Prediction markets may be booming, but that’s not what’s sent Rain Protocol’s native token soaring 100% over the last 4 hours.
On Monday, Enlivex, a Nasdaq-listed biopharma company, said it would acquire $212 million of Rain, the native token of the Rain Protocol.
The company said the goal is to “drive shareholder value by becoming the largest corporate holder of Rain and activating it for yield.”
Enlivex plans to sell 212 million shares at $1 apiece to fund the purchase of the token.
Rain is a $1.8 billion prediction market protocol launched on the Arbitrum blockchain in 2023.
Centre stage
The deal arrives at a time when prediction markets are in the spotlight amid rising investor interest and regulatory scrutiny.
Earlier this month, Kalshi raised $1 billion in its latest funding round from investors including Sequoia, CapitalG, and Andreessen Horowitz, which upped its valuation to $11 billion.
Polymarket, Kalshi’s arch-rival, also recently closed a $1 billion funding round, which valued it at $8 billion pre-money.
Both platforms have seen a bump in popularity since they began allowing users to bet on elections and sporting events. Last quarter, major platforms cleared $3 billion in trading volume, more than five times the volume recorded in the previous year.
Prediction markets have generated over $28 billion in trading volume this year and are projected to reach $95.5 billion in the next 10 years.
Regulators circle
That growth could be propelled by new entrants backed by major players, including the CME Group and Crypto.com.
Still, there are reasons to believe that growth may slow.
In the US, where Kalshi has been allowed to operate after a lengthy legal battle with the Commodities and Futures Trading Commission, state gaming regulators are pushing back against these platforms.
That’s because they allege they operate as unlicensed gambling platforms.
Kalshi has received at least seven cease-and-desist orders from state regulators this year. The company contests these orders, arguing that they are federally regulated and that state regulators lack the authority to issue them.
Polymarket is banned in Romania, but the platform is set to re-enter the US market following its 2022 ban.
On November 25, it received CFTC approval to operate its platform in the US.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at [email protected].
