Polymarket Explores Token Launch and $50 Million Funding Amid Surge in Election Betting
Blockchain-based prediction market Polymarket is in discussions to raise over $50 million in new funding, according to a report by The Information. The company is also contemplating the launch of a token to enhance its betting platform.
Investors participating in the upcoming funding round are anticipated to receive warrants, allowing them the option to purchase tokens should Polymarket proceed with its token issuance. The proposed tokens would enable users to verify the outcomes of real-world events, as noted in the report.
Should Polymarket move ahead with a token launch, it would represent one of the most significant token introductions since the crypto market began recovering in 2022. This development could pave the way for Polymarket to generate revenue through token sales, transaction fees, and other related activities, shifting from its current no-fee model to one where the token is integral to user engagement.
As of now, Polymarket has not responded to inquiries from Cryptonews regarding the matter.
Polymarket Sees Increased Activity as a Betting Hub for the 2024 U.S. Presidential Election
Polymarket's popularity has risen sharply, particularly as a destination for election betting during the upcoming 2024 U.S. presidential race. Users are actively placing bets not only on the presidential outcome but also on various related political events, reflecting a robust interest in political prediction markets.
The platform operates without charging transaction fees and benefits from high user engagement. Increased trading volumes during significant events, such as U.S. elections, demonstrate Polymarket's active user base. In August alone, estimates indicate the addition of around 75,000 new accounts.
CFTC Issues Warning Regarding Derivatives Trading
The potential launch of a token could subject Polymarket to increased regulatory scrutiny, especially if the token is classified as a security, which would necessitate compliance with securities laws governing its marketing and distribution. This month, the Commodity Futures Trading Commission (CFTC) cautioned Polymarket and other offshore platforms about possible enforcement actions if they continue to offer derivatives contracts to U.S. customers without proper registration. The CFTC is likely to view aspects of Polymarket’s operations as derivatives trading, thus requiring regulatory compliance.
In May, Polymarket announced it had raised $70 million across two funding rounds, including a $25 million round led by General Capital and a $45 million Series B led by Peter Thiel’s Founders Fund.
