What is Polymarkets Purpose Behind Seeking 50 Million in Funding

CoinWorld reported:
Author: Marc Hochstein, CoinDesk; Translation: Baishui
According to an article on the technology news website The Information on Monday, cryptocurrency prediction market platform Polymarket is seeking $50 million in new financing with the help of the US election betting frenzy.
According to the article citing unnamed sources, the New York-based startup is also considering issuing its own token. The Information stated that if Polymarket continues to advance its issuance plan, investors in the proposed financing round will receive warrants to purchase tokens.


Polymarket CEO Shayne Coplan
The article states that Polymarket will use the potential token “as a way for users to verify real-world event outcomes”. It is currently unclear whether this will be a supplement, replacement, or alternative to the UMA protocol, a “oracle” service used by Polymarket to resolve market and adjudication disputes through community voting. The information did not mention UMA, whose token saw a slight increase after the article was published.
“The core of Polymarket is oracle competition,” the prediction market startup stated in its document.
Breakthrough Year
In May, Polymarket revealed that it had raised a total of $70 million in two financing rounds, with $25 million in one round and $45 million in another, led by billionaire Peter Thiel’s Founders Found.
The Information article did not specifically state whether investors in the proposed $50 million financing round will receive equity or just token warrants, nor did it mention Polymarket’s valuation, which has not been disclosed.
Polymarket is one of the breakthrough success stories this year, both for long-overlooked prediction markets and for cryptocurrencies themselves. Bets made through the website are programmed into smart contracts on the Polygon blockchain and settled in USDC, a token traded at a 1:1 ratio with the US dollar.
According to data from Dune Analytics, Polymarket set a record high monthly trading volume of $472 million in August, with this month expected to be at least the second highest volume month, with trading volume reaching $397 million as of Monday.
Traders can use Polymarket to bet on the outcomes of events ranging from football matches to tense situations in the Middle East, but the most popular topic so far has been the US presidential election, with nearly $1 billion invested by bettors.
Regulatory Restrictions
According to regulatory agreements, Polymarket blocks users with US IP addresses, but reportedly, savvy US traders have been able to bypass the geofence using VPNs.
The startup’s huge success this year has been a sore spot for Kalshi, a regulated, US dollar-denominated prediction market that has been engaged in a protracted legal battle with its regulatory body, the US Commodity Futures Trading Commission, in order to list contracts on which party will control both houses of Congress. The agency has been considering a proposed rule that would ban election activity contracts from all exchanges it regulates, which would push states to regulate such activities.
Heath Tarbert, chairman of the US Commodity Futures Trading Commission, said last week that he is concerned about “offshore election betting platforms that provide risk exposure to US customers.”
According to Bloomberg, Tarbert said at an event in Washington, “If anyone, whether it’s Polymarket or any other company, acts unlawfully, we will use our civil enforcement authority to ensure that this conduct stops.”