High-speed feeds meet legal headwinds
Prediction market Kalshi is pushing the boundaries of crypto trading infrastructure by launching a real-time, machine-readable data feed in partnership with Solana-based DoubleZero.
At rollout, the feed includes crypto perpetual futures and derivatives, with sports accounting for 37.8% of Kalshi’s weekly notional volume, crypto at 20.3%, and exotics making up 39.4%, based on Dune analytics. For context, Kalshi reported $148 billion in total volume this year, a number that dwarfs niche contracts like flight cancellations, which saw only $1,842.48 in aggregate dollar volume and 1,120 contracts in open interest before being paused.
The DoubleZero Foundation announced the integration with Kalshi in an emailed statement on Wednesday.
On paper, Kalshi’s technological leap mirrors traditional finance’s high-speed data access, but it faces a regulatory climate that remains uncertain.
Wall Street tech, crypto market frictions
DoubleZeroEdge acts as a transport layer that broadcasts both exchange and onchain data simultaneously to all connected traders over dedicated fiber lines. This approach is common among institutional players in equities and derivatives but relatively new in crypto markets, where most traders still rely on standard internet connections. The DoubleZero Foundation claims this setup will provide a “complete picture” of Kalshi’s prediction markets to professional traders seeking pricing signals and hedging opportunities on Solana.
The move positions Kalshi as one of just two global leaders in prediction markets alongside Polymarket.
However, the benefits for trading firms come with new risks: as Kalshi expands its product set and distribution channels, it draws increased scrutiny from both competitors and regulators—especially when event contracts brush up against gambling laws or intellectual property disputes.
Lawsuit dropped, regulatory heat remains
Legal challenges have become routine for Kalshi in 2024. FlightAware—the world’s largest flight-tracking platform—filed a lawsuit against Kalshi in New York federal court this July, accusing it of using FlightAware’s data and trademark without permission to run airline cancellation bets. Yet just one day after filing, FlightAware voluntarily dismissed the case “without prejudice,” leaving open the option to refile but signaling limited traction for the claim so far.
Despite this swift withdrawal, regulatory pressure persists. In March, Nevada issued a temporary ban on Kalshi; by late June, a Michigan judge blocked state residents from betting on sporting events via the platform. Kentucky followed suit by suing five prediction market operators—including Kalshi and Polymarket—alleging they ran unlicensed sports betting businesses. These actions underscore how state-level authorities are testing whether federally regulated event contracts fall under their jurisdiction or are preempted by national law.
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Contract volumes soar, scrutiny too
The contrast between headline-grabbing lawsuits and actual contract activity is stark: while FlightAware’s complaint centered on flight cancellation bets that attracted just over $1,800 in total trades before being paused due to concerns about malicious activity online, Kalshi’s broader market posted $148 billion in volume this year alone. This scale has attracted not only trading firms seeking new signals but also regulatory agencies eager to assert oversight over fast-growing event-based derivatives.
According to coindesk.com, New York has requested at least $36 billion in compensatory damages from Kalshi as part of an ongoing lawsuit alleging illegal gambling operations tied to sports and cultural events offered within the state.
Where Kalshi faces its toughest test
The Commodity Futures Trading Commission (CFTC) recently invoked emergency powers to keep Kalshi operating even as New York sought a restraining order to halt its event contracts statewide. A federal judge denied Kalshi’s request for an injunction on July 7th—finding that New York gambling laws were not clearly overridden by federal commodity rules at this stage—but also left open further arguments as litigation continues.
For now, trading firms can tap into real-time prediction data via DoubleZero Edge subscriptions and seek new market edges. But with states seeking penalties of up to three times alleged gains plus $100,000 per unauthorized wager offer—and with federal regulators asserting exclusive authority—the future of large-scale event contract markets like Kalshi remains anything but settled.
The Main Points
- •Kalshi launched a real-time data feed for crypto perpetuals and sports via Solana-based DoubleZero on Wednesday.
- •Sports represent 37.8% and crypto 20.3% of Kalshi’s weekly notional volume, per Dune analytics.
- •In 2024, Kalshi faced lawsuits (e.g., FlightAware) and regulatory actions in Michigan, Kentucky, Nevada, and New York.
What could shape the next move
If New York’s requested temporary restraining order is granted in the ongoing lawsuit filed on July 31, Kalshi would be barred from offering contracts tied to sports, culture, elections, and other events in or from New York or to people in the state, immediately restricting its market access there; whether this order will be issued remains unclear.
