Polymarket is seeking $50 million in funding amid U.S. election betting interest and may issue its token for verifying real-world event outcomes.
Polymarket, a crypto prediction market platform, is purportedly seeking to secure $50 million in additional financing in response to the ongoing speculation regarding U.S. election betting.
According to a report, the New York-based company, which has established itself as a leader in the decentralized prediction market space, is also contemplating the issuance of its token as part of this strategic expansion.
Polymarket’s proposed token would enable users to verify the results of real-world events, thereby further integrating blockchain technology into its wagering platform, according to unnamed sources cited in the article.
Warrants may be distributed to participants in the upcoming investment round, which would allow them to acquire the token if Polymarket proceeds with its issuance strategy.
However, it remains uncertain whether this token will be incorporated into the UMA Protocol or if it will serve as a replacement. Polymarket utilizes the UMA token of the protocol to resolve disputes through community voting.
In the interim, UMA’s token experienced a modest increase in value after the report, despite the potential for disruption. The token currently trades at approximately $2.41, representing a 1.3% increase in the past 24 hours.
Polymarket’s Success
Immense success has been achieved by Polymarket this year. The platform disclosed in May that it had acquired $70 million in funding through two phases.
The U.S. presidential election, which is scheduled to take place in November 2024, has been a significant factor in Polymarket’s rapid expansion. The platform has received over $993 million in wagers on the “Presidential Election Winner 2024” market and an additional $223 million on the “Popular Vote Winner 2024” market to date.
It is important to note that bets on Polymarket are processed using smart contracts on the Polygon network and finalized in Circle’s USDC, which maintains a one-to-one value relation with the U.S. currency.
Regulatory Issues
Rostin Benham, the director of the US Commodity Futures Trading Commission (CFTC), recently issued a warning regarding foreign platforms, including Polymarket, that allow Americans to wager on election results.
The regulator observed instances of attempted market manipulation on prediction markets, such as a case in which wagers were placed on Vice President Kamala Harris‘s victory in the 2024 election.
Polymarket settled with the CFTC in 2022, paying a $1.4 million fine for offering over 900 unregistered event-based binary options markets. This settlement was distinct from the aforementioned case.
In the interim, Kalshi, a regulated prediction market that is subject to the CFTC’s supervision, has encountered legal obstacles with the regulator regarding the listing of election-related contracts.
Additionally, the regulator is developing a proposed rule that could prohibit the execution of such contracts, potentially transferring election wagering regulation to individual states.
The current valuation of Polymarket has not been disclosed, and it is uncertain whether the $50 million round investors will receive equity or merely token warrants.
