"We Want to Be Bigger Than the CME" | Kalshi's John Wang

**David** (0:03)
Bankless Nation, I'm here with John Wang from Kalshi. John, welcome to the podcast.

**John Wang** (0:07)
Thank you for having me.

**David** (0:09)
John, is Kalshi a crypto company?

**John Wang** (0:12)
I think so, yeah. I think in the crypto world, like there's obviously an on-chain definition, like on-chain or crypto company. I don't think we're an on-chain company by any means, and there are on-chain prediction markets out there for sure.
But crypto is our second-largest business line behind sports. We have 90% market share in the crypto predictions world.
A lot of our biggest partners are in the crypto industry, like Coinbase, Robinhood Crypto, like Phantom and some others. They route their orders and trades through us. And so I think we're pretty deeply embedded in the industry, and that's pretty much what my role is, is to help us get even deeper.

**David** (1:02)
Okay, so crypto is like there's the crypto sphere of influence. And I think what you're saying is Kalshi is somewhat inside the crypto sphere of influence in a number of different ways. But you're distinguishing it from Kalshi is not an on-chain company. Does Kalshi want to be an on-chain company?

**John Wang** (1:18)
Ultimately, we just want to build products that are super easy to use and accessible to people, like normal people that don't necessarily are necessarily super experts in crypto.
And so, our approach has always been to go the regulated route. I think US regulations are heading more towards being on chain with all the different legislature that's coming out.
But at the current state of US regulations, like it's not compatible. I think in several years, that's somewhere where we want to get to. But product wise, I think the products that we've been building have been either like around trading crypto, for example, the largest crypto companies in the world, I would say are like Binance, Coinbase, Kraken.
These centralized exchanges, they are all about allowing their users to trade the price of crypto. And that's pretty much what our crypto prediction markets offer to our users. We also have our new regulated perps offering, which is the first regulated perpetual futures exchange in the US. That's like the first time essentially you have a perp app on the app store. You have your legal no VPN access for normal US users. Kind of like your mom, your cousin, even like your friend could access it. And also US institutions can compliantly access it via the type of infrastructure that they utilize. Also, I think the deposits and withdrawals aspects of being like a centralized exchange is a large reason why many people still use centralized exchanges. And for us, crypto is an important rail for depositing and withdrawing from the platform. So obviously, we have the ability to just deposit with drawer, stable coins or crypto assets in the US., but internationally, we're open in 140 countries. The crypto rail is the only rail that we currently accept for people to come into platform, put their money in. Because we found it's the most frictionless way to get global monetary access and sort of the most frictionless way to convert from the local currency to the actual US dollar that we accept.

**David** (3:56)
I see, I see. So for Kalshi to accept international customers, the only on-ramp that's viable and easy to integrate is like the stable coin or local stable coin, local fiat stable coin on-ramp into Kalshi. How much of Kalshi's business volume and trading volume is from outside of the US.? Like how dominant is that side of Kalshi?

**John Wang** (4:18)
Yeah, we're still predominantly a US company in terms of user base, but I think the international side is a huge focus of ours.
We are taking a somewhat unique approach there, which is obviously like even in the US., there's these two parts to growing a prediction market, you know, six, seven years ago, which is you go offshore and you kind of take the unregulated route or you go onshore and work with the regulators in the US. And kind of like that's like the really hard hard path, right? Like spending years just doing legal stuff while like shipping a product in beta and not even being able to market it and such. So we're kind of taking a similar long long term approach to international markets as well. Where we're working with like either the regulators or like the largest brokers in each country to sort of embed our prediction markets inside their products. Similar to how we've been embedding them into Robinhood Coinbase. And so we've been able to secure deals with like Wealthsimple in Canada or like XP, which is the largest broker in Brazil. So overnight, like it's the long game, but overnight we can essentially unlock like the entirety of the country's tradable like trader user base.