Crypto exchanges have been dealing with tough market conditions lately that are putting a serious damper on trading activity.

They’ve increasingly been looking to supplement their main income sources with action from prediction markets, viewing event contracts as a powerful extension of existing speculative offerings that can drive engagement, diversify revenue, and deepen user retention.

Prediction markets had become even more impossible to ignore in recent months.

Kalshi, whose prediction market backend powers event contracts for numerous third-party exchanges, reported more than $1.8B in trading volume tied to the “March Madness” collegiate basketball tournament, more than three times the activity it experienced on…