DeFi project Gondor has raised a new $2.5 million pre-seed round in December 2025, adding fresh momentum to its push to become the core lending layer for on-chain prediction markets.

The round included participation from Prelude, Castle Island Ventures, and Maven11, with continued backing from the Polymarket ecosystem.

The raise is tied closely to Gondor’s next big step: the launch of its public beta.

Gondor, along with the clear interest in its product, shows prediction markets are moving beyond simple betting apps – and now need real financial infrastructure underneath them.

Prediction market capital is locked and idle

Right now, prediction markets like Polymarket suffer from a basic inefficiency. 

That is, once you place a bet, your capital is stuck until the market resolves – and sometimes that’s for several months. That capital can’t be traded, lent, reinvested, or used as collateral. It just sits there.

Gondor fixes that by letting traders borrow $USDC stablecoins against their open Polymarket positions. You deposit your active “Yes” or “No” shares into Gondor, and the protocol lets you take out a loan while keeping your original exposure intact.

In a nutshell, prediction positions stop being dead capital, and start behaving like real financial assets.

2x leverage comes to Polymarket next week

With its beta launch, Gondor is introducing up to 2x leverage through a simple looping strategy. 

Traders can borrow against their position and redeploy that capital into a second position, effectively doubling exposure without adding new funds.

This kind of leverage is completely new to prediction markets. Until now, traders had to either close positions or bring in outside capital to scale. Gondor gets rid of that limitation.

The team has already hinted at pushing leverage higher – to as much as 4x to 5x in 2026 – once liquidity and risk systems are proven in production.

Beyond just “trading”

Gondor’s product isn’t just about leverage for trading. It’s about turning prediction markets into a real on-chain asset class.

Earlier this year, Ethereum founder Vitalik Buterin pointed out that prediction markets are unattractive for serious hedging because they generate no yield. 

While Gondor doesn’t directly add yield to positions, it adds the tools that make yield possible down the line – collateralization, lending, leverage, and eventually structured financial products.

That’s why Gondor frames itself as the Aave of prediction markets. 

It doesn’t compete with Polymarket – it sits as a platform on top of it, powering liquidity and capital flow the same way lending protocols power DeFi today.

Leverage is risky business

As all crypto traders are aware, adding leverage to prediction markets will also add real risk – and that risk isn’t isolated to just individual users. 

If the value of a position drops far enough, it can be liquidated. If too many leveraged positions unwind at once, it could cause sharp, fast-moving cascades in thin markets.

Gondor is trying to manage this by starting with conservative borrowing limits and only supporting high-liquidity markets during beta.

It is still in its very early stages. The protocol is just entering beta, and real stress testing hasn’t happened yet, but this is a live attempt to build the missing financial layer for on-chain prediction markets.

Whether Gondor becomes that layer is still an open question. But with fresh capital secured and its beta now live, it’s officially one of the most important experiments happening in the prediction market space right now.

The federally-regulated prediction market is rolling out tokenized versions of its event contracts on Solana, enabling traders to buy and sell their Kalshi positions – just like any other on-chain asset. 

The move looks like a direct swing at Polymarket, which until now has owned the lion’s share of on-chain prediction market traffic.

Why this matters

These tokens mirror the exact same payouts as the regular, off-chain contracts on Kalshi – the key difference is now they’re tokenized and can move freely throughout the Solana ecosystem.

This provides Kalshi users with:

• More anonymity: Instead of trading only inside Kalshi’s garden walls, you can hold and swap tokenized versions on-chain.
• Greater accessibility: Anyone plugged into the Solana ecosystem – DEXes, wallets, and frontends – can trade them.
• Improved decentralization: Crypto users now get self-custody, open liquidity, and permissionless trading – without giving up Kalshi’s regulated backbone.

Its Solana support is already live, with DFlow and Jupiter already plugged in as the first platforms bridging Kalshi’s off-chain orderbook to Solana liquidity.

Eating Polymarket’s lunch

It’s no secret that crypto traders are already power users of prediction markets.

They typically drive large position sizes, churn out significant volume, and are obviously bigtime proponents of self-custody and privacy. 

Until now, Polymarket has owned that crowd, by being fully on-chain from the beginning.

But Kalshi’s move is likely to take a bite out of that Polymarket pie, bridging its federally-approved platform to the on-chain world.

The timing couldn’t be better, as prediction markets cross $28 billion in cumulative volume this year. 

Kalshi itself has been on a tear, including thousands of new betting contract markets, rapid global expansion, and a fresh $1 billion raise at a whopping $11 billion valuation.

Any growth from its on-chain presence will likely only compound that growth further.

Liquidity is the whole game

Kalshi’s head of crypto, John Wang, has a very straightforward view on liquidity:

“If you don’t have liquidity, you don’t have a market.”

Tapping into the $3 trillion crypto market opens the floodgates to the kind of liquidity Kalshi needs to stay competitive – especially as Polymarket comes around to relaunching in the US. 

More liquidity means tighter spreads, more accurate pricing, and the ability for large players to size in without severely impacting the order books.

What does this mean going forward?

Prediction markets look like they’re entering a new era. 

Regulated platforms like Kalshi are realizing they can’t ignore the pull of on-chain liquidity, while fully on-chain platforms like Polymarket push hard for mainstream adoption and user growth. 

Traders, on the other hand, just want the best of both worlds: deeper liquidity, tighter spreads, more anonymity, and smoother UX. 

Kalshi’s move to tokenize its contracts on Solana sits right at that intersection. 

Crypto-native users get the privacy and permissionless access they’re used to, without abandoning the regulatory clarity that Kalshi has fought years to secure. 

If Kalshi can keep expanding its markets and nail the on-chain integration, this could be the first prediction platform that is both legally clean and genuinely crypto-native.

Not just bridging two ecosystems, but blending them into something entirely new.

Crypto.com is partnering with Hollywood.com to launch an entertainment-based prediction market that will facilitate trades related to films, TV shows, music, awards shows, Broadway shows and more.   

The event contracts will be offered through Crypto.com’s CFTC-registered exchange and clearing house and available on Hollywood.com, an entertainment news site.

In the press release announcing the partnership, Crypto.com Managing Director of Global Head of Capital Markets Travis McGhee and Hollywood.com co-CEO Mitchell Rubenstein both speak of the passion of entertainment fans and the burgeoning popularity of prediction markets.

“Entertainment fans are some of the most passionate consumers and we look forward to providing them a new, legal prediction market specifically tailored to them through a trusted platform,” McGhee says in the statement.

Rubinstein boasts of “launching the first prediction platform dedicated entirely to movies, TV, video gaming, Broadway, pop culture, and celebrities” and “creating an entirely new way for fans to engage with the content they’re passionate about.”

Entertainment’s place in prediction markets

Press release hyperbole notwithstanding, entertainment-based event contracts are not exactly revolutionary. Betting on awards shows like the Oscars is allowed on several legal sports betting states, and there are dozens of entertainment markets on Kalshi and Polymarket.

On Kalshi, for example, participants can bet on:

• Top artist on Spotify this year
• “Predator: Badlands” Rotten Tomato score
• Oscar for Best Picture

And here’s a small sampling from Polymarket:      

• What will be the top global Netflix show this week?
• Highest grossing movie in 2025?
• Next James Bond actor

While sports accounts for the bulk of the trading volume on prediction markets, it’s clear the major players in the space are recognizing the potential in other verticals.

As we write this on Tuesday, Nov. 4, the day elections are being held around the U.S., politics dominate the top markets by volume on both Kalshi and Polymarket.

But prediction markets are feeling plenty of legal heat for offering sports event contracts, and allowing trading on elections was central to Polymarket’s expulsion from the US in 2022.

While it’s questionable whether entertainment can have as big an impact, prediction markets are likely to face less regulatory pushback against entertainment than sports or politics, enhancing the opportunity.

Crypto.com continues to make prediction market inroads

Kalshi has established early dominance, Polymarket looms as a US re-entrant, and FanDuel and DraftKings are teaming up with CFTC-approved exchanges. Crypto.com, though, is a company to watch as prediction markets ascend.

The digital currency exchange partnered with Underdog to offer sports event contracts in 16 states where sports betting is not legal.

More recently, Crypto.com announced a deal with Trump Media to launch Truth Predict, a prediction market that will be offered through Truth Social.

With its new Hollywood.com deal, Crypto.com now has partners in three key prediction market domains.

This has been percolating for a few months, but DraftKings is getting into prediction markets.

News of the sports betting operator’s interest in acquiring Railbird Exchange, a CFTC-approved Designated Contract Market, broke in July. On Tuesday, Oct. 21, the acquisition became official.

In the press release announcing the deal, DraftKings says the acquisition of Railbird Technologies and its subsidiary Railbird Exchange “supports DraftKings’ broader strategy to enter prediction markets, expanding its addressable opportunity through regulated event contracts.”

There is no mention of “sports” in the release.

DraftKings does say it plans to launch a new mobile app, called DraftKings Predictions, a platform to trade “real-world outcomes spanning, finance, culture, and entertainment,” and potentially “additional categories over time,” seemingly keeping the door open for sports.

“We are excited about the additional opportunity that prediction markets could represent for our business,” DraftKings CEO Jason Robins said.

FanDuel, DraftKings’ primary competitor in the state-regulated sports betting space, also has designs on prediction markets, via its partnership with CME Group. News broke last week that CME Group plans to offer financial contracts tied to sports events and economic indicators through futures commission merchants, including one it is forming with FanDuel.

How much is DraftKings paying to acquire Railbird?

While financial details of the deal have not been publicly disclosed, DraftKings is paying $50 million up front to buy Railbird, plus potentially $200 million more based on incentives, Front Office Sports reported on Thursday.

The EKG Line writes in its Friday newsletter, “We believe the deal was heavily structured to reflect the regulatory risk of prediction markets, with an upfront payment but plenty of earn outs and add-ons to take the potential valuation well north of $100mm if things go well.”

Meanwhile, Polymarket CEO Shayne Coplan said on his social feeds that Polymarket Clearing will serve as DraftKings’ designated clearinghouse in the prediction market space.

Will DraftKings Offer Sports Event Contracts?

While “sports” is conspicuously absent from the announcement, there’s a good chance DraftKings’ core competency is on the road map.

DraftKings and FanDuel must tread carefully, however. Multiple states have warned sports betting licensees that they face serious regulatory consequences, including revocation of their licenses, if they get involved with prediction markets.

“Operators care about their license, and once you get a license stripped in one state, it has deleterious effect in other states,” gambling attorney and lobbyist Bill Pascrell III told DiFiRate last week.

Prediction markets are regulated under the CFTC, but according to many states, the companies are operating as illegal sportsbooks.

Opportunity for sportsbook operators could lie in states where sports betting is not legal, California and Texas among them.

Kalshi, a leading prediction market, offers sports event contract in all 50 states, and Polymarket’s US re-entry is imminent (likely once the government shutdown ends).

There’s a divide in terms of how digital-first sportsbook operators and traditional gambling companies are approaching prediction markets. While DraftKings and FanDuel are diving in, BetMGM, for example, maintains it has no plans to engage in the space.

Pascrell believes courts will ultimately decide that prediction markets can offer sports contracts, but until then, sports betting operators should be cautious.

“I think it’s a really bad look” for operators to offer what states consider illegal, he said, “and it’s gonna agitate a lot of folks.”

Stock market likes the move

The stock market appears to be bullish on prediction markets.

Shares of DraftKings spiked upon yesterday’s news of the Railbird acquisition.

That’s in contrast to the market’s negative reaction to recent news of Kalshi rolling out same-game parlays – a key profit driver and differentiator for sportsbooks – as well as Intercontinental Exchange’s $2 billion investment in Polymarket.

This post has been updated since it was originally published.

Investment keeps flowing into prediction markets.

Kalshi announced today, Friday, Oct. 10, that it has “recently raised” $300 million at a valuation of $5 billion, a figure consistent with earlier reports.

The funding round was led by VC firms Sequoia and Andreessen Horowitz, with crypto investment firms Paradigm and Coinbase Ventures and several other investment firms also participating. Kalshi CEO Tarek Mansur also mentioned actor/comedian Kevin Hart, NBA star Kevin Durant, and Durant’s business partner Rich Kleiman as new investors.

Additionally, Kalshi revealed it has expanded beyond the US, going live in more than 140 countries, a move that deepens liquidity on the prediction market.

The announcements come on the heels of news earlier this week that Intercontinental Exchange, owner of the New York Stock Exchange, is investing up to $2 billion in Polymarket, Kalshi’s primary competitor, at a valuation of around $8 billion.

The importance of global liquidity

Insufficient liquidity is a potential shortcoming of prediction markets – for a trade to work, there has to be a buyer and seller. If there are too many sellers and not enough buyers, users flee and volume suffers.

Kalshi’s global expansion figures to have a massive positive impact on liquidity, and the disclosure of the company’s presence in dozens of countries around the world is even more significant than the $300 million financial injection, insiders believe.

Here’s pro trader and publisher of the 50¢ Dollars newsletter Adhi Rajaprabhakaran on X:

“Order flow from the UK and Australia, the two most sports-betting-pilled countries in the world, mixing in the same liquidity pool and order book

“or think of India, whose equity options volume makes up 80% of the global market. …

“hard to overstate how huge this is.”

Taking on Polymarket

While these recent investments value Polymarket as substantially larger than Kalshi, Polymarket’s dominance isn’t quite so pronounced.

Kalshi, in fact, has surpassed Polymarket in weekly trading volume, boosted by its US presence during football season while Polymarket is still not fully live in this country.

And Kalshi is foraying into two areas in which Polymarket has had decisive advantages — global presence and crypto.

In terms of the latter, while Polymarket is a crypto-based platform and Kalshi is fiat-first, Kalshi has bigger plans for the blockchain, with Head of Crypto John Wang calling it the “next phase of Kalshi’s growth.”

Kalshi also now appears to be a player on the world stage, one on which Polymarket has traditionally starred.

Kalshi’s impressive growth

About $872 million was traded on Kalshi last week, its all-time high, and the company projects $50 billion in annualized volume, a colossal increase from around $300 million last year. Kalshi owns about 60% of the global market.

“We have not expected this level of growth,” Mansour told the New York Times.

Polymarket’s US relaunch, though, could slow Kalshi’s growth.

“Kalshi’s annualised trading volume is unlikely to be at that level when Polymarket officially launches in the US,” Sporting Crypto’s Pet Berisha writes on LinkedIn. “That being said, they have so far moved faster than the onchain prediction market.”

Prediction markets may be in a precarious regulatory situation, but that’s not stopping the companies from attracting major financial investments.

Polymarket announced today that Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, is making a strategic investment of up to $2 billion in the crypto-centric prediction market at a valuation of $8 billion.

“Alongside its investment, ICE will become a global distributor of Polymarket’s event-driven data, providing customers with sentiment indicators on topics of market relevance,” the joint press release announcing the deal says. “Additionally, ICE and Polymarket have also agreed to partner on future tokenization initiatives.”

The deal was first reported by the Wall Street Journal’s Lauren Thomas.

Timing of the deal

ICE’s investment comes as Polymarket readies its return to the US. Some industry observers have deduced that the federal government’s shutdown is delaying the company’s re-entry.

Wrote InGame’s Daniel O’Boyle, “Polymarket will not be able to offer its prediction markets in the U.S. until a government shutdown comes to an end if past precedent is anything to go by.”

The company has not been legally able to operate in the country since January 2022, although it’s widely accepted that US users have still been able to find their way onto the platform.

Polymarket vs. Kalshi

As Polymarket chomps at the bit to return to the US, Kalshi – its primary competitor – has been eating up market share during the early weeks of football season.

In fact, we reported here yesterday that Kalshi has surpassed Polymarket in weekly trading volume, despite the US being the only country in which it’s live.

In the week ending Sunday, Kalshi saw a record $871.8 million in trading volume on its platform, around 80% from sports, compared to $411.6 million for Polymarket.

While a $185 million funding round in June led by Paradigm, a venture-capital firm specializing in crypto, valued Kalshi at $2 billion, a recent report said the company is in talks for investment at a nearly $5 billion valuation.

Sports and the regulatory landscape

The Wall Street Journal’s Thomas chose an interesting word when writing today that Intercontinental Exchange’s investment in Polymarket “could enhance the betting platform’s credibility and aid its efforts to re-establish a U.S. presence.”

Prediction markets tend to avoid terminology like “betting” and “gambling” in front of regulators; when it comes to marketing their products to a sports-thirsty US audience, they put such terms front-and-center.

To most gambling industry observers, sports betting is precisely what Polymarket, Kalshi, and others are offering, albeit in a slightly different from than traditional sportsbooks.

This dynamic muddies the legal and regulatory outlook for prediction markets.

For now, they have the blessing of the Commodity Futures Trading Commission, but they’re dealing with pushback from a critical mass of states and Native American tribes, which contend prediction markets are operating as illegal sportsbooks.

Kalshi scored early wins in the courtroom, but recent rulings have chipped away at the company’s legal armor.

Prediction markets, meanwhile, are benefiting from the amenability of the Trump White House. Donald Trump Jr. joined Kalshi as a strategic advisor exactly a week before his father’s inauguration, and while Brian Quintenz’s nomination as the head of the CFTC has been withdrawn, you can bet the new nominee will be just as accommodating toward prediction markets.

Despite massive investment portending a bullish outlook, plenty are dubious about the future of prediction markets, as legal heat is turned up and the possibility of a Democratic administration in three years looms.