Kalshi: Trading architecture

Oracle, funding and arbitrage

Oracle design for Kalshi markets

For these listings, the external “Validator” leg is anchored to Kalshi’s mid-price (venue-normalized). The full oracle follows your tri-blend:

Oracle = (Mark + Validator + EMA) / 3

Oracle design

• Validator: Kalshi price (cleaned for staleness; mid or last within guardrails)

• Mark: Trove last traded price (our internal market)

• EMA: Smoother on Trove internals (HyperPS)

• Dynamic weights (Beta): Guardrails allow higher Validator influence while Trove depth is young

If Kalshi is stale or paused: Validator weight reduces automatically; EMA/Mark weights rise within published limits. Circuit breakers and deviation bands apply.

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Funding & convergence

Funding aligns Trove’s Mark to the Oracle (which reflects Kalshi):

Premium index P: (Mark−Oracle)/Oracle

Funding rates

Arbitrage intuition

• If Trove < Kalshi (discount): longs on Trove receive funding; classic long Trove / short Kalshi basis trade

• If Trove > Kalshi (premium): shorts on Trove receive funding; short Trove / long Kalshi hedge

As expiry approaches, both prices should converge toward {0, 100}; funding accelerates this.