Riding the wave of heightened interest in U.S. election betting, crypto-based prediction market platform Polymarket is on the hunt for $50 million in fresh funding, as reported by tech news outlet The Information. The New York-based startup is also exploring the possibility of issuing its own token, a move that could further solidify its position in the burgeoning market.
According to sources, investors in this new funding round would receive warrants to purchase tokens if Polymarket proceeds with the issuance. The proposed token would serve as a mechanism for users to validate the outcomes of real-world events, though it's unclear if this would complement or replace the UMA Protocol, the oracle service currently used by Polymarket for market resolutions. The Information's article did not clarify this aspect, and inquiries to both Polymarket and UMA went unanswered.
Polymarket has emerged as a standout success in the prediction market niche this year. In May, the platform revealed it had raised $70 million in total, including a $45 million Series B round led by billionaire Peter Thiel’s Founders Fund. Monthly trading volume peaked at $472 million in August, with $397 million recorded so far this month, indicating a strong continuation of interest.
Bettors can place wagers on various topics, from sports outcomes to geopolitical events, but the U.S. presidential election remains the hottest focus, attracting nearly $1 billion in bets.
Despite its success, Polymarket faces regulatory hurdles. Under a settlement, the platform blocks users with U.S. IP addresses, though some American traders have reportedly circumvented these restrictions using VPNs. The regulatory landscape is complicated further by a protracted legal battle faced by Kalshi, a regulated prediction market seeking to list congressional control contracts. The U.S. Commodity Futures Trading Commission (CFTC) has indicated it may impose stricter regulations on election-related contracts.
CFTC Chairman Rostin Benham has warned that the agency is monitoring offshore platforms like Polymarket closely. He emphasized that any entities acting unlawfully would face civil enforcement actions.
As Polymarket seeks additional funding and considers launching its own token, its ability to navigate regulatory scrutiny will be crucial. With a surge in user interest surrounding the U.S. elections, the platform is poised for continued growth, but it must tread carefully to maintain compliance and ensure the longevity of its innovative approach to prediction markets.
September 2024, Cryptoniteuae