While attracting new users may not be a core challenge for crypto, keeping them active beyond the first month is far more difficult, and data from prediction markets is spotlighting the issue.
Polymarket retention data, compiled by analytics company Dune and market maker Keyrock, tracked monthly cohorts of new active users and measured the number of users who returned to trade in subsequent months.
According to the report, which sampled 275 crypto projects spanning networks, decentralized finance (DeFi) platforms, wallets and trading apps, Polymarket’s average retention outperformed over 85% of protocols.
The data highlighted how rare sustained usage remains across the crypto sector. In markets where liquidity depends on frequent participation, weak retention can signal shallow growth.
Polymarket retention rate versus crypto entities. Source: Token Terminal
Why crypto platforms jump into prediction markets
Prediction markets offer a structure that differs from crypto apps. The engagement is linked to real-world events like elections, sports competitions and macroeconomic releases, creating recurring reasons for users to re-engage.
The event-driven cycle fosters more high-frequency participation than short-term speculation, reducing the reliance on incentives to sustain trading activity.
This dynamic may explain why some of the largest crypto platforms have begun to experiment increasingly with prediction market integrations.
Crypto entities struggling to maintain consistent user engagement outside of high volatility periods may have prompted a search for features that encourage habitual use rather than one-time transactions.
Related: CFTC gives prediction markets leeway on data and record-keeping rules
Crypto entities experiment with prediction markets
Crypto exchanges Coinbase and Gemini, wallet service Phantom and clearing provider Bitnomial Clearinghouse are some of the crypto entities that signaled their entry into the prediction markets sector in December.
On Friday, Bloomberg reported that Coinbase will launch tokenized equities and prediction markets. This followed a post from tech researcher Jane Manchun Wong sharing alleged leaks of the exchange’s prediction markets website.
On the same day, Phantom partnered with prediction market Kalshi to bring event-based trading into its wallet interface. The integration allows users to trade tokenized Kalshi positions on the Phantom app.
On Saturday, Bitnomial received approval from the US Commodity Futures Trading Commission (CFTC), enabling it to launch prediction markets and offer clearing services for other platforms.
On Tuesday, crypto exchange Gemini launched an in-house prediction market across all 50 states in the United States. The company said it aims to build a one-stop user app, where users can participate in crypto trading and prediction markets as well.
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