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Prediction markets, also known as betting markets, information markets, decision markets, idea futures or event derivatives, are open markets that enable the prediction of specific outcomes using financial incentives. They are exchange-traded markets established for trading bets in the outcome of various events. The market prices can indicate what the crowd thinks the probability of the event is. A typical prediction market contract is set up to trade between 0 and 100%. The most common form of a prediction market is a binary option market, which will expire at the price of 0 or 100%. Prediction markets can be thought of as belonging to the more general concept of crowdsourcing which is specially designed to aggregate information on particular topics of interest. The main purposes of prediction markets are eliciting aggregating beliefs over an unknown future outcome. Traders with different beliefs trade on contracts whose payoffs are related to the unknown future outcome and the market prices of the contracts are considered as the aggregated belief.
Nouriel Roubini is a Turkish-born Iranian-American economic consultant, economist, speaker and writer. He is a Professor Emeritus since 2021 at the Stern School of Business of New York University.
Michael Edward Novogratz is an American investor, formerly of the investment firm Fortress Investment Group. He is currently CEO of Galaxy Investment Partners which focuses on investments in cryptocurrency.
Francis Aurelio deSouza is an American entrepreneur and business executive. He is co-founder of SynthLabs, and a member of the Board of Directors of Deel Inc.
A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
Robinhood Markets, Inc. is an American financial services company headquartered in Menlo Park, California. The company provides an electronic trading platform accessible via mobile app that facilitates commission-free trades of stocks, exchange-traded funds and cryptocurrency, as well as cryptocurrency wallets, credit cards and other banking services. The company's revenue comes from transaction-based revenues, net interest income, and subscription fees. The company has 24.3 million funded customers, 11.0 million monthly active users, and $152 billion in assets under custody.
Interactive Brokers, Inc. (IB), headquartered in Greenwich, Connecticut, is an American multinational brokerage firm which operates the largest electronic trading platform in the United States by number of daily average revenue trades. In 2023, the platform processed an average of 3 million trades per trading day. Interactive Brokers is the largest foreign exchange market broker and is one of the largest prime brokers servicing commodity brokers. The company brokers stocks, options, futures contracts, exchange of futures for physicals, options on futures, bonds, mutual funds, currency, cryptocurrency, contracts for difference, derivatives, and event-based trading contracts on election and other outcomes. Interactive Brokers offers direct market access, omnibus and non-disclosed broker accounts, and provides clearing services. The firm has operations in 34 countries and 27 currencies and has 2.6 million institutional and individual brokerage customers, with total customer equity of US$426 billion as of December 31, 2023. In addition to its headquarters in Greenwich, on the Gold Coast of Connecticut, the company has offices in major financial centers worldwide. More than half of the company's customers reside outside the United States, in approximately 200 countries.
Augur is a decentralized prediction market platform built on the Ethereum blockchain. Augur is developed by Forecast Foundation, which was founded in 2014 by Jack Peterson, Joey Krug, and Jeremy Gardner. Forecast Foundation is advised by Ron Bernstein, founder of now-defunct company Intrade, and Ethereum founder Vitalik Buterin.
Tether is a cryptocurrency stablecoin launched by Tether Limited Inc. in 2014.
A cryptocurrency bubble is a phenomenon where the market increasingly considers the going price of cryptocurrency assets to be inflated against their hypothetical value. The history of cryptocurrency has been marked by several speculative bubbles.
Binance Holdings Ltd., branded Binance, is a global company that operates the largest cryptocurrency exchange in terms of daily trading volume of cryptocurrencies. Binance was founded in 2017 by Changpeng Zhao, a developer who had previously created high-frequency trading software. Binance was initially based in China, then moved to Japan shortly before the Chinese government restricted cryptocurrency companies. Binance subsequently left Japan for Malta and currently has no official company headquarters.
Changpeng Zhao, commonly known as CZ, is a Chinese-born Canadian businessman. Zhao is the co-founder and former CEO of Binance, the world's largest cryptocurrency exchange by trading volume as of July 2024. He resigned as the CEO in November 2023 after pleading guilty to a money laundering charge in the United States and was sentenced to four months in prison in April 2024. Zhao was released from prison in September.
bitFlyer is a Japanese cryptocurrency exchange headquartered in Tokyo. It was founded in 2014 and is one of the largest cryptocurrency exchange in Japan.
Justin Sun is a Chinese-born cryptocurrency entrepreneur and business executive. He is the founder of TRON, a cryptocurrency with an associated blockchain DAO ecosystem and USDD, a stablecoin issued by TRON DAO Reserve. Sun is also the owner of Rainberry, which developed the BitTorrent protocol and under Sun's leadership developed the BTT cryptocurrency token. Sun also owns the crypto exchange Poloniex, and is affiliated with the crypto exchange HTX. Sun served as Permanent Representative of Grenada to the World Trade Organization (WTO) in Geneva from 2021 to 2023.
Pantera Capital is an American hedge fund and venture capital firm focused on digital assets headquartered in Menlo Park, California. The fund specializes in cryptocurrencies and blockchain technology. It is one of the largest digital asset funds in the world by managed assets.
FTX Trading Ltd., commonly known as FTX, is a bankrupt company that formerly operated a cryptocurrency exchange and crypto hedge fund. The exchange was founded in 2019 by Sam Bankman-Fried and Gary Wang and collapsed in 2022 after massive fraud perpetrated by Bankman-Fried and his partner Caroline Ellison forced the company to file for Chapter 11 bankruptcy.
Polygon is a blockchain platform which aims to create a multi-chain blockchain system compatible with Ethereum. As with Ethereum, it uses a proof of stake consensus mechanism for processing transactions on-chain. Polygon's native token is POL, an ERC-20 token which allows for compatibility with other Ethereum cryptocurrencies. It is operated by Polygon Labs.
Kalshi Inc. is an American financial exchange and prediction market based in Lower Manhattan, New York City, offering event contracts. Launched in July 2021, it offers a platform where both retail and institutional traders can place trades on various future events, including economic indicators, weather patterns, awards, as well as political and legislative outcomes. The platform enables users to trade on yes-or-no questions, with contracts priced based on the market's estimated probability of an event occurring. The exchange provides contracts that pay out $1 for correct selections. In October 2024, Kalshi received approval to reintroduce election markets, allowing users to wager on political outcomes, such as congressional control and presidential elections.
Manifold, formerly known as Manifold Markets, is an online prediction market platform. Users engage in competitive forecasting using play money called 'mana', as well as 'Sweepcash,' which can be withdrawn for real money, or donated to charity. Topics on Manifold have included the 2024 United States presidential election and the Oscars. Sweepstakes are US only and 18+. All states are eligible except Washington, Michigan, Idaho, and Delaware.
Polymarket is an American financial exchange and the world's largest prediction market, headquartered on the Upper East Side of Manhattan, New York City and offering event contracts. Launched in 2020, it offers a decentralized platform where both retail and institutional traders can place bets on various future events, including economic indicators, weather patterns, awards, as well as political and legislative outcomes. Participants can deposit USDC cryptocurrency through the Polygon blockchain network and trade shares that represent the likelihood of specific outcomes occurring in the future.
References
- 1 2 3 4 5 6 Roberts, Jeff John; Rowe, Niamh. "Who is Polymarket CEO Shayne Coplan? The 26-year-old's crypto betting site is taking U.S. politics by storm". Fortune .
- ↑ David Yaffe-Bellany; William K. Rashbaum; Michael J. de la Merced (13 November 2024). "F.B.I. Searches Home of Founder of Polymarket Betting Website". The New York Times . ISSN 0362-4331. Wikidata Q131195855 . Retrieved 2024-11-15.
- 1 2 3 4 Field, Matthew (November 9, 2024). "The 26-year-old whose betting start-up predicted Trump's triumph" – via www.telegraph.co.uk.