Gondor v1 to let users borrow against their entire Polymarket portfolio

Quick Take

• Gondor v1, expected to launch publicly in September, will enable users to margin their entire Polymarket portfolios to place additional leveraged bets.
• This is an expansion from Gondor's beta release, which launched seven months ago and focused on borrowing against individual positions.

Polymarket-based DeFi startup Gondor has unveiled what it's calling the first margin account for Polymarket, the largest fully blockchain-based prediction market.

Gondor v1, announced via X on Monday, will enable users to cross-margin their Polymarket positions to "borrow against the entire portfolio and use the credit to buy more shares," according to the post.

This new offering marks a significant advancement from Gondor's beta product, which launched seven months ago and focused on borrowing against individual positions.

Prediction markets like Polymarket and Kalshi are typically fully collateralized, meaning users deposit the full amount they're risking upfront, locking their capital until the event resolves. Gondor's initial iteration, added leverage to that dynamic, by enabling users by enabling users to borrow against individual positions, freeing up capital without forcing an immediate sale.

"Cross-margining solves the core problems of isolated leverage," Gondor wrote. "It allows more margin to be extended safely at lower rates, supports a wider range of markets, and lets borrowers hold positions through resolution. Most importantly, cross-margining is a model that can scale: a win-win for both lenders and borrowers."

According to the post, Gondor noticed the limitations of isolated leverage during their beta phase, noting that it exposed lenders to high gap risk in binary prediction markets, where a single position can rapidly lose nearly all value.

"As we tested the system, it became clear that the consequences went beyond interest rates," Gondor wrote. "To remain sustainable, isolated leverage had to be limited to a small set of highly liquid markets, exposure had to be capped, and many positions could not support borrowing at all."

"You either protect lenders or give borrowers good UX, but not both," the team added, having noted that "the safer an isolated lending system is, the more restrictive and expensive the borrowing becomes."

Cross margin, on the other hand, is based on "the health" of users' full accounts. Gondor noted this is similar to how prime brokers can offer credit based on their clients' entire diversified portfolios.

V1 is expected to launch publicly in September, with a private testing period kicking off next week, according to the announcement. The team claims Gondor beta drew over 150,000 waitlist sign-ups.

Users will be able to deposit their Polymarket shares into a unified, non-custodial margin account to receive a credit line that functions like cash for purchasing additional positions directly within the platform.

The move comes amid rising interest in prediction markets, which the Commodity Futures Trading Commission has said represents an innovative new category of derivatives that can enhance price discovery and information aggregation, despite pushback from state-level regulators.

Gondor is not the first to experiment with margin in prediction markets. Earlier this year, Backpack Exchange, the crypto trading platform founded by former FTX employees, launched a private beta of its "Unified Prediction Portfolio" that includes a cross-margined portfolio system for select traders.

The startup raised a $2.5 million seed round with backing from Prelude, Maven 11 and Castle Island Ventures, according to its website.

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