# Cryptocurrency # Coin圈 On one side, it’s racing to a $40 billion valuation; on the other, it cuts the volume-pumping rewards a full year early. Kalshi’s move is certainly intriguing. You could say it’s short on money—because it’s currently pitching a $40 billion funding story. But if you say it’s not short on money, then it’s precisely the Volume Incentive Program that was originally scheduled to run until October 1, 2027 that it decides to terminate early, no earlier than October 13. Nearly a whole year—cut it if you want. Is this proactive “weight loss,” or passive damage control? Let’s break this down piece by piece. First layer: the technical angle. Researchers have their eyes on Kalshi’s perpetual contract market and found that repetitive trades tied to fixed amounts—like orders around roughly $5,500 for Ethereum perpetuals—keep showing up again and again. Note: repeatedly, not just occasionally. This kind of pattern, in data from any trading platform, tends to get the same label: wash trading / volume pumping. That’s because normal users’ trading behavior is scattered and random, whereas fixed amounts, fixed cadence, and trades that keep recurring look more like machines completing a certain KPI. Researchers wouldn’t be looking at it without reason. Second layer: the funding/market-making angle. Kalshi denies the volume-pumping accusations, claiming the explanation is that market makers placed fixed-size quotes that were repeatedly consumed. Does that explanation hold water? Partly, yes. Market makers do use fixed-size quotes. After their quotes are taken, they re-post them, and the cycle repeats; in the data it can look like repeated trades. The issue is that regulators have indeed reviewed these trading patterns. And note: reviewed. What does that mean? It means the explanation didn’t fully dispel public doubts, otherwise there wouldn’t have been follow-up regulatory actions. Denial is denial, and review is review—both happening at the same time already suggests that the market’s suspicions aren’t groundless. Third layer: the macro picture. The prediction market sector is booming—that much is true. But concerns about trading quality are growing, too. A $40 billion valuation funding story needs more solid data support. If your valuation reaches $40 billion, investors aren’t just looking at how many trades you have; they’re looking at how much genuine demand there is behind those trades. If the volume includes “water,” then your valuation is like a castle built on sand. Kalshi clearly understood this, so it did something: shifting from broad subsidies to targeted incentives. In plain terms: instead of throwing money at volume, it chooses when and where to give. Is this clever? It is. But whether the market buys it is another question. Now we reach the reversal. Many people see Kalshi cutting rewards and their first reaction is that it’s backing down—that volume pumping was caught, and the valuation story can’t be sustained. But look at it another way: cutting volume-pumping rewards a year early might be exactly what it’s doing to actively squeeze out the “water.” If it continued subsidizing all the way to 2027, the trading volume data would look even better and the funding story would be easier to tell. Yet it stops right at this point. That suggests it may have already gotten what it wanted, or that it believes further pumping would end up damaging its own brand. By shifting from broad subsidies to targeted incentives, Kalshi clearly wants to control how it spends money—but will the market accept it? So the question circles back: in prediction markets, how much of the trading volume is truly driven by real demand? If volume collapses after Kalshi cuts rewards, the answer will be awkward. If volume holds steady, then it suggests the earlier subsidies genuinely attracted a group of real users. A $40 billion valuation isn’t the end—it’s the beginning of a major test. Do you think Kalshi’s move is proactively squeezing out the “water,” or passively cutting losses? Let’s discuss in the comments. 👉 Click to enter my chat room and get the latest strategies!