Polymarket Begins Testing, Kalshi Receives Approval – Perpetual Contracts Arrive for Prediction Market Duo

Original by Odaily (@OdailyChina)

Author: Asher (@Asher_0210)

The prediction market's foray into perpetual contracts has finally moved from official announcements to concrete implementation.

Last week, Polymarket and Kalshi each saw critical progress. Polymarket's Perpetual Contracts Beta was opened to a select group of users for testing, with access set to gradually expand over the next 4 weeks. Meanwhile, Kalshi received CFTC approval to list the Bitcoin perpetual contract, BTCPERP.

In fact, Odaily previously discussed this trend in articles like "Polymarket and Kalshi Enter Perpetual Contracts, While Exchanges Poach the Prediction Market's Turf": prediction market platforms are expanding into perpetual contracts, while exchanges are simultaneously moving into event-based trading. The boundaries between the two are becoming blurred. In "What Does the US Government's First Lifting of the Ban on Crypto Perpetuals Mean for the Market?," we also analyzed the significance of Kalshi's BTCPERP approval for the US regulated crypto derivatives market.

Now, both directions have found more concrete footing. One is starting with small-scale product testing, the other is securing regulatory approval first. The paths differ, but the signal is the same: prediction market platforms are no longer content with just event trading and are beginning to penetrate higher-frequency, more standardized derivatives markets.

Polymarket Perpetual Contracts Beta Opens, Gradual Rollout Over Next 4 Weeks

Polymarket Officially Launches Beta Testing

Last week, Josh Stevens, VP of DeFi Engineering at Polymarket, stated on X that the Polymarket Perps Beta was now available to some users on polymarket.com, with access set to expand gradually over the next 4 weeks. He later added that some users who applied via direct message had been added to the test list, and a few more spots might be released later, but no new testers would be added for now.

Currently, Polymarket has not disclosed the full set of trading pairs, leverage multipliers, margin rules, or funding rate mechanisms supported by Perps. This suggests that this Beta is more of a small-scale product test than a full-scale launch open to all users. Polymarket's primary goal now isn't to see how much volume it can generate in the short term, but to ensure this new trading feature runs stably.

This is also evident from Josh Stevens's statements. When recruiting test users, he mentioned hoping for feedback on "things users don't like" and areas of the UI that could be improved. In other words, Polymarket is currently more focused on the order process, position display, mobile adaptation, and the overall smoothness of the interaction. For a function as close to an exchange as perpetual contracts, product experience itself is the first hurdle.

Based on feedback from some test users on X, the Polymarket Perps Beta already supports basic position opening. Some users mentioned opening leveraged long positions on BTC BTC in the test interface, and screenshots show assets like crypto and indices appearing in the interface. However, these are still early test feedback, and the final trading pairs and specific features to be launched await official disclosure.

Early Feedback Centers on Eligibility, Liquidity, and Trading Experience

Early feedback primarily highlights issues with testing eligibility and KYC requirements. The Beta phase is only open to some users; early applicants needed to request eligibility via DMs on X, and some testers also had to complete KYC identity verification. While there is talk in the community that these restrictions might be adjusted for the official version, issues like "verification needed," "not getting early access," and "will this affect future airdrops or points?" have already caused some user dissatisfaction.

A more core concern revolves around liquidity. Opening a position isn't the end goal for perpetual contracts; the real experience is determined by order book depth, slippage control, and order execution stability during high volatility. Some community members directly stated that Perp liquidity is the true test.

Another issue is user habits. Polymarket's original core users are accustomed to buying Yes or No binary event contracts and waiting for the event to settle. However, Perps introduce leverage, liquidation, funding rates, and continuous position management. This mechanism is familiar to professional derivatives traders, but for the large influx of new users from the prediction market, the learning curve and risk of losses will significantly increase.

Furthermore, Polymarket has previously faced user complaints about latency, order lag, and ghost fills. This leads some users to worry that similar issues in a Perps scenario would have a greater impact than in the regular prediction market. In the prediction market, a few seconds of delay might just mean missing a better price. But in high-leverage trading, latency, abnormal fills, or unstable position display can directly impact profit and loss.

Therefore, Polymarket Perps is currently in a磨合 phase. On one hand, initial test feedback hasn't been overly critical, with many users appreciating the clean interface and straightforward experience. On the other hand, access barriers, liquidity, leverage risks, and trading stability are all issues that must be resolved before a wider release.

Kalshi Opens the Door to Perpetuals with a Compliance License

Unlike Polymarket's small-scale testing, Kalshi's progress is more directly tied to the regulatory landscape.

On May 29th, the US CFTC approved Kalshi to list a Bitcoin perpetual contract. This contract references the spot price of Bitcoin and will be listed and traded as a futures product. According to the announcement, after review pursuant to Section 5c(c)(4) of the Commodity Exchange Act and Regulation 40.3, the CFTC found that BTCPERP complies with relevant regulations and the core principles applicable to designated contract markets (DCMs).

The significance of this step goes beyond Kalshi just adding another BTC contract. It places a product long confined to offshore exchanges and crypto-native platforms squarely within the framework of a US regulated exchange. Perpetual contracts are one of the most traded and familiar derivatives in the crypto market, but such products have been conspicuously absent from the US domestic regulated market. Kalshi's approval has essentially pried open a door for a US compliant crypto perpetual.

This also aligns with Kalshi's established strategy. It doesn't aggressively acquire users with high-risk products and then seek regulatory approval retroactively. Instead, it secures regulatory permission first and then uses its compliant status to expand its trading categories. Previously, Kalshi used its DCM status to package event contracts (political, economic, weather, sports) as regulated financial products. Now, it's replicating this path for crypto perpetuals. In other words, Kalshi's ambition extends beyond being a prediction market; it aims to be a broader compliant derivatives exchange.

However, a regulatory green light also implies clearer boundaries. While approving BTCPERP, the CFTC also noted that perpetual contracts are not suitable for all asset classes. For assets not yet covered, market participants must still submit them for review under Regulation 40.3. This means Kalshi can leverage regulatory certainty to build an advantage, but it will find it difficult to rapidly list a wide range of trading pairs like offshore exchanges or crypto-native platforms. Its expansion will be slower and more subject to the regulatory pace.

This highlights the difference between Kalshi and Polymarket. Polymarket seems to prioritize validating market demand first before gradually addressing regulatory boundaries. Kalshi, on the other hand, first secures regulatory space and then uses that certainty to drive product expansion. The former's advantage lies in crypto-native traffic and product speed, while the latter's advantage lies in its US compliant status and institutional narrative.

Therefore, the BTCPERP approval isn't simply Kalshi adding a new trading product; it signals a change in identity. Kalshi is transitioning from a "prediction market platform" towards a "regulated derivatives exchange."

The Real Test Begins After the Derivatives Door Opens

Both Polymarket and Kalshi advancing perpetual contracts simultaneously isn't just about adding a new feature to the prediction market. It's fundamentally about pushing their business boundaries further towards the exchange model.

The prediction market itself doesn't lack trading scenarios. Elections, sports, macro data, crypto prices, corporate events, and breaking news can all be packaged into tradable markets. Polymarket and Kalshi have already proven event trading is a lucrative business. However, perpetuals open up another layer of growth: they are more standardized and better positioned to capture the capital and trading habits of mature traders. For these platforms, moving into Perps isn't because prediction markets aren't profitable, but to build a more established derivatives business alongside event trading.

But this path is fraught with challenges. After entering the perpetual contract space, Polymarket and Kalshi's competitors are no longer just other prediction markets. They are up against mature crypto trading platforms like Hyperliquid, Binance, OKX, and Bybit. Users will directly compare liquidity, slippage, matching stability, leverage experience, and risk management capabilities. The brand and traffic of a prediction market do not automatically translate into competitiveness in contract trading.

Therefore, the true test for perpetual contracts isn't whether the platform can list more new trading pairs. It's whether they can convert event-driven traffic into sustainable trading volume. Only when users are willing to trade volatility, manage positions, and stay on the platform long-term, not just for a major event, can prediction market platforms truly claim to have found the key to the exchange business.