Prediction markets celebrated a record $179.6 billion in trading volume in the third quarter. Still, a look beneath the headline figures reveals that actual capital deployed was less than a third of that total.

According to the data from Prediction Frontier, traders paid just $56.1 billion for those contracts, with the massive $123 billion gap driven by how venues count low-cost multi-leg "combos."

The report, covering Kalshi, Polymarket’s international and US venues, and Novig, reflects the gap, created by the counting specifics: cheaper combinations of outcomes generate substantial payout-based volume from comparatively small purchases.

The report counts each traded contract at its $1 payout value, a convention Kalshi also uses in its reporting. Its alternative measure, “dollars paid”, multiplies the number of contracts by their execution price.

Buying 100 contracts for three cents each therefore produces $100 in nominal volume and $3 in purchase payments.

Combos widen the difference by combining several outcomes in one position. Under Kalshi’s rules, a combo pays $1 when every component settles at $1; any component settling at zero makes the whole contract worthless.

Low-priced combinations consequently generate more nominal volume per dollar spent on prediction markets.

Neither volume measure represents fresh deposits: contracts can trade repeatedly, and traders can reuse funds.

Kalshi combos accounted for $67.1 billion of quarterly nominal volume, which is more than a third of the four-venue total. On Kalshi, the average purchase payment per $1 contract fell from 32 cents in July to 24 cents in September.

Source link