Prediction markets are booming, but face a major obstacle: capital inefficiency. Gondor, a bold new DeFi protocol, aims to tackle this issue by introducing a financial layer on Polymarket, unlocking billions of dormant funds. Bet on future events without liquidity constraints!
Gondor isn’t a competitor to Polymarket or Kalshi, but rather their dedicated “Aave.” The concept is simple yet revolutionary: allowing traders to transform their open betting positions into collateral to borrow stablecoins. Instead of having their capital locked up, users can now put it to work elsewhere in DeFi, or, more interestingly, use it to amplify their own bets.
The protocol, which recently raised $2.5 million from leading investors like Maven11 Capital and received a grant from Polymarket, directly tackles the biggest frustration traders face. No more dormant capital; every bet becomes a productive asset, drastically increasing efficiency and flexibility for traders, whether they’re individuals or institutions.
Gondor’s most anticipated feature is undoubtedly the introduction of leverage. From its beta launch in the week of December 12, 2025, the protocol will enable leverage up to 2x through a looping mechanism. Here’s how it works:
This ability to amplify strategies without having to sell initial positions is a true game changer. For Polymarket whales, it’s the opportunity to scale their operations exponentially. For institutions, it’s a much more flexible capital management and hedging tool. Gondor’s roadmap is already looking toward the future, with 4x to 5x leverage planned for early 2026.
Founded by crypto entrepreneur Arsenii Iatskar and backed by Polymarket engineers, Gondor arrives at a pivotal moment. Prediction markets are on track to become an asset class in their own right, and Gondor provides the DeFi infrastructure they’ve been missing. The protocol doesn’t seek to compete, but to amplify the existing ecosystem.
Of course, risks remain, notably market manipulation and cascading liquidations due to leverage. However, Gondor plans to mitigate these dangers with conservative borrowing ratios and by selecting only high-liquidity markets for its beta version. By building this bridge between DeFi and prediction markets, Gondor isn’t just unlocking liquidity; it could very well be the catalyst that propels the entire sector toward mass adoption.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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