Kalshi plans to end its Volume Incentive Program no earlier than Oct. 13, removing a reward system that has paid eligible traders according to their share of trading activity on the platform’s central limit order book, according to a notice filed with the Commodity Futures Trading Commission on Monday.
The planned wind-down arrives as trading activity in Kalshi’s ether perpetual futures market has drawn public allegations of wash trading and reported regulatory attention. Kalshi has denied that wash trading occurs on its platform, while the CFTC has not publicly announced an enforcement action or investigation tied to the claims.
Kalshi’s filing does not link the decision to discontinue the volume program with the ether-perpetuals allegations. Yet ending a scheme designed to reward transaction volume reduces the need to distinguish between activity that improves order-book liquidity and activity that merely increases the number of matched contracts.
Volume rewards to end after Oct. 13
Kalshi introduced the Volume Incentive Program in March 2023, according to an earlier filing with the CFTC. The exchange said the initiative was intended to increase liquidity and improve price efficiency by rewarding participants for eligible volume.
The program applied to trades made through Kalshi’s central limit order book, where buy and sell orders are displayed and matched at set prices. Eligible event-contract trades were generally priced from $0.03 to $0.97, according to the latest filing.
Under the arrangement, participants received payments from designated reward pools based on their percentage of qualifying volume. Such programs can encourage market makers and active traders to quote more frequently, particularly in markets where order books may otherwise be thin.
They can also create incentives to maximize turnover rather than hold exposure. That distinction has become more relevant as prediction-market platforms expand into products linked to crypto prices and other rapidly moving markets, where a small number of repeated trades can produce large reported volume figures.
The filing says the program will end no earlier than Oct. 13. Kalshi also maintains a separate rebate program for certain self-clearing members that repays net maker and taker fees. Revised terms for that fee system are due to take effect no earlier than the second week of October.
The two programs serve different functions. A volume incentive rewards a share of completed eligible trading activity, while maker and taker rebates affect the direct cost of placing or executing orders. Kalshi’s notice does not specify whether the end of the volume program will change spreads, order-book depth, or total fees for ordinary users.
Ether perpetuals activity drew scrutiny
The change follows allegations concerning unusually high turnover in Kalshi’s ether perpetual futures contracts. An X account using the name Beni claimed that the platform’s ETH perpetuals pair recorded about $539 million in 24-hour trading volume against roughly $3.1 million of open interest.
Open interest measures the outstanding value of contracts that remain open, rather than contracts that have already been closed or offset. A large gap between daily volume and open interest can occur in liquid short-term markets, but it can also draw attention when the same trades or order sizes appear repeatedly.
The Wall Street Journal reported last week that the CFTC was examining trades after allegations that transactions of about $5,500 were repeatedly executed, boosting reported ether perpetual futures volume. According to the Journal, those trades accounted for more than $5 billion of ETH perpetuals volume over the preceding month.
Kalshi responded in a blog post last week that it was not under investigation over the matter. The company said wash trading does not occur on its platform and described the repeated prints as the result of market makers posting fixed quotes that were repeatedly hit by faster traders.
Wash trading generally refers to transactions that create an artificial appearance of market activity without a genuine change in economic exposure. The practice can mislead participants about liquidity or demand and is prohibited in regulated derivatives markets.
The competing explanations matter because repeated trades can look similar in raw market data even when their causes differ. A market maker maintaining a standing quote may generate frequent matched trades as other participants take that price. Deliberate self-dealing or coordinated trading, by contrast, would raise issues about whether volume reflects genuine interest.
Rapid expansion raises the stakes for market quality
Kalshi’s trading activity has grown sharply in recent months, according to a public dashboard series that aggregates volume across Kalshi, Polymarket and Polymarket US. The series showed $52.98 billion in monthly volume for September as of Sept. 29, exceeding the $38.67 billion recorded in August, though September’s tally was not yet final.
The figures illustrate how quickly prediction-market activity has moved from a niche segment of derivatives trading into a market attracting institutional products and substantial private-market interest. High volume can improve price discovery when it comes from varied participants taking independent views. It is less informative when much of the turnover is generated by a narrow set of repeated strategies.
Ark Invest has disclosed direct exposure to Kalshi through its ARKK, ARKW and ARKF exchange-traded funds. Ark Invest said in an X post that it sees a medium-term prediction-market opportunity of between $1 trillion and $5 trillion in annual volume. The firm did not disclose the size of each fund’s Kalshi position in the material referenced in the announcement.
Reuters also reported Tuesday that Kalshi was in advanced talks to raise about $1 billion at a valuation of roughly $40 billion. Neither the company’s reported fundraising discussions nor Ark Invest’s disclosure changes the immediate issue facing the platform: preserving credible liquidity metrics as its markets draw more attention.
Ending volume-linked rewards would leave Kalshi’s order books more dependent on organic demand and on the economics of its remaining fee and rebate arrangements. Traders in its more active crypto-linked contracts will be watching whether quoted depth and spreads hold up once the volume program is withdrawn.
Explore structured event wagers and prediction markets with Toobit’s event contracts guide for deeper context on Kalshi’s shift.
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