Prediction-market operator Kalshi is terminating its long-term Volume Incentive Program nearly a year early on Oct. 13, accelerating an end date previously scheduled for Oct. 1, 2027, according to a Sept. 28 filing with the Commodity Futures Trading Commission (CFTC).
The decision arrives as regulators examine trading patterns in Kalshi's crypto markets. CFTC officials reportedly inspected perpetual futures activity after researchers highlighted repetitive transactions around fixed amounts, including repeated $5,500 trades in Ethereum perpetuals. Kalshi rejected wash trading allegations, explaining that the activity stemmed from market makers placing fixed-size quotes hit repeatedly by other traders.
Shift to Targeted Trader Rewards
Ahead of terminating the volume model, Kalshi submitted a new Deposit and Trading Reward Incentive Program to the CFTC, which received a modified version on Sept. 25 with an effective date of Sept. 28. The updated framework replaces general volume share distributions with targeted promotions lasting between 3 and 90 days based on account age, location, funding status, and market category.
Individual rewards under the new program are capped at $2,500 per promotion and $5,000 per participant over a two-year period. To address market integrity concerns, the filing explicitly excludes self-matching, wash trading, and prearranged trades from earning rewards, while assigning heightened monitoring responsibilities to Kalshi surveillance staff.
Record Volumes and Fundraising Goals
- Early Termination: Volume incentives end Oct. 13, moving up the original Oct. 1, 2027 deadline.
- New Reward Caps: Targeted incentives are capped at $2,500 per promo and $5,000 lifetime per user.
- Market Share: Kalshi handled $3.24 billion on Sept. 27 and $15.66 billion across seven days.
The incentive restructure comes alongside historic trading volume on the platform. Data from DeFiRate shows Kalshi processed a record $3.24 billion on Sept. 27 and $15.66 billion in the seven days leading up to it, capturing roughly 80% of tracked prediction-market activity.
This volume surge underpins ongoing capital efforts, as Kalshi negotiates a $1 billion funding round at a $40 billion valuation with investors including Sequoia Capital, Wellington Management, Tiger Global, and Dragoneer Investment Group. The prospective valuation represents nearly double the $22 billion figure achieved during its $1 billion round in May.
Why It Matters
As prediction platforms transition into mainstream financial venues, regulatory authorities are placing heightened emphasis on liquidity quality versus incentivized volume. By replacing broad volume payouts with strictly monitored promotional tiers, Kalshi aims to insulate itself from manipulation claims while convincing institutional investors that its surging market share represents organic demand. The shift will test whether retail trading activity remains sticky when artificial volume subsidies are removed.
