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- [00:00]
A
Yeah, well, Terry's obviously a titan of the financial industry. So we at Kibachi have a lot of respect for what the CMake group have done. But I think those particular points we at Kalshi are building, we're bringing this perpetual futures instrument and we're building it in the same kind of framework that the cme, for example, and many other derivatives and futures exchanges in the US that are regulated by the cftc, bringing it under the same framework that they are. And so the risk models that we've been employing are, for example, like very similar or kind of model off of industry precedents. So I think leverage, I think was another point that he was mentioning, like how perpetuals are kind of like a leveraged product. But on the CME and CBO and other types of exchanges, there are futures products which have like, much higher leverage than the perpetual futures we're offering on our platform. So I don't think by any means we're offering like a instrument that is like, you're very, very different from like a risk perspective compared to like the largest derivatives that are currently trading and available to to US customers on, on the other largest derivative exchanges.
- [01:18]
B
Hi, everyone. Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. Thanks for joining this live stream. Before we div today's show, let's hear a word from the sponsors that make this show possible. Fidelity has been investing in blockchain since 2014. They're not wondering if digital assets will shape the future. They're hiring the talent to help ensure they do. Explore opportunities today@crypto.fidelitycareers.com Fidelity is an equal opportunity employer. This episode is brought to you by Kape America's privacy First mobile carrier. Same premium service you'd expect from any other carrier, but designed so your number, your location and your data actually stay yours. Get 33% off six months at Cape Co Unchained. Quick plug before we keep going. If you want crypto news without the hype, subscribe to the Unchained Daily. It's our free morning newsletter. The day's most important stories explained clearly in a few minutes. Sign up@unchained crypto.com newsletters. Today's guest is John Wang, head of crypto at Kalshi. Welcome, John.
- [02:33]
A
Thanks, Laura, for having me.
- [02:36]
B
Kalshi, which is the largest prediction market in the US just brought the first US crypto perps onshore and that's a feat because the offshore market is $90 trillion. It's huge I've had seasoned traders and finance execs on the show say that they thought perps would eat the world. And this is also Kalshi's first non prediction market trading product. Tell us why Kalshi decided to launch crypto Perps for its first big foray into crypto.
- [03:07]
A
Yeah, well Kalshi's crypto prediction markets are actually also quite popular right now. We've grown, I think around 15x since the start of the year and it's the second largest category on the platform currently around like 3 billion, 2 to 3 billion dollars a month in volume. So it's quite a lot. But aside from that, we did, yes, enter perpetuals into the US and we are starting with crypto. The reason why we chose this asset class is kind of similar to why we started with prediction markets. They both originate from academic papers from decades ago by Nobel prize winning and very consequential economists. And Cauchy is essentially taking this financial instrument that people have a very strong demand for and bringing it to the US in a regulated way with the liquidity and the infrastructure to support it. And obviously it's huge outside of the US given that, as you said, $90 trillion headline number, but we see it as like a frontier of finance. It's essentially a new derivative that gives you the capital efficiency and sort of like leverage that options or futures might, but without many and many of the complexities involved. And yeah, we hope to make this kind of our next chapter as Kalshi bringing Kalshi towards our ultimate vision of creating the next generation exchange.
- [04:59]
B
And so as we mentioned already, this is a huge offshore market, but it's something that's basically new here the US So for Americans who are listening who haven't really ventured into PERSS trading offshore already, explain what a per even is and why or how a trader would use PERSS in their trading.
- [05:20]
A
Yeah, so PERSS stand for perpetual futures. And so it's essentially the most, in my opinion, like the most pure trading instrument where you can trade on the price of an asset going up or down so you can profit from both rising and falling markets and then you can also hold that position for as long as you want. So unlike options or futures or like, you know, the traditional types of derivatives that we're used to, they kind of, those kind of expire at a certain date which means you have to roll over your contract, start again, you know, pay the costs of entering the position again with, with perpetual futures it's actually sort of a much more seamless and simple trading experience. And then obviously leverage is, is also a component of this. You're able to trade more with less, you're putting up less capital and having still the same size of exposure or being able to kind of amplify your exposure based on leverage. So yeah, those are kind of the main value props of perpetuals as like the next tool in a trader's toolkit.
- [06:36]
B
And so I've noticed on the platform that the leverage amount is different from asset to asset. It's 6x on Bitcoin, 4.4x on ETH, 2.1x on hype, et cetera. How do you decide the leverage max on each asset and is the CFTC involved at all in helping to determine that?
- [06:59]
A
Yeah, so the asset leverage numbers, they are kind of not clean numbers as you noticed. Like they're 5.8x or like 3.4. And so these numbers are determined by our risk engine and our risk models that we did, you know, obviously have to go through the CFTC with in order to review and approve those. And so they vary based on the coin and the asset, based on unit conditions such as like market conditions, the historical volatility and returns of the asset and the liquidity scenarios for each asset.
- [07:39]
B
Okay, and you initially launched with Bitcoin. Now I see there's eth, sol, xrp, Doge, Hype, swe, Link, Bitcoin, Cash, Shiba, Inu and Litecoin. And I found this list kind of interesting because it's a mix of majors, but then there's also some assets that I'm just going to call it are in the zombie chain category. And then we also have recent up and comers like Hype Suite would probably also be in that category. How are you deciding on which crypto perps to offer? Like, is there a set of criteria that you've established?
- [08:21]
A
Yeah, I think it's a function of multiple factors. One like user demand to like regulatory sort of approval or maybe like, let's say like precedence for them. Like have we seen these assets listed on other CFTC regulated exchanges then it's kind of very easy for us to list them here as well. But we are just getting started and we will be expanding the asset list going forward into the future. We don't really have strong preferences for not listing assets or listing assets. We do want to provide the best asset diversity. So yeah, I would say it's primarily just a function of user demand and also your regulatory bandwidth.
- [09:15]
B
And how is it even kind of figuring out what the price is? Because there's so many exchanges around the world. Is it limited to US exchanges because you need to be regulated by the CFTC or does it include other venues or just. Yeah. How does it work on the back end?
- [09:37]
A
Yeah, so if you're asking about like the index price which the perpetual is pegged to, we utilize a regulated benchmark provider called CF Benchmark so they also power our crypto markets and it is a combination of multiple like crypto exchanges. So yeah, it's a bunch of CFTC regulated ones, US ones and we kind of aggregate the average prices amongst them. There's a whole methodology to it to ensure that it's as Tampa proof as possible. And so far it has been at least for the many months that we have our crypto prediction markets running which also run on the same infrastructure.
- [10:23]
B
And is it volume weighted or is it just truly an average or how does that work?
- [10:34]
A
Yeah, it's honestly there's actually like a 30 page methodology document on it. So there's like a lot of nuances to it. For perps we just take the price as it comes in through that feed. For prediction markets we take a 60 second time weighted average.
- [10:59]
B
Okay. So Arthur Hayes was on the show recently and he was talking about how the metric to track when it comes to perps is trading volume versus open interest. I should try to figure out what this was on Galshi. I could not figure it out. Is that like a public figure that people can see? Like it. It looks like that, you know you guys have have touted some trading volume numbers but not open interest or you know, feel free to correct me if I'm wrong about that.
- [11:31]
A
Yeah, it's. Those are definitely all important metrics and we are in our early days still as an exchange. I mean we really launched publicly. Well our wait list was kind of live like around like two weeks ago and then real public access I'd say like over the past two to three days. And so it's very early days for us. We are getting into the motion of things. I think it's these types of metrics are probably more meaningful to look at as a function of growth over time. So yeah, I think they're both quite important and we're definitely looking at them to grow both.
- [12:20]
B
Will you be revealing the open interest and can you reveal it now?
- [12:26]
A
Oh yeah, it's on the website. It's publicly available.
- [12:32]
B
Oh okay. I don't know why I couldn't find it. Is it on the perps page or. I didn't see it there.
- [12:40]
A
Yeah, yeah it is, yeah.
- [12:44]
B
So, so when I'm on the perps page, it's just listing the perps. If I go into. Yeah, if I, if I search for it on a specific perp, it doesn't list it.
- [13:04]
A
Oh, it should be available if you click into, like the page.
- [13:07]
B
Yeah, okay. Okay. I. I don't see it here, but okay. So I did also want to ask. So as we talked about, perps have not existed before in the U.S. and actually, sorry, before I move on. So what is the open interest then right now? So you've had five and a half billion dollars in volume and open interest is. What's the number on that?
- [13:37]
A
I'm not sure the exact number as of today, but yeah, not sure on the exact number, but I think it's like on the order of like seven to eight figures for Bitcoin that I have to check. Yeah.
- [13:55]
B
Okay. Okay. All right. So people can do the math on that. All right, so as we discussed, perps have not existed before in the US and the existing customer base probably is, you know, currently people who in the past have accessed perps offshore. And that's probably going to be a somewhat small number. So how are you planning to educate American traders about perps and how they work and how they can use them?
- [14:32]
A
Yeah, I think education, it really is like a very large part of the mission here and what we have to do to get people trading a new asset class. It's something that we had to do for prediction markets as well. And so as you said, there's kind of a small amount of users right now that were quite familiar with perps. They're quite well versed in it. We have to translate these concepts, for example, like in things like stop loss, take profit, how to control your position, how to choose your leverage, and tracking your liquidations. We're trying to make that super accessible to people. We're building a bunch of tutorial and learning programs for people to understand TOPS better, creating videos, but also just in the product itself, making it very easy for people to like, automatically send in their guardrails and kind of walk them through the interface via onboarding as well.
- [15:37]
B
Okay, so as I'm sure you're aware, with Hyperliquid, there's been big liquidations. And so, you know, auto deleveraging is something that people are concerned about when it comes to perps. How does auto deleveraging work on Kalshi? And just to explain this is, you know, if someone has a position where the bet they've made is potentially going to go underwater and they would need to be liquidated. So go ahead and kind of maybe contrast and compare how ADL works on a venue like Hyperliquid versus how it works on Kalsi.
- [16:19]
A
Yeah, so on Kalshi, our risk system is somewhat different from that of offshore exchanges. We have multi layer margin model and risk system that essentially protects against sort of force majestic scenarios such as that. And particularly we have a guarantee fund in place that is backed by some members of the exchange. And also Kalchin itself is depositing that guarantee fund which is essentially this layer of protection that happens during scenarios where liquidations go awry or the market moves in a very volatile way very quickly. So it kind of bites into that to cushion any sort of, any of those types of volatilities. And obviously I'm not the chief risk officer at Kalshi, so I'm not super well versed in these specific margin models that we utilize. We have a bunch of quants on the team that are much smarter than meat that work on that. But yeah, there are definitely a lot of different like protections that we've had to like put in place when it comes to being, you know, in a CFTC regulated environment. For example, having a clearinghouse having segregated customer accounts and also this guarantee fund is something that's required.
- [18:01]
B
Well one question is just, you know, on a venue like Hyperliquid, the first traders whose positions would be forcibly closed would be the more profitable ones. Would that ranking be the same on Kalshi?
- [18:20]
A
That doesn't happen in like normal scenarios. I believe like we have essentially like a few layers of protection often including the risk tranche for the guarantee fund. So yeah, I wouldn't say like in backtested scenarios we would have triggered an auto deleveraging. But yeah, there's multiple layers to how it works at Kalshi's Professionals Exchange. And so I think the first line of defense is kind of that guardian.
- [19:00]
B
Okay, so when you talked about the different types of materials that you were preparing for retail to understand what they're engaging in, what are some of the kind of, you know, things that you would want them to know to not have a situation where, where they have forcibly liquidated or, or you know, just anything else that you feel is necessary for them to know to trade perps.
- [19:29]
A
Yeah, I think we make it easy for you to set a take profit and stop loss since they're putting in those guardrails when you're making a trade and like kind of thinking through like where you want the trade to be and where you'd want to stop out of the trade, for example. Those, I think are really important. And then just kind of being able to. We make it easy also for people to size their positions with isolated margins, kind of the default. So just like measuring out the amount of cost you'd want to put into a certain position, that's also something that we care about. And then I think just recurrently you're checking in on your position. We show like your health factor, for example, on the exchange, just checking if your position is healthy, if you need to pop it up. We kind of provide you the directions if your position is looking at risk. So think really just utilizing the interface, the tools that we give you as well as you can. That's probably my best advice.
- [20:49]
B
All right, so Terry Duffy, the CEO of the CME Group, recently said that he felt crypto perps were, quote, a disaster waiting to happen. He said, I believe the market has been supplanted by the speculation market, and that does not suit anyone's interest. He claims that the combination of extreme leverage and automatic liquidations will hurt retail investors. What's your response to his criticism?
- [21:19]
A
Yeah, well, Terry's obviously a titan of the financial industry, so we at Kabashi have a lot of respect for what the CMake group have done. But, you know, I think those particular points we at Kalshi are building like this, like, we're bringing this perpetual futures instrument and we're building it in the same kind of framework that the cme, for example, and many other derivatives and futures exchanges in the US that are regulated by the CFTC are bringing it under the same framework that they are. And so the risk models that we've been employing are, for example, very similar or kind of model off of industry precedents. So I think leverage, I think, was another point that he was mentioning, like how perpetuals are kind of like a leveraged product. But on the CME and CBOE and other types of exchanges, there are futures products which have much higher leverage than the perpetual futures we're offering on our platform. So I don't think by any means where offering like an instrument that is like, you're very, very different from like a risk perspective compared to like the largest derivatives that are currently trading and available to US customers on the other largest derivative exchanges.
- [22:53]
B
Okay, so in a moment, we'll talk about the pitch that Kalshi is making to institutions. But first we're going to take a quick word from the sponsors who make this show possible. Fidelity has been researching and investing in blockchain since 2014, long before it was a headline, and they're hiring crypto and defi professionals to join their team and discover what's next in finance. Fidelity is looking for people with fresh perspectives from different backgrounds, whether it's tech, UX or product design, Whether you're crypto savvy or crypto curious, as long as you have the passion to make a real impact at a company striving to make finance accessible to all. Explore crypto careers at Fidelity today and make the decision that could change your future. For the visit crypto.fidelitycareers.com to learn more. That's crypto.fidelitycareers.Com Fidelity is an equal opportunity employer. If you hold crypto on your phone, your biggest vulnerability isn't your wallet, it's your carrier. AT&T Verizon and T Mobile have been breached again and again, and SIM swaps are still one of the easiest ways for attackers to drain accounts. That's where Kape comes in. America's privacy first mobile carrier, same premium service, but Kape rotates the identifier on Your Sim every 24 hours, deletes your call and text metadata after a day, and protects against SIM swaps with a 24 word recovery phrase that only you control. You also get two middle to end encrypted secondary numbers for banking and signups, so you stop handing your real number to every app that asks. Go to Cape Co Unchained and use code UNCHAINED for 33% off your first six months. Before we dive back in, a quick word about something we make ourselves. If you like the way we cover crypto on this show, clear eyed, no shilling, just what actually matters. You'll like the Unchained Daily. It's our free newsletter that lands in your inbox. Talks every weekday with the most important stories in crypto written by journalists, not marketers. No jargon, no hype, no number go up cheerleading. Just the news you need to stay ahead in the time it takes to drink your coffee. Subscribe for free@unchained crypto.com newsletters. Back to my conversation with John Kelsey is also making a pitch to institutions like hedge funds, prop shops, banks. Are you seeing uptake from them already? And if not, you know how do you plan to get more on board?
- [25:33]
A
Yeah, well specific to crypto there was you know, some interesting trades recently. Block trades done on our exchange and RTC trades done like priced using ks particularly like on the Clarity act passing. So I think Ara, Galaxy and another like undisclosed counterparty they conducted Some large, large trades essentially around this where they were hedging out their portfolios based on the Clarity act odds of Ki, which have fluctuated a lot over time. So that's actually one sort of very public institutional use case that has been released related to crypto. Then we've had a bunch of even small businesses hedge out their trading risk. Sorry, not their trading risk. There's sports risk on Kalshi, for example, different bars in New York hedging out their risk based on like the NBA Finals or some watchmakers hedging out their risk based on the World cup results. And then from like larger institutions, we've gotten a bunch of sort of institutional integrations with all of the like fcms and like types of prime brokerages and trading terminals that many of these large hedge funds utilize. And so they're essentially able to access Kalshi now through those means. And that's kind of one of our, I would say, differentiating factors being in the US for institutions for perps, for example, is that we can plug into the same infrastructure that institutions currently have their assets parked into and all their workflows parked into and sort of utilize that like network and like entry point for institutions to be able to trade on our product.
- [27:39]
B
And you know, refer. Going back to the Terry Duffy comments, I noticed that you hired a risk managing manager from CME and also that you hired someone from Morgan Stanley. And I started thinking, well, maybe Terry Duffy's comments had to do with the fact that it almost looks like Kalshi could become a competitor to cme. Do you feel like you're headed in that direction? Who do you think of as your main competitors?
- [28:17]
A
Yeah, I mean Kalshi's ultimate goal has always been to build like the largest exchange on the planet. And so we, I guess we don't really like particularly look at competitors in our every single day to day, for example, like perpetual futures, we were kind of the first to bring that to the US on the day of approval. We were like the only domestic pops exchange approved. If we were looking at competitors, we wouldn't have done that. So I think ultimately every exchange is vying for traders. They're buying to build good trading instruments. And our next chapter is to expand beyond prediction markets.
- [29:10]
B
Yeah, well, I mean clearly that's what this particular episode is all about. Well, let's talk about where Kalsheet perps might go in the future. I saw something that said it looks like perps on agricultural commodities will not be allowed, but are you considering launching perps on Other asset classes such as stocks, indices, commodities and if so, how would you decide which of these to roll out and what type of review process do you do and does that, you know, entail the cftc?
- [29:49]
A
Yeah, so we are starting with crypto and have other asset classes on the way. It's the timelines for those are still, you know, in flux, but we are kind of working internally and working with the regulators to get those underway.
- [30:13]
B
Can you reveal what asset classes you're looking to add next?
- [30:19]
A
Unfortunately not on the Unchained podcast today, but maybe sometime in the future.
- [30:26]
B
And actually I meant to ask this earlier about the crypto perps that you have. What number? Like are you aiming to just do that pretty much for every crypto asset or you know, and how quickly can you add each one?
- [30:43]
A
Yes, I think we can self certify our assets so we can actually just like add them subject to like, you know, some level of common sense and review from the cftc. We can add them pretty quickly. We have to build our own risk models for them, make sure all the systems are tied and then list them. And we're definitely going to list more. I don't think we're going to go into the super tiny micro cap territory. But yeah, we definitely want any sort of really topical asset that people are trading to be listed on the platform. And there are definitely quite a few, few, I think three or four right now that we're missing that we're soon to be adding that people are trading very heavily at the moment.
- [31:41]
B
And to go back to adding new asset classes, do you have to work with the CFTC on each of those?
- [31:50]
A
Yeah, so this is like a public thing, but for every single new asset class we do have to complete, I believe what it's like a 40.3 filing. So those do take, those are actually sort of official filings that we need to make as opposed to listing a new asset in the existing asset classes that we've been approved for, which is currently just crypto.
- [32:15]
B
And if you end up rolling out perps on single stocks, do you have to engage with this SEC on that?
- [32:27]
A
If. Yeah, I think like the SEC is, is usually involved in equity based discussions, but I'm not actually involved in sort of any of those types of discussions personally, so I'm not sure if I can comment on that. But just like in general, I believe you have to talk to the SECA if you want to do directly. Star.
- [32:52]
B
Okay, so as we talked about, perps aren't just so popular outside of the U.S. and now that the CFTC is allowing them to come onshore. There are other players who are moving into this area. Coinbase already had launched a perp like product was structured a little bit differently, but effectively it was kind of the same thing that was before this latest COTC approval. Kraken acquired, but no meal to gain access to perps. Robin Hood and Gemini are preparing offerings. And then of course we have the elephant in the room, Hyper Liquid. It's you know, obviously the dominant exchange for perps. And I was wondering how you see Kalshi competing with and setting itself apart from these other offerings.
- [33:40]
A
Yeah, I think inner Hyper Liquid is probably in a like a different game than we are. We are like targeting for example, like the US user base, but also internationally we are available. They're obviously more of a on chain, no KYC kind of very innovative platform. Whereas for us, we try to package these very powerful products in a way that normal users can use and large US institutions and hedge funds and such can utilize. So we're kind of like targeting different user bases and going about it in different ways. I think ultimately though, like this is really the largest trading product in crypto. It's one of the newest and largest growing derivative classes. And it's only now coming into the US so the sky is blue. It's a huge positive sum game. I think we're inning zero, probably 0.5% or 0.2% or something of the US has actually adopted perpetual futures. If you really believe in this instrument like I do, there's a long way to go.
- [35:09]
B
Oh yeah, for sure. It's only just getting started. Well, let's talk about your role. You were hired to lead Kalshi's push on chain and to grow its crypto native user base. And you know, I was wondering how you think about your approach to that mission. You know, especially during this time when AI has pulled a lot of attention away from crypto. We're sort of in a bear market. What's your approach to your job?
- [35:40]
A
Yeah, I think there are a lot of lessons to be learned from like the crypto industry, how the industry approaches things. I think the crypto industry, there's been a lot of learnings that we've had around. You're just building trading interfaces on how to go about like marketing and acquiring users. Even lessons or sort of like battle scars that we've seen happen in crypto that we might want to avoid in the way that we approach things. For example, building onshore instead of offshore or building in a regulated way to ensure that disaster scenarios such as FTX don't occur. And I think, yeah, the crypto, as you said, has been in a bear market with AI sucking a bunch of liquidity from other industries. I think Kalshi is in quite a unique position where we have a large amount of the US consumer base joining and many of these people have either not really heard or not really used crypto before, or they've used it maybe once or twice and touched Bitcoin. And I think our products really just make crypto more accessible to people. That's why it's had so much demand on our platform. It's kind of like a new user base that we're targeting with a new form factor. So hopefully the net result of this is that more people are aware and are actually actively trading on crypto because of the products that we've provided.
- [37:35]
B
Yeah, Couchie has actually also been engaging in tokenizing your event contracts on chain with Solana. I think that's been pretty small, but I'd be curious to hear, you know, what interested you in doing that and then what lessons you've learned from seeing how that's played out.
- [37:58]
A
Yeah, I think the primary motivating factor was kind of like, well, firstly it was, I think D flow here, which I'm wearing the jacket. They were the ones that tokenized these on chain kind of as like a third party. And they worked, I think closely with Solana to do that. And the thesis they had was getting event contracts on chain would be super cool and that getting them inside of the largest on chain wallet interfaces would be very valuable to users. I think some people definitely found it useful and it got integrated in a bunch of different places, such as Phantom Soulflare. I think Jupyter also did their own version, but I think most users kind of prefer going on Kalshi directly. I think the form factor that we've built into our interface makes it so that people just find it very attractive to go there. But we also have brokers elsewhere that are integrated into the exchange, such as Robinhood or Coinbase. So users, there's always migration in and out between the users that want to live on their like home app versus like maybe they want to get a more native trading experience and they kind of bridge directly to Kalchi.
- [39:39]
B
All right, so I know that you are the head of crypto at Kalshi, but I can't help but need to ask you about some of the top news stories involving Kalshi, especially in the prediction market arena. So Kalshi and polymarket really have been kind of in this tug of war between the states and the federal government over, you know, whether or not what you're doing and, you know, qualifies as sports betting and whether or not it should be allowed, you know, whether or not states can regulate you and whether the federal government has more jurisdiction. So, you know, what's your take on how that tussle is playing out and you know, give us your kind of view on why it is that Kalshi should not be regulated at the state level and doesn't count as betting.
- [40:39]
A
Yeah, honestly I would leave the legal questions up to the legal team at Kalshi. I'm not super versed on that on a day to day. I wish, I wish I was. But yeah, I think those guys can really, they've, they're really into the details, so.
- [40:59]
B
Okay, well, so another area that people are interested in is there's been quite a lot of concern about insider trading on Kalshi and I wondered if you could talk a little bit about how Kalshi is approaching that problem.
- [41:20]
A
Yeah, so insider trading is definitely like an issue across all markets. There's always asymmetric information. You know, in the stock market and even commodities markets we've seen as well. But prediction markets obviously event based. So there are like sort of differentiated and acute insider trading risks that apply to this industry as well. And we have a lot of predictions and mitigations in place to ensure that we preserve the integrity of our markets. For example, it is like an exchange rule that we ban forms of insider trading and we execute on that by having like lists of today we actually announced one with a provider that essentially gives you like lists of employees. Or like if we work with IC360, which are like sporting leagues, to get lists of all the athletes, coaches, people who work in these companies, or for example for political markets, we work with providers that give us lists of congressmen and all the campaign staff involved in their departments. And so we can kind of like outright prevent a lot of these cases from happening. And then we can also detect retrospectively if there are suspicious patterns and then follow up on those. I think one of the key benefits of Kalshi as a prediction market when it comes to like preventing insider trading is we do have KYC and that's like a regulatory requirement for operating in the US Whereas like a lot of the other like prediction markets that exist in the world, they do suffer from more insider trading because they don't have surf predictions.
- [43:22]
B
Okay, so it seems like you were alluding to Polymarket there. And that's probably the main company that is spoken about in the same breath as Kalshi. And there is what definitely seems like quite a strong rivalry between you two. I've heard on other podcasts people compare it to Coke and Pepsi or Uber and Lyft. And there have been a number of articles and other commentary that's come out saying that Kalshi has, you know, planted these stories that are meant to be some kind of smear campaign against Polymarket. The most recent news on this front was an article saying that Polymarket believes that Kalshi is somehow spying on them. With Kalshi coming up with pretty much the same exact plans and somehow announcing them or executing them just before Polymarket is about to. For instance, Polymarket had an idea for a pop up grocery store and Kelsey executed the same idea. A few days earlier there was an announcement about perps launching in the U.S. they say that Kelshi undercut them and announced the same thing an hour earlier. What's your response to these allegations?
- [44:41]
A
I mean, I think it's pretty funny, like we just being in the thick of it every day. There is definitely like a lot of like people just throwing random rumors around about the rivalry. I don't know if I've seen that exact article, but at least for the specific perps example, I believe we didn't actually announce perps that day. It was leaked outside of our, I think specific. It wasn't intentional if that makes sense. It was leaked by journalists on that day and then Polymark get announced I think a few hours later after it was leaked publicly by a journalist that we were releasing Popes. So I guess. Well, I can speak to that story which is like, it seemed like it was kind of the other way around, but yeah, I don't really know what the types of accusations are in those articles, but definitely I haven't really seen any of that activity myself.
- [45:50]
B
Okay. Yeah, I mean I see so much commentary about this on Twitter. I think people love to engage in. Yeah. Gossip about those kinds of things. Well, last question. So Cal, she just raised a new $1 billion round led by CO2 in May at a $22 billion valuation. Tell us a little bit about what the. What is next on the roadmap for Kalshi.
- [46:20]
A
Yeah, I think it's an extension of what we've been doing so far with like, you know, increasing our institutional adoption. Growing perps is huge for me as well. Getting more brokers onto the platform now, now with, you know, purposes. While it's, it's like a new asset class we have that we could run a lot of the similar strategies that we've done for prediction markets for. And yeah, I think getting more hedging use cases, I think we're at a scale now where the liquidity and the volume on the exchange is mature enough to facilitate a lot of institutional use cases. And so those are I think are exciting, awesome. But I think honestly it's like a stacking of things day to day ensuring that the exchange gets better and better, the users feedback we listen to and implement their changes and constantly iterate towards building a better product.
- [47:28]
B
All right, well thanks so much for sharing all this news about Kalshi and we look forward to seeing what you do next.
- [47:37]
A
Thanks so much for having me on. Thank you. Laura.
- [47:51]
B
Nothing new here on Unchained is investment advice. This show is for informational and entertainment purposes only and my guest and I may hold assets discussed on the show. For more disclosures, visit Unchained Crypto.com. It.