be nominated for Best Picture? Or will BTC go below \$80k this year? Shares are created when opposing sides agree on odds. These shares are always priced between \$0 and \$1, and every pair of event outcomes is fully collateralized by \$1. At the end of the event, the final outcome is paid out at \$1 per winning share. So if you bought in at \$0.25, you’ll receive \$1.00, meaning \$0.75 in profit. Since these are shares, they can also be sold before the outcome is known, allowing users to lock in profits or cut losses. ---

Market Growth and Valuations

Recently, Kalshi raised \$1 billion, bringing its valuation up to \$11 billion. Polymarket, its crypto-native counterpart, is reportedly raising at a valuation between \$12–15 billion. This really tells you that demand for predictions is peaking, and people like being financially incentivized for being right. If you’re right, you get paid. If you’re wrong—but adjust early—you cut losses and still feel right based on new information. ---

Why Prediction Markets Are So Powerful

On a deeper level, prediction markets aggregate information through financial incentives, encouraging research, honesty, and rapid incorporation of new data such as news events or scandals. These odds often contrast with polls and expert opinions, because users have a direct incentive to be correct. When volume is high, prediction markets often become more accurate real-time probability indicators. This accuracy in crowdsourced knowledge makes them fascinating, with some likening them to a new data and forecasting infrastructure. ---

Founders and Ownership

Let’s talk about the founders behind these prediction market giants:

Tarek Mansour of Kalshi
Shayne Coplan of Polymarket Both founders are fully doxxed, public, and vocal about the potential of prediction markets as tools for human advancement and making knowledge productive. The media often frames them as rivals, usually favoring Kalshi due to its regulated status, while Polymarket is positioned as the on-chain alternative. But in reality, the market looks more like a duopoly:
Kalshi owns compliant U.S. fiat access
Polymarket owns global crypto scale ---

Business Models Compared

Kalshi operates with fiat binary contracts, earning approximately \$0.50 per trade in fees. Polymarket uses USDC with a peer-to-peer order book, charging 0.5% taker fees along with reward incentives. On an annualized basis:

Kalshi is reportedly generating \$700 million in revenue
Polymarket is generating approximately \$160 million In 2025, Kalshi processed around \$17.1 billion in annual volume, while Polymarket reached \$21.5 billion. That translates to weekly averages of roughly \$330 million and \$410 million, respectively. ---

Users and Market Focus

Kalshi does not disclose total unique users, but estimates show:

33k DAU, with peak DAU reaching 400k Polymarket reports:
Over 1.3 million unique users
Around 45k DAU
Peak WAU between 445k–495k in October and November Kalshi tends to dominate sports betting and mainstream markets, while Polymarket, due to its crypto roots, performs better in crypto-native and niche political markets. ---

Regulation and Expansion

Since receiving CFTC approval for election contracts, Kalshi has seen explosive growth and is now available in the U.S. and 140 countries. Polymarket has also benefited from a re-entry into the U.S. market following regulatory relaxation and is planning a native token launch in 2026. Kalshi dominates in lower fees, while Polymarket’s censorship-resistant infrastructure gives it higher scale potential. ---

Market Reactions and Emerging Meta

Global attention on prediction markets has reignited discussions around the “wisdom of crowds”—the idea that aggregated forecasts often outperform individual experts. Marketers are turning prediction markets into live-streamed content, betting in real time. Developers are building AI betting bots, reportedly achieving 70%+ win rates. Arbitragers have extracted an estimated \$40 million across Kalshi and Polymarket. Academics and media increasingly view prediction markets as real-time information infrastructure, not just financial products. ---

Final Thoughts

As the sector matures, it’s shaping into a duopoly in the U.S. market. Direct comparisons are difficult because each platform serves different audiences and operates under different models. Kalshi monetizes better per user, while Polymarket drives higher engagement in crypto and political niches. However, the Asian market remains wide open, with no clear leader yet. Asian markets are efficient at copying proven business models, so we can expect new entrants to emerge from mid-2026 onward. I also believe prediction markets are among the most decentralized economic models, simply because their incentive structures are stronger than most DAOs. I’m willing to bet that in 2026, we’ll see significant innovation in this sector, with fundraising increasingly shifting toward products that service prediction markets. That’s it for today’s episode of Whitepaper. I’ll see you on the next one.