Original article by Marc Hochstein, CoinDesk
Translated by: Baishui, Golden Finance
Reprinted: Koala, Mars Finance
Cryptocurrency prediction market platform Polymarket is seeking $50 million in new funding, riding on the U.S. election betting boom, according to a Monday article from tech news site The Information.
The New York-based startup is also considering issuing its own tokens, according to the article, which cited unnamed sources. If Polymarket moves forward with its offering, investors in the proposed funding round would receive warrants giving them the right to buy the tokens, The Information said.
Shayne Coplan, CEO of Polymarket
Polymarket will use the underlying tokens âas a way for users to verify the outcomes of real-world events,â the post states.
Itâs unclear whether this will be in addition to, replacement or alternative to UMA Protocol, the âoracleâ service Polymarket uses to resolve markets and adjudicate disputes through community votes. The message did not mention UMA, whose token rose slightly after the article was published.
âAt its core, Polymarket is an oracle competitor,â the prediction market startup said in its filing.
Breakthrough Year
In May, Polymarket revealed it had raised a total of $70 million in two funding rounds, including one for $25 million and another for $45 million, led by billionaire Peter Thielâs Founders Found.
The Information article did not specify whether investors in the proposed $50 million funding round would receive equity or just token warrants, nor did it mention Polymarketâs valuation, which has not been disclosed.
Polymarket is one of the yearâs breakout success stories, both for long-under-the-radar prediction markets and for cryptocurrencies themselves. Bets placed through the site are programmed into smart contracts on the Polygon blockchain and settled in USDC, a token that trades 1:1 with the U.S. dollar.
Polymarket hit an all-time monthly volume high of $472 million in August, and this month is on track to be at least its second-highest monthly volume, with $397 million in volume as of Monday, according to Dune Analytics.
Traders can use Polymarket to bet on the outcomes of everything from football games to tensions in the Middle East, but the most popular subject by far is the U.S. presidential election, on which bettors have invested nearly $1 billion.
Regulatory restrictions
Polymarket blocks users with US IP addresses in accordance with regulatory protocols, though crafty US traders have reportedly used VPNs to circumvent geofencing.
The startupâs runaway success this year has been a sore spot for Kalshi, a regulated, dollar-denominated prediction market that has been engaged in a protracted legal battle with its regulator, the Commodity Futures Trading Commission, so that it can list contracts on which party will control both chambers of Congress. The agency has been considering a proposed rule that would ban election campaign contracts from all exchanges it regulates, which would push states to regulate such activity.
U.S. Commodity Futures Trading Commission Chairman Rothstein Benham said last week he was looking at offshore election betting platforms that "provide exposure to U.S. customers."
âIf anyone, whether itâs Polymarket or any other company, acts in a way that violates the law, we will use our civil enforcement powers to make sure that behavior stops,â Benham said in response to questions at an event in Washington, according to Bloomberg.
