An analysis of 5.35 million ether perpetual trades on Kalshi between 1 August and 30 September found that orders within $50 of six dominant sizes accounted for $9.81 billion of $17.56 billion in notional, or 55.9%. In September the concentration rose to 61%. The dominant size changed five times: $5,000, $4,000, $4,500, $5,500, $5,425 and $4,025. Four of those switches fell between 23:07 and 23:58 ET.
Kaiko ran the same test on ether perps at Binance and Hyperliquid. The most-traded size of the day produced 1.68% of notional on Binance ETH/USDT, 1.61% on ETH/USDC and 3.79% on Hyperliquid. At Kalshi the figure was 55.8%. Even Kalshi's calmest day, at 9.3%, beat the peak across the three comparison contracts, which reached 3.5% on Binance and 7.8% on Hyperliquid. 'We have not seen this kind of concentration on a single size on any venue,' said Kaiko analyst Thomas Probst. On a young market with few participants, he said, the behaviour of one large player shows up more sharply.
Kalshi attributes the pattern to its market-maker rewards programme: one maker posted fixed-size limit orders and fast traders filled them before quotes refreshed. A check against the spot-implied ether price does not support that. Fixed-size traders beat it in 33% of trades against 35% for a random benchmark; with a one-second tolerance the result rose to 39% against 36%. Other traders at the same tolerance scored 54% against 42%. The one-minute markout produced a combined $106,000 on $9.81 billion of notional, or 0.11 basis points before fees, roughly half that of other trades. At 0.1 seconds after the trade, 17% of fixed-size trades showed a positive markout and 65% a negative one; at five seconds the split was 43% and 49%.
Rajiv Sethi of Barnard College, who had earlier advanced a similar 'tolerated sniping' explanation, said after reviewing the results that he is starting to doubt his version. None of three experts consulted concluded the activity was wash trading. Kalshi declined to comment. On 22 September the WSJ reported more than $5 billion of near-identical trades at around $5,500 and said the CFTC was examining them. On 28 September Kalshi applied to end its Volume Incentive Program no earlier than 13 October. Arash Aloosh of DCU Business School called the pattern 'largely incompatible with typical wash-trading' but still in need of regulatory scrutiny.
