Kalshi has taken a major step to attract cryptocurrency users by allowing its bettors to buy and sell tokenized versions of their wagers on the Solana blockchain. The company confirmed the news in an exclusive statement to CNBC on Monday, signaling its intention to compete more directly with Polymarket, a rival platform that has already captured billions from crypto-savvy traders.

Tokenization involves creating a blockchain-based digital representation of a real-world financial asset, such as a treasury note, corporate bond, or stock. These digital tokens can be traded or held just like the underlying asset, but they exist on a decentralized ledger such as Solana or Bitcoin.

On Kalshi’s platform, the new tokenized contracts function similarly to the traditional event contracts users are familiar with. The difference is that users trade the tokens instead of the original contracts, offering an additional layer of anonymity. This move aligns Kalshi more closely with Polymarket, where trading occurs entirely on-chain.

The company confirmed that support for these tokenized event contracts is now live on Solana. Two decentralized finance protocols, DFlow and Jupiter, will act as institutional partners, helping connect Kalshi’s off-chain order book with Solana’s on-chain liquidity.

Kalshi’s expansion into blockchain-based trading comes at a time when interest in prediction markets is soaring. Combined trading volume across the industry reached nearly $28 billion by the end of October, with a weekly record of $2.3 billion set during the week of October 20, according to data referenced by Crypto.com’s research group.

John Wang, Kalshi’s head of crypto, said the company aims to tap into the broader $3 trillion digital asset market to scale its offerings more efficiently. The influx of crypto liquidity would provide the depth Kalshi needs to support the rapidly growing appetite for event-driven speculation.

“There are power users in the crypto community,” Wang explained. “This is about accessing the billions of dollars of liquidity in the crypto ecosystem, while also opening the door for developers to build third-party interfaces that operate on top of Kalshi’s liquidity.”

Founded in 2018, Kalshi became the first exchange to offer federally regulated event contracts on U.S. congressional races for American traders. This milestone came in late 2024 after the company won a lengthy legal dispute with the Commodity Futures Trading Commission.

Since then, Kalshi has expanded aggressively, listing approximately 3,500 different markets. A company representative noted that the firm raised more than $300 million last fall at a valuation of $5 billion. The round included major crypto investors such as Andreessen Horowitz and Sequoia Capital. The company has also grown its presence to over 140 countries.

However, the company’s early lead may not be enough on its own. Polymarket’s reentry into the U.S. market introduces new competition, meaning Kalshi must continue to grow and strengthen its liquidity position. According to Wang, the crypto community could play a central role in helping the platform stay competitive.

Digital asset traders are generally more active and trade in larger volumes compared to non-crypto users, which could significantly boost liquidity across Kalshi’s markets. Greater liquidity improves price accuracy, narrows spreads, and ensures that traders can execute orders efficiently.

“If a market lacks liquidity, it can’t really function,” Wang said. “Traders won’t be able to place meaningful orders or get the prices they’re looking for.”

By integrating tokenized trading on Solana and engaging more deeply with crypto-native users, Kalshi is positioning itself to meet the rising demand for prediction markets—while securing the liquidity required to maintain a strong foothold in an increasingly competitive industry.