Kalshi explains $5 billion of identical Ether trades as paid-for market making

Divide the volume by the ticket size. More than $5 billion at roughly $5,500 a trade is about 909,000 fills ^[3][15], which across a month is about 30,300 a day, or one every three seconds in a market that never closes ^[16].

Kalshi's explanation of where those fills come from is specific. In a blog post on Wednesday, the company said the fixed size trades are "entirely consistent with a single maker putting up resting orders of a fixed size and getting traded against by many takers" ^[11]. Hundreds of distinct traders hit those orders, it said, with the takers "pretty consistently right" and the maker "pretty consistently wrong" ^[12]. And it said traders could profit by dealing against a market maker's outdated price when the price moved on other exchanges ^[20].

Kalshi proposes that asymmetry as the test. "This is a sign of genuine economic activity rather than wash (where you'd expect volume to increase without either side taking a profit/loss)," the company said ^[13]. The test works if trading profit is the only thing a taker is playing for. Under the equity-for-volume arrangement The Wall Street Journal described, a trader can lose on the round trip and still finish ahead, so a losing maker and winning takers fits either story ^[9]. The blog post did not address that arrangement ^[8].

The published accounts do not state the size of the monthly cash payments or of the equity opportunity ^[21]. The base is small. A week after launching perpetual futures in May, Kalshi told CNBC that volume had passed $1 billion ^[14]; the clustered Ether trades alone are more than five times that in a month ^[17].

I think a large share of that $5 billion is incentive-dependent. The way to settle it is dull: net taker profit and loss after cash rebates and equity awards, and whether the accounts hitting the volume targets are the same accounts trading against the maker. The counter-thesis belongs to Kalshi, and its head of communications, Elisabeth Diana, gave it plainly. She called the discourse "rumors seeded by competitors" ^[6], and told Cointelegraph, "We have not been contacted by the CFTC and don't believe there is any formal examination" ^[5]. Fixed-size resting orders hit by hundreds of takers are ordinary market structure. If the incentive payments turn out to be small next to the takers' trading gains, Kalshi's reading holds and the pattern is what the company says it is.