Prediction-markets platform Polymarket is preparing to launch an internal market-making desk that could place trades directly against users, according to individuals familiar with the company’s recruitment efforts.
The firm has recently approached experienced traders, including sports bettors, to join the planned unit.
The move signals Polymarket’s long-term ambition to strengthen liquidity and expand its presence in the United States following the resolution of a major regulatory issue.
In 2022, the company paid a $1.4 million penalty to the Commodity Futures Trading Commission for operating an unregistered trading venue.
Market-Making Role Mirrors Competitor Kalshi
Polymarket’s plan mirrors the structure already in place at competitor Kalshi, which operates its own internal desk known as Kalshi Trading.
That desk provides liquidity by placing bids and offers across the exchange.
However, Kalshi’s model has drawn controversy.
A class-action lawsuit filed in 2024 alleges that the internal desk sets market lines that disadvantage retail participants.
The case argues that when platforms play dual roles — both as marketplace operators and direct traders — conflicts of interest can arise, potentially undermining market fairness.
Polymarket has not publicly commented on its internal desk plans.
However, the firm has historically supplemented liquidity by enlisting outside firms with market-making experience.
These participants have included major proprietary trading companies such as Susquehanna International Group.
Prediction Markets Experience Rapid Expansion
Prediction markets allow users to trade on the likelihood of events ranging from politics and sports to weather forecasts and economic data.
In recent years, regulatory clarity and rising public interest have contributed to substantial growth across the sector.
During the third quarter of 2024, the three largest prediction-market platforms recorded a combined $3.1 billion in volume — an increase of 565% from the previous quarter.
As trading activity accelerates, platforms have sought new ways to ensure that markets are continuously liquid, especially during periods of sudden volatility.
Internal trading desks are increasingly viewed by some industry participants as a practical solution.
Coinbase CEO Says Insider Trading Could Improve Accuracy
During a discussion at the New York Times DealBook Summit, Coinbase CEO Brian Armstrong offered a controversial perspective on how prediction markets operate.
He argued that trading desks with access to high-quality information could improve market accuracy.
He said, “If your goal is for the 99% of the people trying to get a signal about what’s going to happen in the world […] you actually want insider trading.”
He added that traders would benefit from “really good information” and would “get a higher quality signal out of them.”
Armstrong also noted that if the objective were to preserve fairness above all else, insider trading would be undesirable, concluding that the question does not have a “clear cut answer.”
BlackRock CEO Larry Fink expressed stronger reservations.
He said he focuses on long-term outcomes and is not interested in short-interval prediction markets, commenting, “I’m aware in the betting market, in football, you can bet every play, but to me, this is not how I’m going to live my life.”
Liquidity, Fairness, and the Future of Prediction Markets
As Polymarket moves closer to establishing its internal desk, the debate over the trade-offs between liquidity and fairness continues to grow.
Proponents argue that without active market makers, prediction platforms would struggle to maintain deep and stable markets, especially during major geopolitical events.
Critics warn that allowing platforms to trade against their own users could damage trust and bring renewed regulatory scrutiny.
The company has not indicated when its internal unit will formally launch.
However, its staffing efforts suggest that Polymarket is preparing for a period of rapid expansion within the U.S. market.
