The Commodity Futures Trading Commission (CFTC) has filed an amicus brief in the United States Court of Appeals for the Sixth Circuit following a United States District Court decision involving Kalshi in Ohio.

 

 

Through this filing, the CFTC seeks to assert its exclusive jurisdiction over prediction markets and to overturn the ban previously imposed by Chief Judge Sarah D. Morrison of the United States District Court for the Southern District of Ohio.

 

“The federal district court in Ohio took an improperly narrow view of the Commission’s jurisdiction, and we are asking the Court of Appeals to correct that error,” said CFTC Chairman Michael S. Selig. “As I’ve said repeatedly, the CFTC will not allow overzealous state governments to undermine the agency’s longstanding authority over these markets.”

 

Kalshi’s Case Against Ohio

The March ban on Kalshi by an Ohio district court dates back to early 2025, when the Ohio Casino Control Commission (OCCC) issued a cease-and-desist order to Kalshi, instructing it to stop offering its sports event contracts in the state, alleging that those contracts were illegal.

 

Following this order, Kalshi sued state regulators and other state officials, seeking a preliminary injunction to block enforcement of the cease-and-desist order. However, the case was dismissed when Judge Sarah D. Morrison ruled against Kalshi, allowing state regulators to enforce the ban and later impose a $5 million fine on Kalshi for continuing to offer sports event contracts in the state.

 

Kalshi has now appealed to the United States Court of Appeals for the Sixth Circuit, seeking to overturn the ban. In its amicus brief filing, the Commodity Futures Trading Commission (CFTC) not only argues for the removal of the ban but also seeks to protect prediction market companies from what it describes as an ongoing campaign of state encroachment.

 

As part of its protective efforts, the CFTC has engaged in legal disputes with several U.S. states, including Wisconsin, Illinois, Arizona, Connecticut, and New York, over their regulatory stance and enforcement actions against prediction market companies.

 

Despite the challenging regulatory environment faced by prediction market companies, the sector has grown significantly. In 2025, annual trading volume across prediction market platforms rose to approximately $63.5 billion from $15.8 billion in 2024. The number of users across prediction market companies has also increased, with institutional investors showing greater interest and contributing more capital to these platforms.

 

 

The U.S. Commodity Futures Trading Commission has been making the rounds. CFTC Chairman Michael Selig confirmed this month that his agency is in active talks with all major professional sports leagues in the United States, as regulators scramble to get ahead of potential insider trading problems on prediction markets.

 

"We're talking to all the sports leagues because it's critical that they've got the best information as to what's manipulable in their markets and where the insider trading risks are," Selig said on the Faro Radio podcast. The comments come after months of escalating alarm in Washington over the explosion of prediction market trading tied to sports, politics, and military events.

 

A Market That Grew Too Fast

The numbers tell the story. Monthly trading volume on prediction markets has jumped from around $1.2 billion in early 2025 to over $20 billion by January 2026, according to blockchain research firm TRM Labs. Sports event contracts alone now make up nearly 90% of all bets placed on Kalshi over the past year, according to the Congressional Research Service. That kind of scale, combined with the potential for people with inside knowledge to profit on it, has made regulators nervous.

 

"The biggest issue that comes up is manipulation and insider trading in these markets," Selig told Front Office Sports. And the regulator isn't just talking. In March 2026, the CFTC and Major League Baseball entered into a first-of-its-kind memorandum of understanding, establishing a formal framework for confidential information-sharing between the federal agency and the league. It was a signal that more deals could be coming.

 

Leagues Are Moving, Too

The NHL, MLS, and MLB have all inked prediction market partnerships with Polymarket and Kalshi over the past several months. The NBA is reportedly in active talks with both platforms. The NFL has been the notable holdout, citing integrity concerns, and Selig declined to confirm whether those conversations are ongoing. What is clear is that the agency sees league cooperation as essential. The CFTC has told prediction markets it expects them to share information with leagues about which categories of individuals should be restricted from trading, including players, coaches, referees, trainers, and data partners.

 

The platforms themselves moved to tighten their own rules in March. Kalshi introduced new technological guardrails to block athletes from trading on contracts tied to their own leagues, and politicians from betting on their own races. Polymarket updated its rulebook the same day to prohibit trading on any information that would "violate a preexisting duty or obligation of trust," even when that information was obtained secondhand.

 

The urgency is partly driven by what has already happened in other markets. In April 2026, the CFTC filed its first-ever insider trading complaint involving event contracts, charging an active-duty U.S. Army soldier with using classified intelligence about a military operation in Venezuela to trade Polymarket contracts, generating more than $400,000 in profit. The DOJ has since signaled it will pursue criminal prosecutions for insider trading on prediction markets as well. Jay Clayton, the U.S. Attorney for the Southern District of New York, said in February that his office expects to bring fraud cases tied to prediction market trading.

 

Sports have precedent of their own. The NBA's lifetime ban of Jontay Porter and the federal charges hanging over former Miami Heat guard Terry Rozier both stem from sports betting misconduct. Prediction markets are a different product legally, but the underlying concern, that people with privileged access to information are using it to profit, is exactly the same.

 

Congress Is Watching

Capitol Hill is paying attention, too. A coalition of Democratic lawmakers sent a letter to the CFTC in late April urging the agency to issue a formal rule prohibiting certain types of event contracts and curbing insider trading. The letter, led by Sen. Jeff Merkley of Oregon, described the rapid growth of prediction markets as an "erosion of integrity" that demands regulatory action. Separate legislation has been introduced that would bar government officials from using prediction markets entirely and prohibit event contracts tied to elections, war, and sports.

 

The CFTC, for its part, published an Advanced Notice of Proposed Rulemaking in March seeking public comment on whether to amend regulations governing prediction market event contracts. Selig has framed the issue in stark terms, drawing comparisons to the offshore drift that plagued crypto markets before FTX. "I'm concerned we'll see the same with prediction markets if we keep pushing it offshore into the unregulated space," he said.

 

For now, the talks with sports leagues continue. Whether they translate into formal agreements on the scale of the MLB deal, and how quickly, may determine how effectively the CFTC can police the fastest-growing corner of the derivatives market before the next scandal breaks.

 

MoonPay is not slowing down. The crypto payments giant announced Monday the acquisition of Dawn Labs, an applied AI research startup focused on autonomous trading tools for digital asset markets. Alongside the deal, the company launched Dawn CLI, a product that lets users build and execute trading strategies using plain-English prompts. No coding background required.

 

The move pushes MoonPay deeper into what it calls the "agentic" layer of crypto, where AI systems can reason, plan, and now, apparently, trade on your behalf. It also adds another chapter to the company's broader infrastructure buildout, which has been accelerating through 2025 and into this year.

 

Plain English, Real Trades

Dawn Labs founder Neeraj Prasad, who now serves as Chief Engineer of MoonPay Labs, put it bluntly: until now, building a systematic trading strategy meant being a developer, a quantitative analyst, and a portfolio manager all at once. Dawn CLI collapses all of that into a single interface. You describe what you want, the system writes the code, and then it runs.

 

The platform is launching first on Polymarket, the decentralized prediction market that has seen explosive growth over the past two years, attracting traders betting on elections, sports results, economic data, and geopolitical events. Prediction markets have gone from a niche crypto experiment to a mainstream information layer, and tools to actually trade them systematically have lagged badly behind the demand. That's the gap MoonPay is targeting.

 

"We're starting with prediction markets because they are one of the fastest-growing sectors, and many traders in the space are underserved by existing tooling," Prasad said. Additional trading venues and asset types are on the roadmap for the coming months.

 

Infrastructure First Model

The Dawn Labs deal sits within a larger strategic context. Earlier this year, in February, MoonPay launched MoonPay Agents, a non-custodial software layer built on its developer-focused command-line interface that lets AI agents access crypto wallets, execute trades, perform cross-chain swaps, and off-ramp back to fiat, all autonomously. CEO and founder Ivan Soto-Wright described the thinking in stark terms: "AI agents can reason, but they cannot act economically without capital infrastructure. MoonPay is the bridge between AI and money."

 

The service works through a one-time KYC process, after which an agent can transact on behalf of the verified user within preset permissions. Wallets are non-custodial and stored on the user's device, not held by MoonPay. It also supports the x402 standard, a machine-to-machine payments protocol that has been gaining traction across the industry, with Stripe and Cloudflare both adding support in recent months.

 

A Broader Industry Shift

MoonPay is not alone in this push. Gemini launched its own agentic trading feature for AI agents back in April, and Coinbase, Stripe, and Amazon have each rolled out AI-compatible stablecoin payment rails in recent months. Solana and Google have made similar moves. The pattern is clear enough: major players across crypto and fintech are racing to build the financial plumbing that AI agents will need to operate as independent economic actors.

 

For MoonPay specifically, it sees this as a natural extension of what it already does. The company, founded in 2019, serves more than 500 enterprise clients and 30 million users globally. Its core business has always been connecting fiat payment systems to blockchains. Extending that to AI systems is, in some ways, the logical next step.

 

Prasad said the company does not view AI agents and human traders as separate customer bases. "We've been building MoonPay around four pillars: fund, tokenize, trade, and spend," he explained. "Our agentic products put that same stack in the hands of both humans and machines."

 

What Comes Next

Following the Agents launch in February, MoonPay unveiled a Ledger integration in March, allowing AI-initiated transactions to be signed on a hardware device, a notable security step for users wary of handing autonomous control to software alone. The Dawn CLI launch now adds an execution layer on top of that infrastructure, specifically aimed at traders who want strategy-building capabilities without the technical overhead.

 

Whether retail traders will warm to the idea of an AI agent placing bets on Polymarket on their behalf remains to be seen. But MoonPay is clearly positioning itself well ahead of that question. If the agentic economy arrives on the timeline its backers expect, the company wants to be the rails it runs on.

 

Leading startup accelerator Y Combinator will be holding the first-ever interview session in New York City, keenly focused on fintech builders developing projects around tokenization, stablecoins, prediction markets, and trading.

 

 

According to a YC spokesperson, the New York event will be the first of its kind, as it will focus on a specific sector, with accepted startups joining the Y Combinator Summer 2026 batch, which will begin on June 23 in San Francisco. Once a startup is accepted into the accelerator program, Y Coombinator will invest immediately in the company, even before the summer batch begins.

 

With New York becoming a major fintech hub in the U.S. and accounting for around 30% of all U.S. fintech investment in 2025, while also being home to roughly 1,500 crypto and fintech startups, Y Combinator is making this move to tap into this fast-growing sector and back more startups in the space.

 

Y Combinator Investing in Crypto

Through its funding, Y Combinator has helped support some of the most successful companies in the crypto space, with several reaching and surpassing unicorn status.

 

In 2012, Y Combinator invested about $150,000 into the crypto exchange Coinbase, acquiring an approximately 7% stake in the company. With support from Y Combinator and other early investors, Coinbase has grown into one of the largest crypto exchanges in the world, with a market cap of around $52 billion.

 

Y Combinator also invested early in the decentralized exchange Uniswap, contributing about $120,000 in 2018. Like Coinbase, Uniswap has grown into one of the largest decentralized exchanges, with a valuation of around $2 billion.

 

The startup accelerator has also invested in the prediction market sector, backing Kalshi at an early stage. With support from early investors, including Y Combinator, Kalshi has grown into one of the leading prediction market companies and recently raised $1 billion in a Series F round, reaching a valuation of $22 billion.

 

Other crypto companies that have benefited from Y Combinator’s support include the NFT marketplace OpenSea, blockchain intelligence company TRM Labs, and the Solana-based trading platform Axiom, with all of these companies surpassing the $1 billion valuation mark.

 

 

Gemini Olympus, LLC, an affiliate of the Gemini cryptocurrency exchange, has recently received a Derivatives Clearing Organization license from the Commodity Futures Trading Commission, enabling it to act as the clearinghouse for Gemini’s regulated derivatives trading, including prediction markets.

 

“Today marks a major milestone in Gemini’s marketplace expansion. In addition to our crypto spot marketplace, Gemini now has a full-stack, end-to-end marketplace for predictions as well as futures, options, and more,” said Cameron Winklevoss, Gemini’s president. He added that the DCO license is a major stepping stone toward Gemini achieving its goal of building a super app that allows users to fulfill all their existing and future financial needs in one place.

 

 

With this newly secured DCO license, together with the Designated Contract Market license that Gemini Titan, LLC, another Gemini entity, secured around December of last year, Gemini is now one step closer to obtaining the full suite of CFTC derivatives licenses.

 

Once it secures the Futures Commission Merchant license, the final component of the CFTC derivatives licensing framework, the company would be able to position itself as a fully regulated derivatives platform in the United States, offering U.S. customers a range of products, including crypto futures, options, and perpetual futures.

 

Gemini Joins Exchanges in Crypto Derivatives Push

With the Derivatives Clearing Organization license now secured and the Futures Commission Merchant license in sight, Gemini has joined a host of other crypto exchanges, including Kraken, Crypto.com, and the Chicago Mercantile Exchange, in the race to position themselves as all-in-one derivatives platforms.

 

To break into the derivatives market, Payward, the parent company of the cryptocurrency exchange Kraken, acquired Bitnomial, a U.S.-based derivatives exchange, for $550 million last month. Like Kraken, Coinbase has also taken the acquisition route to enter the crypto derivatives market, acquiring Deribit Exchange for $2.9 billion and The Clearing Company for an undisclosed amount.

 

The race to provide complete crypto derivatives offerings is not unique to cryptocurrency exchanges, as prediction market companies like Kalshi and Polymarket are also making efforts to enter the crypto derivatives market.

 

Through Kinetic Markets LLC, one of its affiliates, Kalshi recently secured the Futures Commission Merchant license, along with the Designated Contract Market license it already holds, with efforts underway to secure the Derivatives Clearing Organization license, which is the final license required.

 

 

Polymarket, the world’s largest prediction market company, has partnered with blockchain analytics firm Chainalysis to help curb insider trading activities amid its recent move to raise $400 million from investors.

 

The partnership will see Chainalysis deploy several investigative tools, including the Chainalysis Data Solutions tool, a first-of-its-kind on-chain solution designed to monitor trading activity on prediction markets while mapping insider trading patterns and enforcing market integrity rules across the Polymarket platform.

 

 

The prediction market platform will also benefit from Chainalysis’s on-chain security capabilities, which are pivotal in preventing threats, as well as a dedicated team of Chainalysis professionals who will not only help deploy Chainalysis Data Solutions but also train the Polymarket team on how to proactively use the solution to maintain transparency on the platform.

 

The solution to be deployed is also dynamic, meaning Polymarket can continually refine its detection methods to identify and curb insider trading activities, thereby maintaining transparency and protecting the platform from emerging threats.

 

By partnering with and leveraging Chainalysis's institutional expertise, Polymarket is clearly signaling its stance against all types of fraud and market manipulation and that those who attempt to engage in any such activities will be promptly identified and prosecuted.

 

"Polymarket was built on chain because transparency matters, and our platform shows what markets can look like when trades are open, traceable, and accountable by design," said Shayne Coplan, Founder and Chief Executive Officer of Polymarket.

 

"Every market deserves that standard. This partnership with Chainalysis pairs that transparency with the monitoring and enforcement infrastructure to back it up and helps us continue to build the most trusted source of truth in markets."

 

Insider Trading Concerns in Prediction Market Platforms 

Insider trading, which is the illegal practice of leveraging material non-public information (MNPI) or confidential information to gain an edge over other market participants, has long been a problem for prediction market platforms.

 

To curb insider trading, the U.S. Senate unanimously passed a measure banning its members from trading on prediction markets. Most recently, a group of congressional Democrats led by Sen. Jeff Merkley has pressed the Commodity Futures Trading Commission (CFTC), urging the regulator to address the lack of integrity caused by insider trading activities on prediction market platforms.

 

Due to this mounting pressure, Kalshi, Polymarket, and other prediction market platforms have rolled out several restrictions to address these concerns, which is also the main factor behind the Polymarket Chainalysis partnership.

 

 

Bloomberg ETF analyst James Seyffart has revealed in an X post that we may be seeing the first set of prediction market exchange-traded funds (ETFs) hitting the market next week, following a recent SEC filing by New York-based issuer, Roundhill Investment.

 

On the 29th of last month, Roundhill Investment filed a post-effective amendment under Rule 485(b) with the U.S. Securities and Exchange Commission (SEC), setting a new date of May 5 for its previously filed registration statement (Form N1A).

Image credit: sec.gov

 

With this late April filing, Roundhill sets May 5 as the new effective date for the six prediction exchange-traded funds (ETFs) it had initially filed with the SEC on February 13, when it filed for six binary-style ETFs tied to the outcome of U.S. elections.

 

These ETFs included the Democratic President ETF (BLUP) and Republican President ETF (REDP), which are tied to the outcomes of the 2028 U.S. presidential election, the Democratic and Republican Senate ETFs (BLUS and REDS) tied to the 2026 midterms Senate elections, and the Democratic and Republican House ETFs (BLUH and REDH) tied to the 2026 midterms House of Representatives elections.

 

By launching these ETFs tied to the outcome of U.S. elections, Roundhill allows investors to buy shares of these ETFs without having to interact with cryptocurrencies or create accounts with prediction market platforms. However, like other exchange-traded funds, these ETFs are highly risky, with investors potentially benefiting significantly if a target party wins and suffering near total losses if they lose.

 

Other Companies Gear Up for Similar Launch

Roundhill is not the only company to have filed for a prediction market exchange-traded fund. In the same month it made its initial filing, global investment managers Bitwise and GraniteShares also filed for similar exchange-traded funds tied to the outcome of the upcoming United States midterm elections and the 2028 presidential election.

 

Although none of these companies have filed for a post-effective amendment, like Roundhill, Bloomberg analyst James Seyffart said in a post on X that we should expect Bitwise and GraniteShares to make similar filings in the coming days or hours.

 

 

Traditional finance giants Charles Schwab and Citadel Securities have revealed possible intentions to enter the crypto prediction market industry.

 

In a call with investors, Rick Wurster, chief executive of Charles Schwab, said that at some point the institution will likely offer its own prediction markets. According to Wurster, prediction markets were not of “tremendous interest” to Schwab, but he said the sector is one the company will take a hard look at and that it would be relatively straightforward to offer such products.

 

Image credit: CNBC

 

However, if Schwab does decide to enter the prediction markets industry, Wurster said it would steer away from bets in areas such as sports, politics and pop culture, adding that the firm aims to position itself as a partner for building long term wealth.

 

“Prediction markets that are not aligned to that are not something that we want to pursue,” Wurster said. “If you look at the stats on the success of gamblers, they are not strong, and people generally lose money.”

 

Citadel Securities also opened up about the possibility of entering prediction markets in the future. At a recent Semafor conference in Washington, DC, Jim Esposito, president of Citadel Securities, said the company is “absolutely keeping an eye on developments” in prediction markets.

 

Image credit: YouTube

 

Although Esposito said Citadel Securities is not there yet because there is not much liquidity in the prediction markets industry, he added that the market is likely to ramp up and scale, and that there is a possibility of the firm getting involved in the future.

 

However, like Wurster’s position on avoiding sports betting contracts, Esposito said Citadel would avoid offering sports event contracts, but signaled interest in other types of event-based contracts.

 

Why Are Sports Event Contracts Being Avoided?

Based on the statistics, sports event contracts are the largest category of contracts on prediction market platforms. According to a recent report, sports event contracts made up 87 percent, or $9.9 billion, of Kalshi’s March $11.39 billion trading volume. On Polymarket, sports event contracts generated over $120 million in 24-hour trading volume in March.

 

However, despite their potential, Charles Schwab and Citadel Securities have said they would not be offering these contracts. For Schwab, these contracts will be avoided as they do not align with the company's goal of positioning itself as a long-term wealth builder. According to Rick Wurster, the chief executive officer of Charles Schwab, people generally lose money from these contracts. The demand for these contracts is also low among Schwab’s clients.

 

Citadel has described these contracts as having thin liquidity. Regulatory uncertainty is also a concern, as the offering of sports event contracts by prediction market platforms is one of the reasons regulators have raised concerns about Polymarket, Kalshi, and other prediction market companies.

 

 

Prediction market platform Polymarket is reportedly in talks with investors to raise 400 million dollars. If successful, this would place the prediction market company at a valuation of 15 billion dollars, up from its current $9 billion.

 

While there is still no official confirmation from Polymarket regarding this news, the fundraising is expected to drive Polymarket’s growing influence in the expanding prediction market sector, giving it a competitive advantage over its competitors, particularly Kalshi.

 

This move comes a few weeks after Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), invested 600 million dollars into Polymarket. This followed an earlier investment of 1 billion dollars into the prediction market company a few months prior.

 

So far, Polymarket has raised over $2 billion across several fundraising rounds from venture capital firms and investors, including Intercontinental Exchange, Blockchain Capital, Polychain Capital, Dragonfly Capital, Coinbase Ventures, 1789 Capital, Ethereum co founder Vitalik Buterin, Aave founder Stani Kulechov, among several other investors.

 

Prediction Market Firms Grapple With Regulatory Uncertainty

Despite how remarkable the global prediction market sector has grown in recent times, prediction market companies still face several regulatory challenges, ranging from state level lawsuits to nationwide bans.

 

Several U.S. states, including New Jersey, Maryland, Massachusetts, and Arizona, have taken strict regulatory action against prediction market companies, with many state regulators alleging that these companies offer illegal sports event contracts. At least 12 states in the U.S. have filed civil lawsuits against prediction market companies.

 

Outside the U.S., prediction market companies have also faced strict regulatory scrutiny. Just this year alone, about four countries in Europe, Portugal, the Netherlands, Bulgaria, and Hungary, have imposed nationwide bans on Polymarket’s activities.

 

However, despite this harsh regulatory landscape, the global prediction market continues to grow. In the most recent quarter, global trading volume across prediction market companies exceeded $ 26 billion, a 90 percent increase from the previous quarter. This volume, according to the global equity research firm Bernstein, is expected to reach $1 trillion by 2030.

 

 

Hyperliquid's RWA trading just hit a new all time high, with open interest crossing $2.3 billion on its blockchain which says a lot about how much liquidity is actually flowing into real world assets through a decentralized venue. The platform has quietly become a go-to spot for trading, building apps, and launching tokens all in one place, and the RWA growth is starting to grow rapidly. It’s fees are competing with top blockchains and stable coin companies within crypto.

 

 

On March 31, Cointelegraph reported that Ripple Prime expanded its Hyperliquid integration with HIP-3. That means institutions now get seamless on-chain perpetuals on traditional assets like gold, silver, oil, and even compute prices.

 

This is the kind of bridge that allows retail to hedge oil exposure at 3 a.m on a Sunday when traditional futures are closed. The same rails powering crypto perps now handle real-world commodities that move markets worldwide. It's infrastructure that pulls capital on-chain because the UX finally matches what people expect from a modern trading venue.

 

On the prime brokerage side, a traditional S&P futures trade runs through six different entities: prime broker, FCM, CME Clearing, and so on with multiple fee layers, T+1 settlement, financing charges, and all the custody overhead that comes with it. On HIP-3, connect your wallet, post USDC margin, trade the perp, and settle instantly on-chain. One fee, self-custody, the smart contract is the clearinghouse, and the blockchain handles custody. It's making large chunks of what they actually do look pretty unnecessary, once the regulatory picture clears up. 

 

Hyperliquid's terms of service explicitly block US users, and enforce this with IP geoblocking, so if you're in the States you'll hit a wall at app.hyperliquid.xyz. The underlying protocol is fully permissionless since it's non-custodial and requires no KYC, but using it from the US still carries real regulatory risk given the CFTC's jurisdiction over leveraged perps. In February 2026 they launched a $29 million Policy Center in D.C. led by Jake Chervinsky, pushing for regulatory clarity around on-chain derivatives. Until something like the CLARITY Act or formal CFTC guidance moves things forward, the restriction is basically the protocol protecting itself while it keeps running 24/7 for the rest of the world. For US builders and investors, the play is watching that policy push closely because when the rails open, the infrastructure is already battle tested and ready to go.

 

Non-crypto assets on Hyperliquid with HIP-3 markets now cover licensed indices like the S&P 500 and Nasdaq 100, individual equities, commodities, and even compute perps tied to GPU rental rates for H100, H200, and A100 chips through projects like Global Compute Index and Hyperbolic. At peak moments these non-crypto pairs have accounted for up to 45% of total volume, with HIP-3 open interest recently sitting around $1.9 billion.

 

Late last year, Aster looked like it could replace Hyperliquid with BNB Chain speed, incentives, and early buzz that some called the “Hyperliquid killer.” Hyperliquid has pulled ahead in TVL, open interest, fees, and real value returned to holders. Aster remains solid, yet Hyperliquid’s dedicated L1 edge with tighter spreads, deeper books, and consistent performance has widened the gap.

 

 

@CosimoCapital posted a thread making a pretty compelling case for why a future proposal of HIP-4 prediction markets could be a serious unlock. The core problem with most prediction market platforms is thin liquidity and parlays that just don't work because every market is isolated from everything else. Hyperliquid flips that by letting prediction markets tap into the same infrastructure already handling massive perpetuals and commodities volume. "When prediction markets share a unified liquidity pool with perpetual markets," Cosimo wrote, "the parlay math transforms completely." One account, cross-margined across oil perps, equity moves, and event outcomes, all settling instantly. It's not just another betting app. It could end up being "the everything market for global event risk."

 

 

This opens up some genuinely interesting scenarios with macro hedges like "if CPI beats and the Fed holds and BTC closes green," or geopolitical risk desks chaining election outcomes to commodity moves, parametric insurance, treasury automation, you name it. Every multi-leg position multiplies fee events too, so five legs means five burns, which turns HIP-4 volume into structural HYPE supply reduction over time. Hyperliquid is pulling in roughly $700 million in annualized trading fees from its perpetuals and spot markets, and around 97 to 99% of it flows automatically into the Assistance Fund, which runs daily HYPE buybacks on a continuous basis. There's constant structural demand and deflationary pressure on circulating supply whether the market is up, down, or sideways.

 

And yet CEXs still dominate headlines, but Hyperliquid delivers the speed and depth traders love as everything is transparent, on-chain, and runs non-stop. For builders shipping interoperability tools, this is the tool that makes cross-border and cross-asset trading feel native.

 

Hyperliquid is quietly becoming a 24/7 venue where crypto-native capital meets macro and physical assets without intermediaries. The current restriction is more about protecting the protocol long term than anything else, and the policy push happening in DC is very much part of the plan. Once clarity comes, the floodgates will open and give a much needed update to trading.

 

 

Binance, the world’s largest cryptocurrency exchange, has introduced into its wallet application, prediction market, a new feature that allows users to participate in probability-based markets directly from the Binance wallet app. 

 

This feature was made possible through the integration of Predict.fun, an independent decentralized prediction market platform built on the BNB Chain, with Binance explicitly stating the integration of more prediction market platforms into its app in the future. 

 

With the integration of Predict.fun into its wallet app as well as other future prediction market integration, Binance aims to tap into the over $20 billion prediction markets volume, going toe-to-toe with giant prediction market platforms Kalshi and Polymarket which both account for 85–90% of the total global prediction market volume.

 

To encourage the mass adoption and use of this new prediction market feature, Binance is offering a gasless trading experience for all users. Thus, all trading fees incurred will be sponsored and catered for Binance itself, thereby making it very easy for its over 300 million users tap into the growing crypto prediction markets. 

 

Image credit: Binance

 

The Binance prediction market feature will also support market and limit orders, allowing traders execute trades immediately at the current best market price or leave immediately, without delay, as well as allowing traders execute trades at their specified price or even better. 

 

The Current State of Prediction Markets

Crypto prediction markets have grown rapidly in recent times, evolving from a niche segment of the crypto industry into a major sector in global finance. The global monthly trading volume across prediction market platforms has consistently exceeded 20 billion dollars, with last month recording approximately 25.7 billion dollars in trading volume.

 

Despite the high monthly trading volume and the growing number of unique crypto wallets actively trading across different platforms, prediction market companies have faced several regulatory challenges. This is especially true for the two largest platforms, Kalshi and Polymarket, whose trading volumes together account for about 92 to 93 percent of global prediction market activity.

 

Although the Commodity Futures Trading Commission, the federal regulator in the United States, has recently moved to defend prediction market companies from strict regulatory actions imposed by several states, the activities of these companies remain restricted in at least 11 states.

 

The services of Polymarket remain blocked in about 33 countries, while Kalshi is restricted in about 50 jurisdictions, although it is still available in roughly 140 countries.

 

 

Polymarket just announced what it is calling the biggest infrastructure change in its history. The on-chain prediction market platform is rolling out a rebuilt trading engine, a new smart contract architecture, and its own stablecoin, Polymarket USD, over the next two to three weeks. Whether you follow prediction markets closely or just heard about Polymarket during the last election cycle, this is a huge shift on how the protocol operates.

 

A New Stablecoin Built for the Platform

The centerpiece of the upgrade is Polymarket USD, a new collateral token that will replace the platform's current use of USDC.e. If you're not familiar, USDC.e is a bridged version of Circle's USDC stablecoin. It works fine, mostly, but it relies on cross-chain bridge infrastructure to exist on Polygon, which adds friction and a layer of risk that a platform handling this much trading volume probably shouldn't be comfortable with.

 

Polymarket USD will be backed 1:1 with Circle's native USDC, giving the company direct control over its settlement infrastructure for the first time. That's a bigger deal than it sounds. Control over your own collateral token means tighter liquidity management, more predictable settlement, and a foundation for whatever the company wants to build next.

 

For most regular users, the transition is supposed to be seamless. The platform's frontend will handle the conversion automatically with a one-time approval. Advanced users and developers running bots or API integrations are a different story. Those folks will need to update their SDKs and manually call a wrap function on the new Collateral Onramp contract to convert funds into Polymarket USD. The team says it will give at least a week's advance notice before any order book cancellations happen.

 

The Exchange Itself Is Getting a Full Rebuild

Beyond the stablecoin, Polymarket is launching CTF Exchange V2, a redesigned matching engine that processes orders faster and at lower gas costs. The updated Central Limit Order Book blends off-chain order placement with on-chain settlement.. The new order structure trims should reduce complexity for developers and improve execution across the board.

 

One notable addition is EIP-1271 support, which lets smart contract wallets, such as multi-signature wallets, interact with the platform directly without needing intermediaries.

 

The POLY Token Question

The announcement has predictably reignited speculation about POLY, Polymarket's long-rumored native governance token. The platform's chief marketing officer confirmed back in October 2025 that a POLY airdrop is in the works, contingent on completing a strong U.S. relaunch. But Monday's announcement makes no mention of POLY at all, and ironically... the odds on Polymarket itself currently put the chance of a POLY launch before May at just 11%

 

The speculation isn't really unfounded. Polymarket has historically relied on UMA's optimistic oracle system to resolve market outcomes, a setup where token holders vote to settle disputes. That system has faced criticism, particularly during geopolitically sensitive markets, where large token holders can exert outsized influence. A native governance token could eventually allow Polymarket to bring dispute resolution in-house, separating trading activity from outcome validation. Whether that's still  the plan remains unclear.

 

What's Next For Polymarket

The company, founded in 2020, is reportedly seeking a new funding round at a valuation near $20 billion. Last month, Intercontinental Exchange, the parent company of the New York Stock Exchange, made a $600 million direct cash investment in the platform. That type of institutional backing puts a lot of pressure on the infrastructure to perform like a proper exchange.

 

Polymarket also registered with the Commodity Futures Trading Commission in July 2025 after shutting down U.S. operations in 2022. An invite-only U.S. version of the platform has since launched under a regulatory no-action letter. The migration to a CFTC-registered model, combined with building settlement infrastructure around a regulated stablecoin issuer like Circle, is consistent with a company that wants to operate in the U.S. long-term, not just avoid regulators.

 

The rollout is expected to happen over the next two to three weeks. But there are some real risks here: any smart contract migration carries execution risk, and there could be liquidity fragmentation as traders straddle two collateral systems during the transition window. Whether Polymarket USD will face third-party reserve audits comparable to what Circle applies to native USDC is also an open question.

 

Still, if the upgrade goes smoothly, Polymarket will emerge with a cleaner technical foundation, lower transaction costs, and better tools for institutional participants. All of that should translate into significantly higher trading volume and a broader institutional footprint. But these next few weeks should tell us a lot.