Recently, Kalshi announced the completion of a $185 million Series C funding round led by Paradigm, increasing its valuation to $20 billion; meanwhile, Polymarket is also preparing to close a round of nearly $200 million in funding, surpassing a $10 billion valuation.

Funding news in the prediction platform space has been frequent, inevitably leading people to associate it with the competition and tension between platforms, setting the stage for a showdown over the future of information pricing rights.

The Love-Hate Relationship of Prediction Markets

Founded in 2020 and headquartered in New York, Kalshi is currently the only legally approved prediction market platform by the Commodity Futures Trading Commission (CFTC) in the U.S. Its investors include Y Combinator, former Charles Schwab CEO David Pottruck, and crypto venture capital firm Paradigm, with the latest funding round valuing the company at $10 billion.

Polymarket, on the other hand, represents decentralized prediction markets. The platform allows users to engage in event prediction trading on the blockchain using the USDC stablecoin, supporting on-chain settlement and boasting high liquidity. Its investor lineup is also impressive, including Founders Fund, Polychain Capital, Naval Ravikant, Balaji Srinivasan, among others. The upcoming funding round is expected to be $200 million, with a pre-money valuation close to $10 billion, led by Founders Fund.

In June this year, Polymarket announced a partnership with X, the social platform led by Musk, combining its prediction market data with the AI tool Grok launched by xAI to create a "real-time prediction news feed." Previously, Kalshi had initiated similar negotiations with X and even went as far as making an "official announcement," but the partnership was retracted in less than 24 hours.

It is widely believed that the "sudden pivot" behind this move carries significant political implications—Donald Trump Jr., the eldest son of Trump, is a senior advisor to Kalshi. Musk's social media conflict with Trump is at its peak, and X's abandonment of Kalshi in favor of the not-yet-compliant Polymarket is seen as a strategic response to its political leanings, while also reflecting Musk's dissatisfaction with traditional regulations.

Related Read: "X Collaborates with Polymarket, Musk Moves Closer to 'Everything App'"

Recently, cryptocurrency investor Tom Schmidt revealed that Kalshi may have privately coordinated former NFL player Antonio Brown (AB) to conduct an organized smear campaign against Polymarket.

In a set of screenshots disclosed by Pirate Wires, Kalshi's growth team member Keaton was exposed to have privately messaged AB, requesting him to retweet with the caption "This guy looks guilty," insinuating that Polymarket CEO Coplan was involved in criminal activities. Subsequently, AB followed the instructions and posted related tweets, confirming Kalshi's orchestrated manipulation of public opinion and the use of social media influencers to launch smear campaigns.

In addition to Antonio Brown, Pirate Wires also discovered that several high-profile Key Opinion Leaders (KOL) with large followings published negative content after the FBI raided Polymarket's CEO. For example, meme account Clown World posted a tweet the day after the FBI raid, mocking Polymarket CEO Coplan as the "illegal gambling version of SBF" and having a paid partnership with Kalshi. This account has also posted content related to Kalshi during the election period.

Miami social media influencer Arynne Wexler released a video emphasizing Polymarket's illegality in the U.S., repeatedly endorsing Kalshi and advising viewers to "choose a compliant platform." Screenshots indicate that Arynne Wexler had previously engaged in private collaborations with Kalshi.

Kalshi VS Polymarket, Who Will Prevail?

Funding Background: Highly Favored by A-List Investors

Kalshi and Polymarket have both received favor from the capital markets, with top VCs and industry figures backing them, indicating that the prediction market space is transitioning from "niche speculation" to the "next stop infrastructure" transformation path.

Kalshi made its debut back in 2019 through the Y Combinator winter incubation program. Later, in February 2021, it completed a $30 million Series A funding round led by Sequoia Capital, bringing the company's valuation to $1.2 billion. Heavyweights such as SV Angel, Charles Schwab (Chairman of Charles Schwab Corporation), and Henry Kravis (Co-Founder of KKR) were all involved. In October 2024, Kalshi secured another $50 million in funding, with participation from Sequoia Capital, Mantis VC, Neo, and other well-known institutions. The funds will be used to expand the event contract category and enhance platform functionality. On June 26, 2025, Kalshi achieved a $20 billion valuation with a $185 million Series C funding round led by Paradigm.

On the other hand, Polymarket's funding path has more of a Web3 essence: Founded in 2020, it secured a $4 million seed round led by Polychain in its founding year, with angel investors including Balaji (former a16z Partner, Coinbase CTO), Jack Herrick (wikiHow Founder), Robert Leshner (Compound Founder), and other Web3 OG figures. In 2022, it raised a $25 million Series A round led by General Catalyst, with repeat investments from Airbnb Co-Founder Joe Gebbia and Polychain. In May 2024, Polymarket completed a $45 million Series B funding round led by Peter Thiel's (Co-Founder of PayPal and Palantir) Founders Fund, with Ethereum Founder Vitalik personally participating. It is currently preparing for a new $200 million funding round, with an estimated valuation set to exceed $1 billion.

Notably, Polymarket not only has deep backing from traditional crypto capital but has also gained recognition from Silicon Valley legend Peter Thiel. Thiel led the B round funding for Polymarket through his Founders Fund, which was also an early supporter of Musk's X ventures. Kalshi, on the other hand, received endorsements from members of the Trump family. Amid regulatory controversies in the election markets, the indirect support from the Trump camp to Kalshi has been interpreted by the market several times as a "policy signal." In this highly politicized race, the game of capital and power has long transcended the prediction track itself.

Operating Mechanism: Centralized VS Decentralized

The core difference in the operational mode between Polymarket and Kalshi mainly lies in "decentralization vs centralization."

Kalshi adheres to a centralized approach, employing a traditional centralized order book structure — the platform serves as both a matchmaker and a fund custodian, with all transaction matching, result sourcing, and settlement processes completed internally within its platform in a closed loop. The trading experience is more akin to the US stock options market, and the entire logic is more conducive to institutional participation and regulatory access.

Meanwhile, Polymarket fully embraces a decentralized narrative — utilizing an AMM market-making mechanism, smart contract-based full-chain settlement, and oracle-determined result sourcing. No central trust is required, no need for real-name registration; the wallet is the means for trading. The platform has encoded the characteristics of "freedom, fairness, and censorship resistance" into its logic, aligning more closely with the crypto community's ethos of "decentralization."

Regulation: Compliance-First VS Regulatory Red Lines

The regulatory grey area of prediction markets is no longer a secret. The differing fates of Kalshi and Polymarket in this grey area further highlight the pros and cons of the centralized and decentralized paths.

Kalshi broke through the regulatory barriers and became an officially recognized prediction market: In June 2023, its election contract caught the attention of the US Commodity Futures Trading Commission (CFTC). On June 12, Kalshi self-certified to the regulator, leading to a formal review by the CFTC on the 23rd, which was ultimately denied on September 22 under the grounds of "involvement in illegal gambling." However, Kalshi did not give up and subsequently engaged in a protracted legal battle with the CFTC in the Washington circuit appellate court, eventually winning in October 2024 to become the first prediction platform in the US to obtain legalization for election contracts.

In stark contrast is the regulatory siege against Polymarket: As early as 2022, it was sued by the CFTC for offering unregistered off-exchange binary options contracts, resulting in a $1.4 million fine and a "commitment" to exit the US market. However, according to on-chain data, around 25% of the traffic still originates from US users, with circumventing restrictions through VPNs becoming the norm. In November 2024, after the US presidential election, Polymarket once again ignited regulatory scrutiny: The US Department of Justice launched an investigation, and the FBI raided founder Shayne Coplan's residence, seizing his electronic devices, alleging potential manipulation of platform results to influence election public opinion and guide US user participation in trading. To this day, Polymarket remains in a state identified by the CFTC as an "illegal platform," with regulatory shadows looming large.

Influence: Polymarket Leading the Way Beyond the Circle

If Kalshi won within the realm of rule-setting, then Polymarket won by breaking out in terms of volume and influence.

In the 2024 U.S. election, Polymarket accurately predicted Trump's victory ahead of time, becoming the representative platform for "contradicting polls." Bloomberg Terminal integrated its odds data, and mainstream media such as The New York Times, The Economist, and The Wall Street Journal collectively cited on-chain prediction data for the first time, breaking through the Web2 opinion barrier. Even Trump himself personally mentioned Polymarket at a rally, expanding its influence from within the chain to the entire American public opinion.

In terms of scale, Polymarket has long been in a league of its own. The platform's current TVL has reached $1.13 billion, surpassing the sum of the top ten platforms in the field. The total trading volume in the 2024 U.S. election market on Polymarket has exceeded $3 billion, with bets totaling over $4 billion. In comparison, during the same election cycle, Kalshi had a total trading volume of $875 million in election markets, with bets totaling around $230 million. Whether in terms of user engagement, trading depth, or market feedback intensity, Polymarket is undoubtedly a "phenomenal platform" in the current prediction race.

Summary

Whether following the path of centralized compliance like Kalshi or adhering to the spirit of decentralized governance like Polymarket, both represent different answers to the "future pricing power" in the information age. Whether these two paths will ultimately lead to the same destination remains to be tested by time. However, it is certain that the prediction market is transitioning from the periphery to the center. It is no longer just a speculative game for a few, but has become a new way to interpret the world. Who will rise or fall is worth betting on.

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