Kunal Doshi

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Happy Thanksgiving, everyone! Prediction markets are exploding with record volumes, billion dollar raises and new players shaking up the landscape. At the same time, Neutrl is opening up one of the strongest and least talked about yield opportunities in crypto, and early numbers are already turning heads. Plenty to be thankful for in the middle of this market chop.



<h2 class="wp-block-heading">Market Update</h2>



Since my last update on prediction markets, the space has only gotten more competitive. New entrants want a slice of the rapidly growing pie, and the race for dominance now feels like a full-blown fundraising arms race. Kalshi’s valuation jumped to $11 billion after <a href="https://techcrunch.com/2025/11/20/source-kalshis-valuation-jumps-to-11b-after-raising-massive-1b-round/">announcing</a> a $1 billion round, following the NYSE’s $2 billion <a href="https://pitchbook.com/news/articles/polymarket-lands-2b-from-nyses-parent-company-as-prediction-markets-go-mainstream">investment</a> in Polymarket at a $9 billion valuation. Polymarket is already in <a href="https://www.coindesk.com/business/2025/10/23/polymarket-seeks-investment-at-valuation-of-usd12b-usd15b-bloomberg">early conversations</a> to raise at a $12 billion to $15 billion valuation, suggesting that the market is heating up faster than expected.



On the activity side, weekly volumes have broken past previous all-time highs, hitting $3.68 billion two weeks ago, which is 2.4x above last year’s election peak. A major reason for this surge is a new entrant called Opinion Labs. Backed by investors like YZi Labs, the platform is already doing close to one third of total volumes across prediction markets.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="803" height="470" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png" alt="" class="wp-image-110138" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=803 803w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=446 446w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=374 374w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=80 80w" sizes="auto, (max-width: 803px) 100vw, 803px" /></figure>



However, most of this growth appears to be farming-driven. Opinion Labs is running a points program, and the data quickly shows it. One market alone, titled <a href="https://app.opinion.trade/detail?topicId=1274">Will Satoshi move any Bitcoin in 2025</a>, has done $1.28 billion in volume, which accounts for 32% of its <a href="https://dune.com/queries/6047958/9725367">total notional volume</a>. It is not the type of market one would expect to generate that level of activity organically. Despite the volume surge, Opinion Labs only represents 14% of total open interest, another sign of inorganic participation.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="803" height="471" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png" alt="" class="wp-image-110141" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=803 803w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=445 445w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=373 373w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=80 80w" sizes="auto, (max-width: 803px) 100vw, 803px" /></figure>



Looking across categories, Polymarket has a more balanced distribution with Sports, Crypto, and Politics making up 38%, 28%, and 17%, respectively, of last week’s volumes.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="802" height="468" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png" alt="" class="wp-image-110139" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=802 802w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=447 447w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=375 375w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=80 80w" sizes="auto, (max-width: 802px) 100vw, 802px" /></figure>



On Kalshi, Sports is the clear story, with 85.5% of weekly volumes coming from that category. Regardless of platform, it is now undeniable that Sports is becoming the primary driver of prediction market growth.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="801" height="468" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png" alt="" class="wp-image-110143" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=801 801w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=447 447w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=375 375w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=80 80w" sizes="auto, (max-width: 801px) 100vw, 801px" /></figure>



One protocol well positioned to benefit from this trend is Sire, which we covered in a <a href="https://app.blockworksresearch.com/research/sire-and-score-where-ai-meets-prediction-markets">research piece</a> recently. Sire functions as an onchain sports betting hedge fund that captures inefficiencies in sports odds. It does this by using Score Subnet’s AI models that extract alpha directly from gameplay footage. In the last 32 days, the agent has executed <a href="https://x.com/Kunallegendd/status/1992942075189588425?s=20">$267,700</a> in volume on an initial vault size of $500,000, with an average win rate of <a href="https://x.com/Kunallegendd/status/1992942075189588425?s=20">58%</a> and weekly returns on traded volume near <a href="https://x.com/Kunallegendd/status/1992942075189588425?s=20">10%</a>.



What is clear is that this market is just getting started. With FanDuel <a href="https://press.fanduel.com/press-releases/fanduel-and-cme-group-unveil-new-prediction-markets-platform-to-launch-in-december">preparing</a> to launch its own prediction product, the next phase will reveal whether this becomes a winner-take-all environment or whether different platforms carve out their own niches in Sports, Crypto and beyond.



<h2 class="wp-block-heading">How Neutrl is cracking open the OTC market</h2>



Amid the ups and downs of the market, innovative protocols continue to emerge, and one that has stood out to me recently is <a href="https://www.neutrl.fi/">Neutrl</a>. It introduced NUSD, a synthetic dollar built on top of OTC arbitrage, funding rate inefficiencies and market neutral strategies. These sources of yield usually sit behind OTC desks or require constant hands-on management, but Neutrl wraps them into a product that everyday users can access.



Around 20% of deposits are deployed into hedged OTC positions. Neutrl acquires discounted locked tokens from early investors, foundations or teams, then hedges them in perps markets to capture the spread. Discounts vary depending on the lockup period, and can reach well above 50%.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1280" height="805" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=1024&amp;h=1024" alt="" class="wp-image-110140" style="width:728px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=1280 1280w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=409 409w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=415 415w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=348 348w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=80 80w" sizes="auto, (max-width: 1280px) 100vw, 1280px" /></figure>



This strategy benefits from the supply overhang in crypto markets and performs best in bearish periods when locked token holders under pressure are willing to accept deeper discounts just to access liquidity.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1040" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=1024&amp;h=1024" alt="" class="wp-image-110144" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=395 395w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=402 402w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=337 337w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">Source: https://app.stix.co/listings</figcaption></figure>







60% of the portfolio runs delta neutral strategies similar to the ones popularized by Ethena. These strategies hold spot exposure while shorting perpetuals to collect funding payments and basis spreads. The remaining share of the portfolio is held in liquid reserves such as USDC, USDT and USDe, which supports redemptions and cushions volatility.



The strategy seems to be working. Based on Neutrl’s first epoch results, the effective APY sits at 16.58%, compared with <a href="https://app.ethena.fi/dashboards/market-data">5.12%</a> on sUSDe. The difference comes from the OTC component, where the unrealized APR on deployed capital currently sits at <a href="https://x.com/behrin/status/1991491863317213536?s=20">42%</a>. OTC yield is proving to be a powerful source of return, especially in an environment where buyers can negotiate steep discounts.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1600" height="1398" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=1024&amp;h=1024" alt="" class="wp-image-110142" style="width:550px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=294 294w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=299 299w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=251 251w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The protocol launched on Plasma in October and the initial deposit cap of $50 million was filled in 20 minutes, which prompted the team to raise the cap by $25 million a few days after. Since removing the caps on Nov. 10, total <a href="https://app.neutrl.fi/metrics">deposits</a> now sit at $125 million. Beyond yield, depositors accumulate XPL incentives, Neutrl Points and UpShift points. With NUSD set to integrate with Pendle, speculation around point values could increase TVL further.



Neutrl benefits from a team with experience across both TradFi and DeFi, and it is backed by STIX, one of the largest OTC desks in the industry. That relationship likely gives Neutrl preferred access to locked token flow. Still, no strategy comes without risk. The main concern is the management of the short legs of these trades, especially in the event of auto deleveraging on perp platforms, which could leave the protocol with a naked long position. There is also the question of how scalable returns will remain as TVL grows.



Even with these uncertainties, Neutrl is one of the more compelling protocols I’ve come across in the last six months, and one worth keeping an eye on as it scales.



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Prediction markets surge to new highs as Neutrl unlocks hidden yield

Blockworks

Prediction market operator Kalshi is receiving investor offers valuing the company at more than $10 billion, according to a Bloomberg <a href="https://www.bloomberg.com/news/articles/2025-10-22/prediction-market-kalshi-fields-investor-offers-at-over-10-billion-valuation?srnd=phx-crypto">report</a>.&nbsp;



That valuation would make Kalshi one of the largest prospective valuations yet for a regulated event-trading platform.&nbsp;



The offers come just weeks after Kalshi closed a $300 million round co-led by Andreessen Horowitz and Sequoia Capital, which pegged the New York-based startup at around $5 billion.



Founded in 2018, Kalshi lets users trade contracts tied to real-world outcomes — from U.S. elections and economic data to sports contests and government shutdown durations.&nbsp;



The company operates under a Commodity Futures Trading Commission (CFTC) license, distinguishing it from crypto-native venues such as Polymarket, a major rival. After a court victory in October 2024 allowed Kalshi to list presidential-election contracts, trading volumes surged to new highs.&nbsp;



Chief executive Tarek Mansour said this month the exchange has reached an annualized volume of $50 billion.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Kalshi recently raised $300M+ at $5B from Sequoia, a16z, Paradigm and others. Since then, we&#39;ve grown over 3x, hit $50B of annualized volume, and became the largest prediction market in the world. And today…Kalshi goes global. 140+ countries. 1 liquidity pool. <a href="https://t.co/Z2myzRw9bA">pic.twitter.com/Z2myzRw9bA</a>&mdash; Tarek Mansour (@mansourtarek_) <a href="https://twitter.com/mansourtarek_/status/1976641515549348160?ref_src=twsrc%5Etfw">October 10, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The competition in prediction markets is intensifying. Intercontinental Exchange, owner of the New York Stock Exchange, recently pledged up to $2 billion in Polymarket at an $8 billion valuation. The National Hockey League became the first major sports league to partner with both Kalshi and Polymarket under multiyear agreements announced this week.



This is a developing story.



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This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Michael McSweeney</a>&nbsp;before publication.



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Kalshi

Kalshi attracts investor offers valuing platform above $10 billion: Report

Kalshi, the US-regulated prediction market operating under Commodity Futures Trading Commission (CFTC) oversight, has raised $300 million in new funding at a $5 billion valuation, <a href="https://www.nytimes.com/2025/10/10/business/dealbook/kalshi-prediction-market-fundraising.html">according</a> to The New York Times on Friday.



The company allows investors to trade on the outcomes of real-world events—from elections to inflation data—and has increasingly attracted both institutional and crypto-native traders seeking regulated exposure to event-based markets.



The platform, founded in 2018 by Tarek Mansour and Luana Lopes Lara, operates legally under the CFTC’s designated contract market status, distinguishing it from decentralized or offshore prediction venues that lack regulatory approval.



Its new funding reportedly includes participation from both Wall Street funds and crypto-focused investors, reflecting a broader trend toward convergence between traditional finance and Web3-linked derivatives. Kalshi’s move into “hybrid trading” seeks to blend event-driven contracts with more familiar asset-class tools, extending its reach to professional traders and retail users alike. Event-based trading has grown as market participants look for instruments tied directly to data releases or political outcomes. Kalshi’s expansion follows rising institutional interest in alternative hedging tools, and comes amid regulatory scrutiny of unlicensed platforms offering similar services.



The company’s CFTC oversight and compliance posture have been cited as key competitive advantages as it positions itself at the intersection of financial innovation and regulatory legitimacy.



This is a developing story.



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This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



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Kalshi

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