In a bold move capitalizing on the fervor surrounding U.S. election betting, crypto-based prediction market platform Polymarket is reportedly seeking $50 million in new funding. This comes as the New York-based startup gears up for what could be a transformative phase in its operations, according to a recent report from tech news outlet The Information.
Token Plans And Future Prospects
Alongside the funding round, Polymarket is exploring the issuance of its own token, with unnamed sources indicating that potential investors might receive warrants allowing them to purchase the token if it comes to fruition. The proposed token aims to serve as a mechanism for users to validate real-world event outcomes, enhancing the platform’s engagement and functionality. However, details remain scarce regarding whether this token would supplement, replace, or serve alongside the UMA Protocol, the existing “oracle” service Polymarket employs to resolve markets and adjudicate disputes via community votes.
While neither Polymarket nor UMA has commented on the matter, the market remains curious about the implications of such a move. The potential introduction of a native token could further solidify Polymarket’s position in the competitive landscape of prediction markets.
A Year of Breakthroughs
Polymarket’s growth trajectory has been nothing short of remarkable. Earlier this year, the platform announced it had raised a total of $70 million across two funding rounds, including a $45 million Series B led by billionaire investor Peter Thiel’s Founders Fund. Despite the lack of clarity regarding the valuation of Polymarket or the specific nature of the proposed funding—whether investors would receive equity or only token warrants—the company’s success story continues to unfold.
Notably, Polymarket has emerged as one of the standout performers in the cryptocurrency space this year. With bets executed through smart contracts on the Polygon blockchain and settled in USDC (a stablecoin pegged 1:1 to the dollar), the platform achieved an all-time monthly volume of $472 million in August alone. As of the latest reports, September is on track to be another strong month, with $397 million in trades already recorded.
The Allure of Political Betting
While Polymarket allows users to wager on a variety of outcomes—from soccer matches to geopolitical tensions—the U.S. presidential election has captured the lion’s share of attention. Nearly $1 billion has been staked on election-related bets, making it a hotbed for prediction market activity.
However, Polymarket’s operations are not without challenges. Following a regulatory settlement, the platform blocks users with U.S. IP addresses, leading some crafty American traders to bypass these restrictions using VPNs. This success has ignited concerns from regulated competitors like Kalshi, which has been embroiled in a protracted legal battle with the U.S. Commodity Futures Trading Commission (CFTC) over the right to offer similar election contracts.
Also Read: CFTC Targets Polymarket – $930M In Bets Under Scrutiny Amid Regulatory Crackdown
CFTC Chairman Rostin Benham has expressed particular interest in offshore election-betting platforms that are potentially violating U.S. laws by catering to American customers. In recent comments, he emphasized that the agency would not hesitate to utilize its civil enforcement authority to address any illegal activities related to election betting, underscoring the precarious regulatory landscape surrounding prediction markets.
As Polymarket navigates these waters, its pursuit of additional funding and the possible introduction of a native token could set the stage for significant growth and innovation. As the U.S. election looms, all eyes will be on how Polymarket capitalizes on this unique moment in the world of crypto betting.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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