Original | Odaily Planet Daily (@OdailyChina)
Author | Azuma (@azuma_eth)
Last week, Odaily Planet Daily published an article titled "The First Prediction Market Concept Stock Has Emerged!", which mainly discussed how Robinhood is intercepting orders, which previously needed to be executed via Kalshi, by building its own prediction market, Rothera. This allows Robinhood to reduce revenue sharing with Kalshi and retain profits within its own ecosystem.
Although we anticipated that Rothera wouldn't face the cold start problems common among other competitors, its data performance over the past week still far exceeded our initial expectations. It's hard to imagine that a platform launched just half a month ago could directly soar to third place in the highly competitive prediction market sector, trailing only behind the two giants, Kalshi and Polymarket.
Data from Artemis shows that for the week ending June 8th, Rothera, as a new platform, had a weekly trading volume of only $21.9 million, still lagging significantly behind second-tier platforms like Opinion, Predict, and Limitless. However, for the week ending June 15th, Rothera's weekly trading volume directly jumped to third place in the industry, reaching $276 million. In the latest week ending June 22nd, Rothera's weekly trading volume increased to $559 million, nearly one-fifth of Polymarket's volume.
A Case of Atypical Growth (Can skip if you read the previous article)
It's important to clarify that Rothera's rise is essentially not driven by creating new incremental users (though some users may have joined due to the World Cup), but rather by the migration of existing orders, not the creation of new users.
Over the past year or so, Robinhood has been one of the most important distribution channels for Kalshi. Leveraging tens of millions of retail users and established stock, options, and cryptocurrency trading gateways, Robinhood directed a large volume of orders to Kalshi. Piper Sandler analysts previously estimated that trades completed through the Robinhood channel accounted for about 25%-35% of Kalshi's total trading volume.
The issue was that while these orders originated from Robinhood users, they didn't belong to Robinhood itself. Under the previous partnership model, Robinhood functioned more as a front-end traffic portal, while Kalshi was the infrastructure provider responsible for order matching, clearing, and settlement. Revenue generated from each trade needed to be shared between the two parties.
Rothera is Robinhood's weapon to break this revenue-sharing model. Since early this month, Robinhood has begun migrating some World Cup-related event contracts to be executed internally on Rothera. This means that a significant number of orders that might have previously flowed to Kalshi are now retained within Robinhood's own ecosystem.
Therefore, in a sense, the surge in Rothera's trading volume is less of a threat to other prediction markets like Polymarket, Predict, or Limitless, and more of a direct "siphon" of volume from Kalshi.
Robinhood's Value Capture
The most direct impact of Rothera's rapid growth is the strengthening of Robinhood's ability to capture value from prediction market-related orders on its platform.
According to Hood House, an investment research media outlet that has long tracked Robinhood, statistics based on public data show that as of June 20th, Robinhood's prediction market business collectively traded 34,700 contracts in a single day, corresponding to an estimated daily revenue of about $4.9 million.
Hood House subsequently disclosed their calculation logic:
- Rothera (primarily hosting World Cup-related markets) achieved a daily trading volume of 137 million contracts, corresponding to a trading value of approximately $47 million.
- As a comparison, Kalshi's total daily trading volume was about 1.5 billion contracts, corresponding to a trading value of approximately $416 million. Excluding World Cup-related markets, Kalshi's trading volume was about 1 billion contracts, corresponding to a trading value of about $260 million.
- Considering that Robinhood users are still estimated to contribute around 20% of Kalshi's non-World Cup market trading volume (conservative estimate), this means that approximately 210 million contracts and $52 million in trading volume from Kalshi's non-World Cup event contracts were completed through Robinhood.
Based on this, Hood House further made an aggressive projection, stating that if this growth rate continues, Robinhood's prediction market business has the potential to achieve revenue on the scale of billions of dollars this year. This figure even surpasses the historical peak of Robinhood's cryptocurrency-related revenue, which was approximately $900 million in 2025.
Kalshi's Counter Strategy: Finding New Channels
Faced with Rothera's rapid rise, Kalshi has clearly recognized the problem.
For Kalshi, Robinhood was both a partner and one of its most important sources of traffic. However, as Robinhood begins migrating more and more orders to its own platform, the relationship between the two has shifted to direct competition.
Recent news disclosed by The Information might reveal Kalshi's response strategy. Sources familiar with the matter revealed that Kalshi has begun early, informal discussions with several investment banks regarding a potential future IPO. More notably, Kalshi has made a specific demand in its communications with these banks: to be prioritized for underwriting roles in the future IPO, these institutions need to prioritize completing technical integration of their systems with Kalshi. This would enable their institutional clients to directly participate in trading event contracts on Kalshi's platform.
In other words, Kalshi is using the prospect of an IPO as an opportunity to seek new distribution channels, aiming to integrate prediction markets into the client networks of banks, brokerages, and other financial institutions. This might also represent a subtle shift in the competitive dynamics of the prediction market industry. In the past, the focus was on who could offer more contracts or design better products. Now, as prediction markets gradually integrate into the mainstream financial system, the focus of competition is shifting to another dimension: those who control the user gateway can more effectively control value.
The rise of Rothera has already demonstrated the significance of distribution capabilities. Swooping to third place seems effortless, and challenging Kalshi and Polymarket in the future might not seem like such a difficult task.
