The company has approached traders, including sports bettors, about joining the effort as it expands in the US and rival Kalshi faces scrutiny over similar practices.
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Polymarket is recruiting staff for an internal market-making team that may trade against users on its platform.
The company has recently approached traders — including sports bettors — about joining the group, Bloomberg on Thursday, citing people familiar with the discussions.
The initiative comes as after resolving regulatory issues stemming from a 2022 case, when it paid a to the Commodity Futures Trading Commission.
Kalshi, a Polymarket competitor, already operates an internal unit known as Kalshi Trading, which places bids on its exchange to help support liquidity. The arrangement has drawn criticism from some users, and a proposed class-action lawsuit last month alleged that the desk sets betting lines that disadvantage customers.
Both Polymarket and Kalshi have also sought external participants to supply liquidity on their platforms. On Kalshi, companies such as Susquehanna International Group have taken on market-making .
Cointelegraph reached out to Polymarket for comment but had not received a response at time of publication.
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Prediction markets such as Polymarket and Kalshi have experienced significant growth in recent years, with both companies and reaching high as the sector expands.
The platforms enable users to bet on a wide range of events, from sports to predicting the next day’s weather in New York City.
During The New York Times’ DealBook Summit on Thursday, Coinbase CEO Brian Armstrong that prediction markets’ trading desks could strengthen such markets’ accuracy.
“If your goal is for the 99% of the people trying to get a signal about what’s going to happen in the world […] you actually want insider trading,” he said, adding that traders would benefit from “really good information” and “get a higher quality signal out of them.”
He added:
“Now, if you want to preserve the integrity of those markets, maybe you don’t want insider trading. So there might be like a decentralization test that has to go in here, but it’s not a clear cut answer.”
BlackRock CEO Larry Fink, who was also part of the discussion, was not so enthusiastic about prediction markets.
“We try to help people navigate a 30-year outcome,” Fink said. “I don’t really care about what happens in the next moment. I’m aware in the betting market, in football, you can bet every play, but to me, this is not how I’m going to live my life.”
In the third quarter of 2024, prediction markets saw a combined volume on the three largest platforms increase by, up from $463.3 million in the prior quarter.
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