Prediction markets recorded $25.7 billion in notional volume in March 2026, the second-largest month on record and a near 13-fold increase from $2 billion in March 2025, according to Dune-aggregated data published by The Block and DefiRate. Kalshi captured roughly $13.07 billion of that total acr...
Prediction markets recorded $25.7 billion in notional volume in March 2026, the second-largest month on record and a near 13-fold increase from $2 billion in March 2025, according to Dune-aggregated data published by The Block and DefiRate. Kalshi captured roughly $13.07 billion of that total across 88.4 million transactions; Polymarket recorded $10.57 billion across 115.4 million transactions. January 2026 set the all-time record at $26.75 billion. April month-to-date volume stood at $3.9 billion as of the second week of the month.
The volume has translated into private-market valuations that approach those of mid-tier US equity exchanges. Kalshi closed a $1 billion round led by Coatue Management at a $22 billion post-money valuation in March 2026, doubling its $11 billion mark from December 2025. Polymarket, valued at $9 billion in October 2025 after Intercontinental Exchange committed up to $2 billion, is in talks to raise at a comparable $20 billion level.
On April 6, 2026, Polymarket announced its largest infrastructure overhaul since launch: a rebuilt CTF Exchange V2 matching engine, new smart contracts with EIP-1271 support for account abstraction, and a native 1:1 USDC-backed collateral token, Polymarket USD, replacing bridged USDC.e on Polygon. The rollout is scheduled to complete within two to three weeks. The move shifts the platform's collateral economics from a third-party bridge to in-house issuance, capturing the float that had previously sat with Circle's bridged stablecoin distribution.
The $25.7 billion March print is concentrated. Kalshi and Polymarket together represent more than 90% of measurable notional flow across the eight to ten venues tracked by DefiRate's prediction-market dashboard. Newer entrants — Limitless, Opinion, Overtime, Predict.fun, and Crypto.com's prediction product — collectively account for the remainder.
The composition of flow differs sharply between the two leaders. Polymarket's transaction count of 115.4 million exceeded Kalshi's 88.4 million, but its notional volume was $2.5 billion lower, implying a smaller average ticket size. Polymarket's flow is dominated by political contracts, followed by crypto, sports and global events. Kalshi's mix is weighted toward economics and financials — CPI prints, Fed decisions, employment reports — with politics secondary.
Weekly volume in February 2026 ran at approximately $2.59 billion for Kalshi and $1.82 billion for Polymarket, according to QuantVPS data. Kalshi's market share that month was 52.6% of combined K+P flow, expanding to 55.3% in March. The trend through Q1 has been a gradual erosion of Polymarket's lead, attributed to Kalshi's CFTC-licensed status, US dollar onramps, and its dominance in financial event contracts that institutional desks find easier to price than political binary outcomes.
For context, the $25.7 billion March figure is roughly 1.5x the average monthly notional volume on the entire onchain perpetual DEX sector during the same period. Prediction markets, which barely registered as a measurable category in early 2025, are now a comparable size to a meaningful slice of crypto-native derivatives.
Kalshi's $1 billion Series at a $22 billion post-money valuation, led by Coatue Management and announced March 20, 2026, prices the company at roughly 14 times trailing annualized notional volume if March is annualized. The previous round, also $1 billion, closed at $11 billion post-money in December 2025. The doubling in three months tracks the volume acceleration but compresses the implied take-rate multiple meaningfully.
Polymarket's last priced round in October 2025 valued the company at $9 billion after Intercontinental Exchange — parent of the New York Stock Exchange — agreed to invest up to $2 billion. Reporting from The Wall Street Journal and Coindesk indicates Polymarket is in active fundraising at a target near $20 billion. If completed at that level, Polymarket would also trade at roughly 13–15 times annualized notional volume, assuming run-rate consistency.
A separate signal of capital alignment came on March 23, 2026, when early Kalshi employees raised $35 million for 5cc Capital, a venture fund focused exclusively on prediction-market infrastructure. The fund is backed by both Tarek Mansour, Kalshi's CEO, and Shayne Coplan, Polymarket's CEO — an unusual arrangement given that the two companies are direct competitors. The fund's existence indicates that operators expect a multi-platform ecosystem with adjacent infrastructure layers — oracles, market-making engines, dispute resolution services, regulated wrappers — to absorb capital independently of the two main venues.
Polymarket's April 6 announcement covers four interlocking components.
CTF Exchange V2. The rebuilt matching engine reduces the operations required to validate and pair orders, lowering gas consumption per trade. Polymarket published no specific gas-reduction figure but characterized the change as enabling higher throughput at lower cost. The new contract introduces a simplified order struct and improved fee collection logic.
EIP-1271 and account abstraction. The new smart contracts support EIP-1271 signature validation, which allows smart contract wallets to sign orders directly. This is the technical prerequisite for full account-abstraction integration — passkey logins, gasless transactions, and embedded wallets — that Polymarket has signaled it will roll out for its US-regulated app later in 2026.
Builder codes. The exchange now supports onchain order attribution to the front-end or routing layer that originated a trade. This is the same primitive Hyperliquid uses to pay rebates to integrators such as Phantom and OKX wallets. For Polymarket, builder codes create a fee-sharing mechanism that could pull integration partners away from Kalshi's traditional broker model.
Polymarket USD. The most economically significant change. Polymarket USD replaces bridged USDC.e — the Polygon-bridged Circle stablecoin used since 2021 — with a native 1:1 USDC-backed wrapper issued directly by Polymarket. Functionally similar to a wrapped stablecoin, but the issuer is the platform itself. The wrap is one-time and frontend-managed; users do not need to migrate funds manually.
The Polymarket USD design captures three forms of value previously distributed elsewhere. First, it removes dependence on Circle's bridge infrastructure and eliminates a counterparty layer. Second, the float associated with the wrap can be invested by Polymarket in short-duration instruments — a yield mechanism Tether and Circle have used to generate billions in interest income. Third, it gives Polymarket sovereignty over collateral parameters that previously required negotiation with Circle. For a platform processing $10 billion in monthly notional, the float economics are non-trivial. At 4% short-rate yield on even a $300–500 million average wrapped balance, the implied annualized interest income is $12–20 million. Polymarket has not disclosed a target reserve composition or yield-distribution policy.
The economic flow in a prediction-market trade differs from a spot crypto exchange. On Polymarket, fees are zero for limit orders and applied to market-takers via spread, with the platform capturing the difference between matched bids and asks. Kalshi charges trading fees and settlement fees explicitly, with retail tickets often facing higher per-contract economics.
Estimated annualized revenue, derived from public take-rate proxies and notional volume:
These figures should be treated as upper-bound estimates. Both companies are private and have not disclosed audited revenue. The take-rate assumptions are derived from comparable centralized derivatives venues and from secondary reporting, not from primary financial statements.
A useful framing comes from the webthreepedia economic-value thesis: prediction markets are one of the few onchain segments where measurable end-user fees are large enough to support the underlying validator and infrastructure stack without subsidies. Polymarket's fees flow through Polygon, where they contribute to MATIC validator economics; Kalshi's fees stay within a US-regulated CFTC perimeter and do not touch onchain validator economies at all. The bifurcation matters: Kalshi's growth produces no direct subsidy reduction for any blockchain network. Polymarket's does, marginally.
Kalshi has operated in the United States under Commodity Futures Trading Commission registration since 2020 as a Designated Contract Market. Polymarket was excluded from the US market in 2022 after a CFTC enforcement action found it offered event contracts without registration. In 2025, the CFTC reversed course and granted Polymarket approval to operate in the US under a regulated entity structure. Polymarket has stated it will release a domestically regulated app in 2026.
The regulatory parity removes Kalshi's structural advantage in US dollar onramps. The competitive question for the next 12 months is whether Kalshi's lead in CPI, NFP, and FOMC contracts — products that require institutional-grade settlement reliability and documented compliance — can be replicated by Polymarket inside its US-regulated wrapper.
Both platforms now face the same federal oversight. The differentiator becomes product breadth, settlement quality, and integration with existing trading infrastructure. Kalshi has integrated with Robinhood and several retail brokers; Polymarket has so far relied on its own front-end and onchain wallet flows. The builder-code mechanism in CTF Exchange V2 is Polymarket's first explicit move toward broker integration.
In March 2026, Coplan said in interviews and at the MIT Sloan Sports Analytics Conference that war-related contracts on Polymarket — including markets on Iran-related conflicts and Middle East ceasefires — were drawing increasing user pushback. He cited messages from users in the region who described checking Polymarket prices when deciding whether to sleep near bomb shelters. Coplan said the problem was reputational rather than financial, arguing that "not all markets are equal" and that the platform's social license depends on the perceived informational value of its contracts.
The framing matters because prediction markets defend their existence on informational grounds: liquid, real-money markets aggregate dispersed beliefs more accurately than polls or surveys. The extension of that defense to mortality-adjacent contracts is contested and produces regulatory and political risk that does not affect Kalshi's largely economic and financial product mix.
Prediction markets crossed the threshold from crypto-native curiosity to measurable financial infrastructure during Q1 2026. The combined Kalshi-Polymarket run-rate notional volume now exceeds $300 billion annualized, comparable to mid-tier futures contracts on regulated US exchanges. Private valuations have followed: $22 billion confirmed for Kalshi, $20 billion targeted for Polymarket.
The Polymarket exchange rebuild and Polymarket USD launch are the platform's response to a structural disadvantage against Kalshi's regulated US distribution. By internalizing collateral issuance, Polymarket recaptures float economics previously distributed to Circle and gains the technical foundation — EIP-1271, builder codes, account abstraction — to compete on integration depth rather than token-incentive depth.
The economic-value distribution remains heavily skewed toward the two leaders. Onchain validator economies capture a marginal share through Polygon gas fees on Polymarket flow; the larger share of Kalshi's revenue stays inside a US-regulated, off-chain perimeter that does not reduce blockchain subsidy dependence. Whether prediction markets ultimately become a meaningful subsidy-reduction mechanism for blockchain networks depends on how much of the next 10x of growth occurs onchain versus inside regulated CFTC venues. The current trajectory favors the latter.