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Today, we highlight the below items:
DIGITAL ASSETS: Why Kalshi at $40B is still worth twice as much as Polymarket
ANALYSIS: Architect and the $11 Trillion AI Capital Markets
CURATED UPDATES: Financial Institutions and Adoption; DeFi and Digital Assets; Blockchain Protocols; NFTs, DAOs and the Metaverse
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DIGITAL ASSETS: Why Kalshi at $40B is still worth twice as much as Polymarket
Kalshi is raising again.
Seven weeks after closing a $1 billion Series F at $22 billion, the FT reports the prediction market operator is in talks at roughly $40 billion, with a close possible as soon as Q3. This is news about potential news!
For context: Kalshi was worth $5 billion last October, $11 billion in December, and $22 billion in May. An eightfold repricing in about eighteen months is very unusual. Reportedly, the company is now in talks with banks about an IPO, which CEO Tarek Mansour says could come after 2027.
We have covered both Kalshi and Polymarket before, usually through the lens of regulation and volume share.
This time we want to look at something more basic: the two companies have arrived at similar places — enormous institutional cap tables and ten-figure-plus monthly volumes — running fundamentally different economic machines.
One charges roughly 1% and books $2 billion in annualized revenue
The other spent five years charging nothing at all, while flirting with crypto
Kalshi’s machine is simple: it is a CFTC-regulated exchange that takes roughly 1% of every matched trade. No house risk, no balance sheet exposure to outcomes — just a toll on volumes, which have been extraordinary.
Annualized trading volume hit $178 billion by April 2026, up 32x year-on-year, and the company surpassed $2 billion in annualized revenue. At the $40 billion ask, that is roughly 20x revenue. Expensive, but not unhinged — Coinbase and Robinhood have traded at comparable multiples.
When we covered these two last time, Kalshi was worth twice as much as Polymarket. Since then, the valuation ratio has barely moved. The quality of that revenue is the real question. Are these just enormous online casinos, or something more fundamental related to information and financial markets?
For Kalshi, sports contracts account for roughly 65% of trading volume, which has gotten them in trouble.
Kentucky’s lawsuit alleges 89% of 2025 volume came from sports, which are precisely the contracts states are trying to ban. Arizona filed criminal charges in March, a Massachusetts judge barred Kalshi’s sports markets in January, and Nevada has extended its ban. The company’s entire legal theory — that event contracts are swaps under exclusive CFTC jurisdiction — is being litigated in more than a dozen states simultaneously, with a Michigan federal judge recently ruling that sports prediction markets are not swaps.
This is heading to the Supreme Court, and the big valuation requires winning the legal argument.
Kalshi has built a genuinely profitable marketplace whose economics depend on this classification. The 1% take rate is only defensible while Kalshi is the sole federally-blessed venue. DraftKings launched its own exchange this week, Robinhood is in event contracts, and CME is suing the CFTC over Kalshi's crypto perpetuals.
A courtroom victory invites the competition, which then erodes the 1% take rate. A defeat threatens the volume it's charged on.
Polymarket ran the opposite playbook.
When we analysed Intercontinental Exchange's (ICE) $2 billion investment last October after the NYSE parent took roughly 17% of the company, Polymarket had roughly 300,000 monthly active users, $1.3 billion in monthly volume, and no material revenue. It was a $9 billion valuation priced on cultural relevance and optionality.
Five years of zero fees was a deliberate liquidity subsidy, funded by venture capital, and it partially worked: 2025 volume reached $21.5 billion, nearly half the global prediction market total. The monetization switch finally flipped this year, and relative volumes have shifted back into Kalshi’s favour since.
Taker fees arrived on high-frequency crypto markets in January, and by early February weekly fee revenue exceeded $1.08 million. The full schedule (V2, effective March 30) now covers most categories, while the US exchange charges a uniform 0.05 taker fee with a maker rebate that dramatically undercuts Kalshi’s roughly 1% take. That undercut is the strategy: Polymarket is pricing to take share, not to maximise near-term revenue. Independent modelling suggests about $100MM-450MM of revenue.
Against a $15 billion valuation, even the bull case is north of 30x revenue and the base case is above 70x. So the fees don’t fully support the valuation. Two other things do.
First, data. ICE built half its business on selling market data. As part of the investment, ICE became the exclusive global distributor of Polymarket’s event-driven data to institutional clients: real-time probabilities on elections, Fed decisions, geopolitical events, delivered through the same infrastructure that carries NYSE prices. The offering was productised in February as Polymarket Signals and Sentiment — normalized feeds and historical time series that a hedge fund can plug into a model.
The pitch is that a liquid market beat the pollsters in the 2024 election, and that Polymarket can continue to deliver. A client can pay for the signal without ever placing a bet, which decouples revenue from volume entirely.
The second mechanism by which Polymarket is differentiated is the POLY token, planned for a 2026 launch, would route fee flow to stakers and let the company monetise its treasury position, which is a value-capture mechanism Kalshi structurally cannot replicate.
Put the three machines side by side.
DraftKings, the mature business, trades at 3x revenue because the market knows exactly what a sportsbook is and how much it earns (plus state licenses, promo spend, house risk).
Kalshi at 20x is priced as an exchange and generates real revenue. Exchanges get exchange multiples, bookmakers get bookmaker multiples, and more than a dozen states are litigating with Kalshi.
Polymarket at 70x+ on base-case fees is not priced on fees at all. It is priced on the data business, the token, and the possibility that the cheapest venue could win on volume.
All these bets still depend on outcomes we cannot fully foresee — a Supreme Court ruling for Kalshi, a token launch for Polymarket. Fittingly, their entire product is trading on things that haven’t happened yet.
👑Related Coverage👑
Analysis: Architect and the $11 Trillion AI Capital Markets
We examine the emergence of capital markets built specifically for AI infrastructure rather than AI applications, arguing that GPUs, compute capacity, and inference have become financial assets in their own right.
We discuss how an estimated $11T will be invested in AI infrastructure between 2024 and 2029, including roughly $7T financed by debt, creating demand for hedging, derivatives, and new financial markets. We highlight Architect’s launch of ComputeConnect, a regulated exchange linking GPU derivatives with physical compute delivery, as an example of crypto-native market structures expanding into AI infrastructure. Financial markets around AI infrastructure could become as important as the AI applications themselves by bringing price discovery, liquidity, and risk management to the largest technology investment cycle in history.
Curated Updates
Here are the rest of the updates hitting our radar.
Financial Institutions and Adoption
Nasdaq brings proprietary market data onchain through Pyth - CoinTelegraph
Uniswap, Spark aim to build stablecoin FX market as banks, fintechs enter the industry - CoinDesk
Stablecoin issuer Circle just got the greenlight to operate as a bank. The shares are up 5% - CNBC
BlackRock Adds Ethena’s Synthetic Dollar to Its $20T Aladdin Risk Management Platform - The Defiant
DeFi and Digital Assets
Aave Advances Automated AAVE Buyback Overhaul With Aavenomics 3.0 - The Defiant
Ondo Finance Launches 24/7 Minting and Redemption for Tokenized US Stocks and ETFs - Converge
Spark, Uniswap build stablecoin ‘FX Layer’ seeded with $150 million liquidity migration - The Block
Blockchain Protocols
Ethereum gets a new nonprofit focused on institutional adoption - CoinDesk
Glamsterdam update - Ethereum
Drift Protocol relaunches as Velocity Dex with Tether credit line - Cryptopolitan
NFTs, DAOs and the Metaverse
What is a governance attack? How BonkDAO lost $20M in a single vote - crypto.news
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Love these legal fights built on spin … they clearly are betting on sports regardless of the jargon spill.