Host Laura Shin interviews John Wang, Head of Crypto at Kalshi, the largest prediction market in the US. John leads Kalshi's push into crypto-native products and on-chain expansion, and joins the show to discuss the company's landmark launch of the first US-regulated crypto perpetual futures.

The conversation covers how perpetual futures work and why Kalshi chose them as its first non-prediction-market product, the CFTC regulatory framework underpinning the offering, and how leverage limits and risk models are determined per asset. John also addresses CME CEO Terry Duffy's criticism that crypto perps are 'a disaster waiting to happen,' and explains Kalshi's multi-layer margin and guarantee fund protections.

Additional topics include Kalshi's institutional traction with firms like ARCA and Galaxy, the competitive landscape against Hyperliquid, Coinbase, Kraken, Robinhood, and Polymarket, insider trading safeguards, the Solana tokenization experiment with Dflow, and the company's roadmap following its $1 billion fundraise at a $22 billion valuation.

What Crypto Perps Are and Why Kalshi Launched Them

Perpetual futures are described by John as 'the most pure trading instrument' — allowing traders to go long or short on an asset's price with no expiration date, avoiding the roll-over costs of traditional futures or options.

Unlike standard futures or options that expire on a set date, perps let traders hold positions indefinitely, reducing friction and cost for active traders.

Kalshi chose crypto perps as its first non-prediction-market product for the same reason it entered prediction markets: both originate from academic work by Nobel Prize-winning economists and represent powerful financial instruments with strong user demand that lacked a regulated US home.

The offshore perps market is $90 trillion in size. John frames the US domestic opportunity as 'inning zero,' estimating only 0.2–0.5% of Americans have ever used perpetual futures.

Kalshi's crypto prediction markets have grown 15x since the start of 2025 and generate $2–3 billion in monthly volume, making crypto the platform's second-largest category before perps were even added.

How Leverage Limits, Pricing, and Risk Models Work

Leverage maximums are not round numbers because they are dynamically set by Kalshi's risk engine based on historical volatility, market conditions, and liquidity scenarios for each asset — then reviewed and approved by the CFTC.

Bitcoin: ~6x, ETH: ~4.4x, HYPE: ~2.1x as examples of the asset-specific outputs.

Index pricing is powered by CF Benchmarks, a regulated benchmark provider that aggregates prices across multiple CFTC-regulated US exchanges. For perpetual markets, Kalshi uses a 60-second time-weighted average price.

CF Benchmarks publishes a 30-page methodology document covering its price aggregation approach, designed to be as tamper-proof as possible — the same infrastructure already underpinning Kalshi's crypto prediction markets.

Kalshi launched publicly with Bitcoin, then expanded to ETH, SOL, XRP, DOGE, HYPE, SUI, LINK, Bitcoin Cash, Shiba Inu, and Litecoin. New assets within already-approved classes can be self-certified and added quickly; new asset classes require a formal 40.3 CFTC filing.

Auto-Deleveraging, Liquidations, and Retail Risk Protections

Kalshi employs a multi-layer margin model anchored by a guarantee fund — capitalized by exchange members and Kalshi itself — that absorbs losses during volatile liquidation scenarios before auto-deleveraging of profitable traders would occur.

John contrasts this with offshore venues like Hyperliquid, where auto-deleveraging can forcibly close the most profitable positions first during extreme market stress.

Retail safeguards built into the Kalshi interface include: take-profit and stop-loss settings at order entry, isolated margin as the default position-sizing mode, and a real-time 'health factor' indicator that alerts traders when a position is at risk.

Segregated customer accounts and a clearinghouse are also required components of Kalshi's CFTC-regulated structure, adding further layers of protection absent on most offshore platforms.

Responding to CME CEO Terry Duffy's 'Disaster' Warning

Terry Duffy, CEO of CME Group, stated: 'I believe the market has been supplanted by the speculation market, and that does not suit anyone's interest,' warning that extreme leverage and automatic liquidations in crypto perps will hurt retail investors.

John's rebuttal: Kalshi operates under the same CFTC regulatory framework as CME and CBOE, and the leverage levels on Kalshi's perps are actually lower than leverage available on existing CME and CBOE futures products.

John also notes that Kalshi hired a risk manager from CME, signaling that it is drawing on established industry expertise rather than reinventing risk management from scratch.

Institutional Adoption and the Competitive Landscape

ARCA, Galaxy, and an undisclosed counterparty conducted large block trades and OTC trades priced using Kalshi's Clarity Act odds, using prediction market probabilities to hedge crypto portfolio exposure — a publicly disclosed institutional use case.

Kalshi has integrated with FCMs, prime brokerages, and trading terminals used by large hedge funds, allowing institutions to access Kalshi through existing infrastructure and workflows rather than onboarding to a new platform.

On the competitive landscape, John draws a distinction between Kalshi and Hyperliquid: 'They're obviously more of an on-chain, no-KYC, kind of very innovative platform. Whereas for us, we try to package these very powerful products in a way that normal users can use and large US institutions can utilize.'

Other players entering US perps include Coinbase (pre-existing perp-like product), Kraken (acquired Bitnomo), Robinhood, and Gemini — but John frames the market as positive-sum given how early adoption is.

Kalshi raised $1 billion led by Coatue in May 2025 at a $22 billion valuation. John describes the roadmap as expanding institutional adoption, growing the perps product, adding brokers, and iterating on the exchange based on user feedback.

Insider Trading Safeguards and the Polymarket Rivalry

Kalshi partners with IC360 and similar providers to maintain blocklists of athletes, coaches, congressmen, and campaign staff who are prohibited from trading on related event markets, proactively preventing insider trading rather than only detecting it retrospectively.

KYC requirements — mandated by Kalshi's CFTC-regulated status — are cited as a structural advantage over offshore prediction markets like Polymarket, which John implies suffer more insider trading due to the absence of identity verification.

On allegations that Kalshi spied on Polymarket's roadmap and pre-empted its perps announcement, John says the perps launch date was leaked by a journalist without Kalshi's intent: 'It seemed like it was kind of the other way around' — Polymarket announced hours after the leak, not before.

Solana Tokenization Experiment and On-Chain Strategy

Third-party provider Dflow tokenized Kalshi event contracts on Solana, integrating them into wallets like Phantom and Solflare and trading interfaces like Jupiter — but John reports most users still prefer trading directly on Kalshi's native interface.

Kalshi also distributes through broker integrations with Robinhood and Coinbase, allowing users to access Kalshi markets from their existing home apps while more active traders migrate directly to the Kalshi platform.