Expert: Kalshi's Crypto Futures May Harm On-Chain Liquidity

Khan specifically pointed to platforms like Hyperliquid and Polymarket, which focus on on-chain liquidity, suggesting that Kalshi's offerings could pull funds and users into closed ecosystems. He explained that when trading activity and settlement data remain on-chain, it enhances composability, allowing developers to build new applications and services on top of existing DeFi infrastructure. Conversely, he warned that off-chain activity makes it harder to capture these network effects.

Kalshi, having received approval from the Commodity Futures Trading Commission (CFTC), introduced Ethereum perpetual futures on June 4, followed by XRP and Solana on June 10. The platform also plans to list futures for Stellar (XLM), Dogecoin (DOGE), Shiba Inu (SHIB), and Hedera (HBAR). Khan also speculated that successful on-chain financial products could be replicated off-chain by platforms like Kalshi, though he acknowledged that such platforms can help mainstream prediction markets. The ultimate destination of new liquidity, whether on-chain or off-chain, remains unclear.