Polymarket May Introduce a New Token to Validate Event Outcomes

Polymarket, the leading decentralized prediction market platform, is planning to issue a new token to validate the outcomes of real-world events, as reported by The Information on Monday, citing sources with knowledge of the matter.

Polymarket is seeking $50 million in fresh funding to boost operations.

The Polygon-based betting market, whose reputation is particularly tied to the 2024 US presidential election, is also seeking $50 million to boost its operations, the report said. The plans comes at the time when the upcoming American elections are heating up, which could drive growth and expansion for the platform.

More Tokens Coming to Market

The potential token launch could either supplement, replace, or serve as an alternative to the UMA Protocol, the oracle service currently used by Polymarket for market resolution and dispute adjudication.

As reported, investors in the proposed funding round are expected to receive warrants that would allow them to purchase the tokens if Polymarket proceeds with the token issuance.
Details regarding whether the investment would include equity or solely the token warrants and the timeline are undisclosed at the time of reporting. Polymarket has not commented on its valuation or the specifics of the investment terms.

Polymarket does not charge transaction fees, which has prompted speculation that a token issuance might be part of its strategy to boost revenue streams. Traders are also reportedly trying to position themselves for potential airdrops related to the anticipated token.

If realized, the new funding round would follow Polymarket’s $45 million Series B funding round in May, which was backed by Peter Thiel’s Founders Fund, Vitalik Buterin, and Dragonfly, to name a few.

Raising Money

The Series B funding came after a previously unannounced $25 million Series A round led by General Catalyst, with participation from Airbnb’s Joe Gebbia, Polychain, and other investors. So far, the event-betting platform has secured a total of $70 million across two funding rounds.

The new capital will help Polymarket to scale its global prediction market platform. Despite regulatory challenges, Polymarket has seen surging trading volumes in 2024, with a record $472 million in August and $397 million already in trades this month.

The company has also brought on veteran futures industry executive Richard Jaycobs to lead market expansion initiatives, including exploring regulated activities in the U.S.

The latest report comes as Polymarket is facing increased scrutiny from the Commodity Futures Trading Commission (CFTC) and competition from new players.

The platform was previously ordered by the CFTC to cease offering options contracts and pay a $1.4 million civil monetary penalty. Due to ongoing CFTC scrutiny, Polymarket does not operate within the U.S. but it remains operational globally.

The CFTC is closely monitoring Polymarket and other offshore crypto betting platforms as it is concerned about ensuring that these platforms operate legally within the bounds of U.S. law. The agency has also indicated that it may take enforcement action against platforms with major U.S. footprints that fail to register derivatives contracts.

Meanwhile, Wintermute, the leading cryptocurrency market maker, is gearing toward a new multi-chain prediction market platform launch, dubbed “OutcomeMarket.” The new platform, built using Chaos Labs’ Edge Proofs Oracle, will specifically target betting on the upcoming U.S. presidential election.

Wintermute said that the upcoming prediction marketplace will allow users to place bets directly from their preferred blockchain networks, including Ethereum, Base, and Arbitrum, thus eliminating the technical barriers associated with single-chain platforms.

As part of the plans, Wintermute will debut two tokens, TRUMP and HARRIS, representing the respective candidates, which can be used for placing bets and in DeFi applications. These tokens will be tradable across various exchanges.

The launch of Wintermute’s OutcomeMarket aims to provide enhanced accessibility and utility compared to existing platforms like Polymarket.