Alliance Co-Founder Warns Kalshi’s Crypto Perpetuals Could Drain On-Chain Liquidity

Alliance co-founder Imran Khan has raised concerns about the potential impact of Kalshi’s newly launched crypto perpetual futures products, suggesting they could reduce liquidity across decentralized finance (DeFi) ecosystems.

Although Khan did not directly mention Kalshi by name, his comments came shortly after the regulated prediction market platform introduced perpetual futures trading for Ethereum (ETH), XRP, and Solana (SOL). Kalshi launched ETH perpetual futures on June 4, followed by XRP and SOL perpetual contracts on June 10, after securing approval from the U.S. Commodity Futures Trading Commission (CFTC).

In a recent post on X, Khan argued that products offered by regulated off-chain platforms may divert traders and capital away from decentralized exchanges and on-chain trading venues. He specifically referenced platforms such as Hyperliquid and Polymarket, which rely heavily on blockchain-based liquidity.

According to Khan, every new crypto derivatives product introduced by platforms like Kalshi risks shifting trading activity away from blockchain networks. He emphasized that the primary concern is not where trades occur, but where liquidity, settlement data, and user activity ultimately reside.

Khan noted that DeFi thrives when assets, positions, and liquidity remain on-chain because developers can build innovative applications around transparent blockchain data. When activity moves to closed or centralized ecosystems, the composability that drives crypto innovation becomes more difficult to maintain. As a result, network effects that typically benefit decentralized platforms may weaken.

Kalshi has recently expanded its crypto offerings beyond ETH, XRP, and SOL. The company also received approval for Hyperliquid perpetual futures and plans to introduce additional contracts tied to Stellar (XLM), Dogecoin (DOGE), Shiba Inu (SHIB), and Hedera (HBAR).

While Khan acknowledged that platforms like Kalshi could help bring perpetual futures and prediction markets to a broader audience, he questioned whether the resulting liquidity would benefit decentralized markets. He also warned that successful on-chain financial products could eventually be replicated by regulated off-chain competitors.

Kalshi continues to strengthen its position in the U.S. market with CFTC support. The regulator recently filed a lawsuit against New Mexico over restrictions related to sports prediction markets offered through the platform.