Polymarket's IPO Conundrum

👋 Hey, welcome to Predicted, the newsletter covering the business of prediction markets.

Forwarded this email and want it in your inbox? Hit the subscribe button below! 👇

Discussed in this piece:

This piece was written and researched by Omar El Safy and edited by Pet Berisha.

Our Q2 2026 report is still up. Prediction markets traded $111 billion in the quarter, more than 2024 and 2025 combined, across 70 pages of charts, and it is free. Read below 👇

Polymarket are weighing up between IPO and launching their own token, Bloomberg reported this week.

Their investors valued them at $21 billion in their latest round, and include Founders Fund, 1789 Capital, General Catalyst, Point72 Ventures and Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, alongside Coinbase and crypto funds like Dragonfly and Polychain.

And they've been dropping hints on both for a year. In October 2025, Polymarket's CMO, Matthew Modabber, said on the Degenz Live podcast, "There will be a token, there will be an airdrop."

In February 2026, Polymarket's parent company filed trademarks for POLY and $POLY, covering digital tokens. And at TOKEN2049 in Singapore earlier this month, CEO Shayne Coplan said they're exploring an onchain asset with "real programmable utility".

On the IPO side, they've hired Warren Jenson, formerly CFO at Amazon, as their first company-wide CFO, and Lisa Mantil, a former Goldman Sachs partner, to run institutional growth, both in September 2026.

Polymarket runs two exchanges.

International was the bigger of the two until September 2026, when the US exchange overtook it for the first time.

US notional volume rose from $87.9M in December 2025 to $8.75B in September 2026, and combos (Polymarket's parlays) accounted for 72% of the rise between August and September 2026.

International peaked at $10.72B in June 2026, the month the World Cup started, and fell to $4.33B in September 2026, down 60%.

Two years ago, Polymarket International took 97.6% of prediction market notional volume across Polymarket, Kalshi and the US venues.

Now it's 5.4%, in a market that grew from $0.89B a month to $80.8B.

Over the last nine weeks, weekly volume across every venue we track rose from $11.2B to $25.5B.

Most of that share went to Kalshi. And the rest is going to a growing list of new entrants.

DraftKings shares traded near a three-year low this month, down about 44% this year, and Flutter's are down about 65% over the same period.

And a lot of them have bought their own exchange licence (a designated contract market, or DCM) rather than plug into Kalshi's.

Others power the markets inside other apps:

Polymarket haven't bought another licence since QCEX. And like almost everyone else, their US exchange is mostly sports and parlays.

Polymarket made their name on International during the 2024 US election, before the US exchange existed.

Those are the users a token would reward. And they've been waiting on one since Modabber said it would follow the US relaunch. The US exchange has been trading since December 2025.

They're also loyal, with Polymarket's user retention beating more than 85% of crypto protocols in Dune and Keyrock data published in December 2025.

But Polymarket already make money from crypto without a token. pUSD, their own stablecoin, launched in April 2026, is backed 1:1 by USDC, and lets them keep the interest on user deposits instead of leaving it with Circle.

Allium estimate that's worth about $54M a year, on roughly $1.25B of reserves.

And that's the route Coinbase, Kraken and Robinhood have taken, too.

Coinbase built Base in 2023, Kraken built Ink in 2024 and Robinhood launched Robinhood Chain in July 2026, and none of them launched with a token.

Two smaller onchain prediction markets have gone the token route. Limitless launched LMTS in October 2025 and Opinion listed OPN in March 2026. Neither has come close to Polymarket's or Kalshi's volume, though Opinion briefly did while running incentives.

And then there's Hyperliquid, who gave 31% of their HYPE token to about 94,000 user wallets in November 2024, and nothing to venture investors.

HYPE trades at roughly 21x its listing-day price, even after falling from its high. LMTS and OPN both peaked on their first day of trading and now trade at 5% and 14% of their listing-day prices.

But a token also needs exchanges to list it, market makers to quote it and a treasury to manage it.

Going public would put Polymarket alongside three listed rivals, DraftKings, Flutter and Robinhood.

A listing would let early investors sell, let Polymarket buy companies with their shares, and put audited accounts in front of banks, states and sports leagues.

A share is also a slice of the whole business. HYPE, LMTS and OPN are each tied to trading on one exchange. Polymarket have two exchanges, pUSD's interest income and perpetual futures on International, and a share covers all of it.

And people already want in. Since October 2025, 15 SPVs (funds set up to buy shares in a single private company) have raised $62.2M for Polymarket stock from 764 investors, nine of them through the secondary marketplace Hiive, according to SEC Form D filings.

Kalshi are heading the same way. They closed a $1B round at $22B in May 2026, were nearing another $1B at about $40B at the end of September 2026, and Bloomberg describe that round as pre-IPO, with a listing possible in 2027.

If Kalshi list first, every Polymarket number gets compared with Kalshi's public accounts.

But sport is 99.4% of the US book, so an IPO relies on US courts letting sports contracts stand. And the appeals courts are split. The Third Circuit sided with Kalshi in April 2026, the Ninth Circuit went against them in August 2026, and the Sixth followed in September 2026.

New Jersey have asked the Supreme Court to take the case, and a ruling could come by June 2027.

Polymarket US have their own cases too. They were barred in Nevada in May 2026, denied an injunction in Michigan in June 2026, and sued by New York in September 2026.

The CFTC are on the venues' side, and last week proposed folding event contracts into the legal definition of swaps.

And there's no settled law for a US token either. The CLARITY Act, which would split crypto oversight between the SEC and the CFTC, failed a Senate vote 49-50 in September 2026.

Disclaimers

This newsletter is for informational purposes only and is not financial, business or legal advice. These are the author's thoughts & opinions and do not represent the opinions of any other person, business, entity or sponsor. Any companies, platforms, markets or projects mentioned are for illustrative purposes unless specified.

The contents of this newsletter should not be used in any public or private domain without the express permission of the author.

The contents of this newsletter should not be used for any commercial activity, for example - research report, consultancy activity, or paywalled article without the express permission of the author.

Please note, the services and products advertised by our sponsors (by use of terminology such as but not limited to; supported by, sponsored by or brought to you by) in this newsletter carry inherent risks and should not be regarded as completely safe or risk-free. Third-party entities provide these services and products, and we do not control, endorse, or guarantee the accuracy, efficacy, or safety of their offerings.

When you trade on prediction markets (including event contracts, opinion markets and other speculative instruments) your capital is at risk. Risks include price volatility, loss of capital, illiquidity, complexity, evolving regulation and lack of protection. Many prediction market operators do not currently operate in a fully regulated industry, and availability varies by jurisdiction. You may not be protected under financial compensation schemes typically afforded to investors dealing with regulated entities. Nothing in this newsletter constitutes a recommendation to place, hold, or close any position on any market.