Platform explores an in-house trading desk to bolster liquidity as scrutiny intensifies across the prediction-market sector
Prediction market platform Polymarket is reportedly preparing to introduce an internal market-making unit that could actively trade against its own users. The move signals a new phase in the company U.S. expansion as competition and regulatory pressure continue to reshape the industry.
Polymarket has recently approached experienced traders including seasoned sports bettors to join a dedicated in-house desk, according to people familiar with the discussions. The initiative follows the platform’s efforts to rebuild its U.S. footprint after resolving compliance issues tied to a 2022 enforcement action, in which the company paid a $1.4 million penalty to the Commodity Futures Trading Commission.
A similar model already exiists among competitors. Kalshi operates its own internal liquidity unit, a practice that has sparked debate among users. A proposed class-action lawsuit filed last month alleges that the desk’s activity may influence market lines in ways that could disadvantage customers. Both platforms also continue to recruit external liquidity providers, with firms such as Susquehanna International Group participating on select markets.
Prediction markets have surged in popularity, with major platforms collectively posting a 565% jump in quarterly volume, rising to $3.1 billion in the third quarter of 2024. The sector’s rapid expansion has drawn commentary from industry leaders. During a recent conference appearance, Coinbase CEO Brian Armstrong argued that internal trading desks can enhance market accuracy by incorporating “good information” into pricing, while also acknowledging concerns about market integrity.
As interest grows, prediction markets remain at a crossroads—balancing innovation, liquidity, and the need for transparent trading practices.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.