With monthly notional volume jumping from $6.57B in December 2025 to $40.0B in August 2026, more than 6x in nine months, Kalshi’s growth looks spectacular. But this figure hides another reality.

A reality very similar to TVL, which was once DeFi’s default activity metric before the market realized it didn’t always reflect actual usage or revenue. For Kalshi, it all comes down to the word notional.

When a contract settles, Kalshi counts $1 of notional volume per contract, regardless of the price actually paid by the taker. This means that whether a contract changes hands at $0.25 or $0.75, it still contributes $1 to reported notional volume.

Actually, notional reported volume combines two things: the trader’s cash and the collateral posted by the counterparty, which most of the time comes from a market maker rather than another trader. Said differently, notional includes the liquidity supporting the trade, not just the capital actually deployed by traders.

And by looking at trader activity, the picture is clear: in November 2025, every $100 of Kalshi notional carried $47 of trader cash (a standard figure we would expect). By September 2026, it carried just $23.

The ratio has declined throughout the year, and nothing in the data or recent developments suggests it has reached a floor. Is that a problem? Not necessarily. However, relying on notional alone can overstate underlying activity and give investors and users the wrong picture on who is actually leading prediction markets.

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