Kalshi is a United States-based financial exchange and prediction market that allows users to trade on the outcomes of future real-world events. The platform operates as a Designated Contract Market regulated by the Commodity Futures Trading Commission (CFTC) and offers "event contracts" as a distinct asset class for speculation and hedging.

Overview

Launched in 2021, Kalshi provides a platform where individuals and entities can buy and sell contracts tied to the resolution of specific, verifiable events across categories such as politics, finance, sports, and culture. The platform's core product, the event contract, is a type of commodity derivative structured as a swap whose payout is determined by a binary (Yes/No) outcome. This mechanism is designed to create a direct financial instrument for expressing a belief about a future event and to generate a real-time, market-driven probability of that event occurring. The model is a practical application of economist Friedrich Hayek's concept of markets as information systems, which posits that markets can effectively aggregate vast amounts of dispersed knowledge into actionable price signals. ^{[1] [11] [13]}

Kalshi positions itself as a tool for both precise hedging against event-specific risks and for speculation. For example, instead of trading broader financial instruments that bundle multiple exposures, a user can trade a contract directly tied to a single outcome, such as a Federal Reserve interest rate decision or the passage of a specific piece of legislation. The platform gained significant market traction following a key legal victory in 2025 that affirmed its ability to list contracts on U.S. political elections, a decision that contributed to its rapid growth in the prediction market sector. In late 2025, the company initiated a strategic expansion into the cryptocurrency space, aiming to integrate its regulated market infrastructure with various blockchain ecosystems. ^{[3] [1]}

History

Kalshi was launched in 2021 as a regulated prediction market. In 2023, the company filed a lawsuit against its regulator, the Commodity Futures Trading Commission (CFTC), to challenge the agency's decision to block the listing of event contracts related to the outcomes of U.S. political elections. ^{[3] [4]}

The platform experienced a surge in activity around the 2024 U.S. elections. In September 2024, the CFTC filed an enforcement action against Kalshi, but a U.S. court ruled in the company's favor in October 2024, permitting it to offer political event contracts. This legal battle concluded in May 2025 when the CFTC filed a motion to drop its appeal, a move that Kalshi stated secured the future of election-based markets on its platform. ^{[11] [10]}

Following this regulatory clarification, Kalshi focused on expansion. In April 2025, it began accepting Bitcoin (BTC) deposits, and in May 2025, it added support for Solana (SOL). In June 2025, the company closed a $185 million Series C funding round at an approximate valuation of $2 billion. Strategic initiatives continued throughout the year, including the integration of the AI bot Grok in July 2025 and the hiring of crypto influencer John Wang as its first Head of Crypto in August 2025 to lead its on-chain expansion. In September 2025, Kalshi announced a partnership with the Solana and Base blockchains to launch a grant program for developers. ^{[11] [12] [10]}

In October 2025, venture capital firm Andreessen Horowitz (a16z) announced its investment in Kalshi, citing the platform's potential to bring prediction markets into the mainstream. Concurrently, Kalshi announced plans to expand its services globally to 140 countries. ^[13]

Technology and Platform Features

Kalshi's platform is built around the concept of event contracts, which function as the core trading instrument. It also provides a range of features for account management, trading, and developer access. ^[7]

Event Contracts

The primary product offered on the exchange is the event contract, which has several key characteristics:

• Structure: Most contracts are based on a binary "Yes" or "No" question about a future event (e.g., "Will the Fed raise interest rates in October?").
• Pricing as Probability: Contract prices are determined by an order book and range from 1¢ to 99¢. The price of a contract at any given time reflects the market's perceived probability of that outcome occurring. A "Yes" contract priced at 70¢ implies a 70% chance the event will happen.
• Payout: At the time of the event's resolution, contracts for the correct outcome settle at $1.00 (100¢) each, while contracts for the incorrect outcome expire worthless at $0.
• Trading: Users can buy and sell contracts at any point before the market closes, with prices fluctuating based on supply, demand, and new information.
• Legal Classification: These contracts are legally classified as commodity derivatives in the form of swaps and are regulated by the CFTC.

This structure allows users to trade on isolated outcomes, which differs from traditional financial instruments like stocks that represent a bundle of various risks and factors. ^{[8] [1]}

Platform Functionality

The Kalshi exchange provides tools and features for a range of users, from individuals to institutional entities.

• Account Management: The platform supports both individual and entity accounts and requires email and phone verification for onboarding. Security features include two-factor authentication (2FA).
• Funding and Withdrawals: Accounts can be funded via bank transfer (ACH), debit card, wire transfer, and cryptocurrency wallet. Withdrawals are available through the same methods.
• Order Types: Users can place quick orders for immediate execution or use limit orders to specify a desired price for buying or selling contracts.
• User Tools: Kalshi offers a demo account for practice, an "Ideas Feed" for users to suggest new markets, and responsible risk management tools, including options for trading breaks and personalized funding caps.
• API Access: A public API is available for all traders, allowing for programmatic trading, data access, and the development of third-party tools. The platform does not impose pattern day-trading restrictions.

The platform also runs formal incentive programs, including a Market Maker Program and a Volume Incentive Program, to encourage liquidity and high-volume trading. ^{[7] [1]}

Market Categories

Kalshi offers a diverse range of markets, with some of the highest trading volumes concentrated in politics, sports, and finance. As of October 2025, active categories included:

• Politics & World Affairs: U.S. presidential and mayoral elections, government shutdowns, and international events like the Nobel Peace Prize.
• Sports: Championships for professional and college leagues (NFL, MLB, NCAA), individual game outcomes, and player awards like the MVP.
• Culture & Entertainment: Music chart performance (e.g., Taylor Swift's Billboard rankings), film award outcomes (Oscars), and television viewership.
• Economics & Financials: Federal Reserve interest rate decisions, S&P 500 price movements, and government deficit figures.
• Crypto: Price targets for major cryptocurrencies like Bitcoin and Ethereum.
• Tech & Science: Corporate developments (e.g., OpenAI product releases), space launches, and public health events.
• Climate: The number and intensity of hurricanes and other significant weather events.

These markets are supported by a central limit order book where prices are determined by user activity. ^[8]

Crypto and On-Chain Strategy

In mid-2025, Kalshi began a strategic initiative to integrate its platform with the cryptocurrency and blockchain ecosystem. The stated goal is to embed Kalshi's markets into "every large crypto application and exchange" within 12 months. This strategy aims to attract crypto-native users and developers by leveraging the company's regulated infrastructure to create new financial primitives. ^[3]

Key components of this strategy include:

• Blockchain Partnerships: In September 2025, Kalshi partnered with Solana and Base to launch an ecosystem support network. This initiative includes a grant program to fund developers building tools and front-ends on top of Kalshi's platform.
• Developer Ecosystem: The company plans to transmit its real-time event data onto the blockchain, enabling developers to build applications such as advanced data dashboards, AI trading agents, and informational arbitrage venues. These on-chain initiatives are designed to be "purely additive" and complement the core platform.
• Strategic Vision: John Wang, Kalshi's Head of Crypto, described prediction markets as a "Trojan Horse" for bringing new users into the digital economy. He positioned Kalshi's event contracts as a more accessible version of crypto options, which have seen limited mainstream adoption.

The company also plans to "verticalize" its user interface, tailoring it to the specific information flows and contexts of different market categories to improve the user experience for distinct communities like sports bettors or financial traders. ^{[12] [4]}

Regulatory and Legal Status

Kalshi operates as a federally regulated financial exchange under the oversight of the Commodity Futures Trading Commission (CFTC). Its event contracts are legally defined as commodity derivatives, not company-linked securities like stocks or bonds. This distinction is central to its compliance framework, as it means that standard insider trading rules related to corporate information are generally not applicable. Instead, trading is restricted for individuals who possess material nonpublic information about the event itself. ^[1]

Lawsuit over Political Markets

A defining event in Kalshi's history was its legal conflict with the CFTC over the listing of contracts on U.S. political elections. In 2023, Kalshi filed a lawsuit against the agency after it moved to block these markets. In October 2024, a U.S. district court ruled in Kalshi's favor. The legal challenge concluded in May 2025 when the CFTC dropped its appeal. This victory was a pivotal moment for the company, as it provided regulatory clarity and allowed Kalshi to become a prominent venue for trading on political outcomes. According to John Wang, the ruling established that prediction markets "hold the same status as normal derivatives and stocks." ^{[3] [11]}

Team and Key Figures

• Tarek Mansour: As CEO of Kalshi, Mansour has represented the company in regulatory discussions, including participating in an SEC-CFTC roundtable on new financial frontiers. He has emphasized a strategy of hiring based on "high quality thinking, dreaming big, and working mercilessly hard." ^{[3] [11]}
• John Wang: Appointed as Kalshi's first Head of Crypto in August 2025, Wang is a former crypto trader and influencer. Prior to joining Kalshi, he was a fellow at the venture firm Paradigm and co-founded the blockchain security company Armor Labs. At 23 years old, he was tasked with leading Kalshi's expansion into the crypto ecosystem, growing its builder community, and leading its on-chain initiatives. ^{[11] [10]}

Market Performance and Funding

Kalshi's market share in the prediction market sector grew substantially from 3.3% in 2024 to 66% by the end of September 2025, overtaking its competitor Polymarket. This growth was largely attributed to a surge in trading volume on its U.S. NFL-related event contracts and the regulatory clarity achieved from its legal victory. ^{[3] [12]}

In June 2025, Kalshi announced it had closed a $185 million Series C funding round led by the venture capital firm Paradigm. The funding round reportedly brought the company's total valuation to approximately $2 billion. ^{[11] [10]}

The company's growth and strategic positioning attracted further investment, with a16z crypto announcing it was investing in the platform in October 2025. The firm highlighted Kalshi's compliant and scalable approach to event contracts and its plans for deep crypto integrations as key reasons for the investment. ^[13]

Partnerships

Kalshi has established partnerships to expand the reach of its markets. A notable collaboration is with the fintech platform Robinhood, which allows Robinhood users to trade on the outcomes of professional and college football games through Kalshi's markets. In September 2025, the company also announced partnerships with the Solana and Base blockchain foundations to foster a developer ecosystem around its platform. ^{[10] [12]}