Prediction markets show stronger retention than most DeFi, wallets and exchanges

Polymarket, one of the leading prediction markets, outperforms more than 85% of crypto protocols in user retention, according to Dune Analytics’ December 2025 report.

Prediction markets have been racking up big numbers for the past 2 years, with their monthly notional volume on platforms soaring from under $100 million to over $13 billion, a staggering 130-fold increase. 

Since early 2024, prediction markets have seen dramatic expansion in total volume and number of participants. Transactions surged by 180 times from 240,000 to more than 43 million, while monthly active users grew from 4,000 to 612,000, a 150-fold jump. 

Polymarket alone processed 95 million trades over this period, accounting for roughly 54% of cumulative market activity. Monthly trades on Polymarket increased from 45,000 to about 19 million on the backdrop of pronounced spikes between the 2024 US presidential election and October this year.

Polymarket, Kalshi build up market with category-based predictions

Looking at Dune prediction market 2025 analysis, the sports category made up 39% of Polymarket’s volume, politics 34%, and crypto 18%, collectively taking 90% of total notional volume. Kalshi, on the other hand, was sports-dominated, a category that accounted for about 85% of its volume. 

Economics volume surged by ten times on Polymarket and 905% on Kalshi, while tech & science grew 1,700% on Polymarket. Open interest on both platforms stemmed from economics’ 700% and social & culture’s 600% uptrend.

Dune Analytics explained how the resurgence of prediction markets came from the University of Iowa in 1988. Economists launched the Iowa Electronic Markets, a real-money platform that could forecast political events. 

Over several US presidential election cycles, the IEM consistently outperformed traditional polling, correctly predicting outcomes in roughly three-quarters of observations, both far in advance of election day and during the final week.

In the early 2000s, North American Derivatives Exchange, Inc. (NADEX) became the first CFTC-regulated prediction market trading contracts on financial indicators like the Consumer Price Index. NADEX established a compliant framework for event-based contracts in the US and later became the legacy exchange acquired by Crypto.com in 2022. 

The 2020s welcomed new entrants Polymarket, Kalshi, Crypto.com, Limitless, and MYRIAD, all of which now use blockchain technology, oracles, in tandem with the US regulatory clarity fronted by US President Donald Trump’s pro-crypto administration.

US Presidential elections started prediction market demand

During the 2024 US presidential election, Kalshi and Polymarket generated over $4.5 billion in volume during the month alone, with Polymarket drawing 93% of that trading. After the election, monthly trading cooled to $1.5–2 billion, likely because there were no impending “mainstream” events to place bets on.

By mid-2025, both platforms had expanded their distribution channels and media coverage by adding several other categories and event types. Partnerships with outlets and organizations, including Google Finance, CNN, CNBC, UFC, Yahoo, Robinhood, and the NHL, extended their reach into finance and entertainment. 

Polymarket secured up to $2 billion from Intercontinental Exchange at an $8 billion valuation, while Kalshi raised $1 billion at an $11 billion valuation, and both markets are now available in more than 140 countries.

“When election odds or event probabilities appear alongside traditional financial data, prediction markets start becoming a core part of how people understand what’s happening in the world. That unlocks entirely new demographics,” said Lee Poettcker, Product Manager at UMA.

Polymarket participants have been consistent in predicting and correctly pricing outcomes, achieving a 90–95% success since its inception. 

In many categories, Polymarket and Kalshi aggregate dispersed information into single, tradable signals that collect enough intelligence to anticipate real-world events. The former recorded roughly $21.5 billion in notional volume, with Kalshi accounting for $17.1 billion since January this year. 

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