Polymarket Seeks $50M Funding, Plans Token Launch Amid Growth

A report from tech publication The Information on Sept. 23, citing ‘sources familiar with the situation,’ revealed that the blockchain prediction platform is negotiating to secure $50 million in funding.

The New York-based firm is also contemplating the launch of its own token to facilitate its betting operations, with potential investors in the funding round possibly receiving warrants to purchase these tokens, as detailed in the report.

Polymarket plans to use the token “as a means for users to authenticate the outcomes of real-world events.” If implemented, this would mark one of the most “noteworthy token launches” since the bearish market of 2022, it noted.

Polymarket’s Rapid Expansion

Previously, Polymarket raised $70 million across two funding rounds, including a $45 million Series B led by Peter Thiel’s Founders Fund.

The platform has gained significant traction for U.S. presidential election betting, with nearly $1 billion wagered on this event, accounting for 85% of its trading volume. Additionally, it has been utilized for betting on Taylor Swift’s engagement and Superbowl victors.

Kamala Harris’ odds have dipped to 3%.

43 days remain until the election. pic.twitter.com/Ua6UvlAVLK

— Polymarket (@Polymarket) September 23, 2024

The platform operates utilizing layer-2 blockchain technology from Polygon and oracle services from UMA Protocol, settling bets in the USDC stablecoin. However, regulatory constraints lead Polymarket to block U.S. IP addresses, though some users are reportedly able to circumvent this with VPNs.

U.S. regulators are not pleased with the platform. CFTC Chairman Rostin Benham has previously issued warnings regarding offshore election-betting platforms catering to U.S. customers, suggesting possible regulatory action.

Polymarket has experienced notable growth, with its monthly trading volume reaching $472 million in August, as stated by Dune Analytics. It is set to exceed this record in September, which has already recorded $400 million in volume.

Furthermore, monthly trading volumes have surged by 774% since the start of this year, with the number of monthly active traders peaking at 64,524 in September.

Crypto Funding Sees an Uptick

According to DeFiLlama, $634 million was raised in crypto funding during August, which signifies a 130% increase compared to the same month in 2023.

Nevertheless, crypto venture capital funding still lags behind its peak from late 2021, when over $3 billion was invested in blockchain startups monthly.

This month has seen some sizable raises, including $4 million for DeFi “superapp” LogX and $1.25 million for the cross-chain liquidity platform Prime Protocol.