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Welcome back to the Crowd Money Cast, the podcast about real-money prediction markets. In this month’s episode we are joined John Phillips, the co-founder and CEO of PredictIt—a politics prediction market based out of Victoria University in New Zealand. PredictIt’s markets cover a wide range of political events and have been featured in mainstream news outlets such as CNBC and Axios. And the platform has attracted a large and engaged community.

In our interview with John, we talked about the origins of the company, how the media should use information from prediction markets and how campaigns currently are, his perspective on CFTC regulation and the No Action limits placed on platform, and ultimately where he sees the space—and PredictIt within it—heading.

If you enjoyed our conversation with John, consider subscribing for free at crowdmoney.io or sharing the podcast with a friend. And if you are Interested in joining PredictIt? Use referral code ‘CrowdMoney20’ to get up to $20 reimbursed on your first day of trading: http://predictit.org/promo/crowdmoney20!

And if you are looking for more podcast content from us, you can check out last month’s podcast with Hedgehog Markets Founder Geroge Yu or today’s Global Guessing podcast with Juan Cambeiro about forecasting the Omicron COVID variant.

You can also listen on Spotify; Apple Podcasts; or wherever you listen to podcasts.

❤️ Please click the little heart at the top of the post—it’s like a tip, but free!

✍️ Share your thoughts with us about the episode in the comment section below.

📧 A warm welcome the 67(!) Crowd members who joined since our last newsletter. If you are new, we’d love for you to #JoinTheCrowd:

Show Notes

00:00 - 01:05 | Introduction

01:06 - 26:40 | PM News for October

In a shift from the typical format of open-ended discussions to start the show, Andrew and Clay break down the biggest prediction market news of the month in this segment:

* After the CFTC opened an investigation into Polymarket, the company returns to social media and continues to release new markets.

* Following a year of testing, Reddit launched prediction tournaments with gamified rewards for large subreddits.

* Axios continues to leverage PredictIt data in their news articles, but with mixed results.

* Kalshi releases a redesign and a Twitter competition about their inflation markets which they argue is a good hedge against rising inflation.

26:41 - 51:37 | Interview w/ George Yu, Hedgehog Markets Founder

What is Hedgehog Markets? How do their ‘No-Loss’ competitions work? Why did they choose Solana? Are they watching the CFTC’s investigation into Polymarket? We discuss the answers to all of these questions and more!

51:38 - 58:39 | Post-Interview Comments

After the interview we reflect on our time with George, his platform, Hedgehog Markets, and look forward to Crowd Money 004 and what’s in store for you all.

🎧 Welcome to the third episode of the Crowd Money Cast. Every month, Global Guessing co-founders Clay and Andrew chat with interesting thinkers, leaders, bettors, and entrepreneurs in the prediction market space to explore markets, strategies, and news. This month we spoke with George Yu, Founder of Hedgehog Markets, a new prediction market platform operating on the Solana blockchain.

Prior to founding Hedgehog Markets, George worked as a software engineer at several companies, the most recent being Google where he worked for nearly three years. While at Google, George became interested in how to predict the outcomes of future events with greater accuracy, but observed that there were few ways to do it with approachable UIs and simple market mechanics. So with the support of several backers, inducing Alameda Research. quantitative cryptocurrency trading firm, George launched Solana. 

Since launching on the Solana mainnet in September, Hedgehog Markets has made a splash in the prediction market ecosystem. First, the company introduced ‘No-Loss’ competitions: a Futarchy-derived tournament structure where users stake USDC to receive tokens to trade and win prizes. What makes this approach to prediction markets especially fascinating, is that if you don’t perform well on a trade, you don’t lose any money! Your USDC is returned and you can re-enter at a later date. 

Hedgehog Markets stood out for its unique market features as well. The current markets cover exciting topics like sports games, cryptocurrency markets, and e-sports leagues. There are also plans to explore the allocation of collectibles or NFTs as prizes for trading performance. And possibly most interesting is that Hedgehog Markets has not even released a traditional prediction market product yet!

In this episode we talked to George about how Hedgehog Markets started, the company’s impressive $3.5 million raise this past summer, and how he views Hedgehog Market’s position within the prediction market ecosystem. We also get George’s views on the recent CFTC investigations into Polymarket and how it might affect Hedgehog Markets, as well as continue our search to find the right terminology around ‘prediction markets’. 

Before the interview, Clay and Andrew attempt a new Crowd Money Cast format, and cover exciting news in the prediction market space from the past month. This includes the introduction of prediction markets on Reddit and the proliferation of prediction market data in news publications like Axios! After the episode, the Crowd Money Cast duo reflects on the interview before giving a preview of what’s to come in Crowd Money 004. Get ready for an exciting new prediction market use case that takes advantage of the new Web3 environment!

You can also listen on Spotify; Apple Podcasts; or wherever you listen to podcasts.

Show Notes

00:00 | Intro

01:45 | PM Fragmentation & Consolidation

With an ever-increasing number of prediction markets, Andrew and Clay discuss the effects user fragmentation has on trading and liquidity. We also forecast our expectations for consolidation in both the real-money (USD) and crypto-related markets.

12:20 | Interview w/ Jason Trost, Smarkets CEO & Founder

What was the origins of Smarkets? Was the expansion into non-sports betting markets always in the cards? What challenges has that expansion brought for UI and UX design? How does Jason view his platform relative to the sports-betting and prediction-market competition? How does he see the space evolving? We discuss.

45:00 | Is Prediction Market the Right Term?

Following our interview with Jason, we ponder his final thought that prediction market is not the best term for these markets. Is he right? What’s a better alternative?

🎧 The second episode of the Crowd Money Cast is out! Every month, Global Guessing co-founders Clay and Andrew chat with interesting thinkers, leaders, bettors, and entrepreneurs in the prediction market space to explore markets, strategies, and news. This month we were lucky enough to sit down with the founder and CEO of London-based betting exchange and prediction market Smarkets, Jason Trost (rhymes with 'most'). 

Jason cut his teeth in the world of financial services, where he worked as an equities trader at UBS. He also happened to be an early adopter of prediction markets, focusing on sports and operating on the now-defunct Tradesports platform. 

While working at UBS Jason noticed a disconnect, and an opportunity: the technical infrastructure available for equities traders to inform their investing decisions did not exist for prediction markets. And so Smarkets was born.

Since the company's launch in 2007, Smarkets has grown into one the premier prediction market platforms on the web. Unlike other prediction markets platforms which have shied away from athletic competition,  Smarkets' core offering, its sports market coverage, has grown the company's competitive universe massively to include names like Betfair and FanDuel. In fact, today, Smarkets' sports markets trade volume has amounted to roughly $15 million per day!

And Smarkets’ success has not gone unnoticed. The company has been mentioned by news outlets such as The Hill, Yahoo Finance, and Bloomberg, and raised a Series B round in June led by Susquehanna Growth Equity to accelerate the company’s expansion into the United States. The firm is known for its activity in marketplace investing, with CreditKarma, Fundera, and 10-4 Systems as some of its past exits. With Jason’s leadership and this new injection of capital, Smarkets is certainly primed for future success and growth across the pond and here in the states.

In this month’s episode Jason dives deep on the inception of Smarkets, providing candid consideration of the platform's development to date, and potential areas for future improvement. He also shares his thoughts on the growth of the prediction market space and where Smarkets fits in the ecosystem. In the episode we also chat with Jason about the complicated and diverse nomenclature in prediction markets, and offer our own suggestions for solutions to this issue.

Before the interview with Jason, Clay and Andrew discuss their macro views on prediction markets. The prediction market industry is extremely fragmented, with new market platforms launching beta programs seemingly each month. And like as have observed in other industries in the past, industry consolidation is likely inevitable. We explore (and predict!) what this consolidation will look like and when it will happen, in addition to the impact of these dynamics on prediction markets then and now.

You can also listen on Spotify; Apple Podcasts; or wherever you listen to podcasts.

Show Notes

00:00 - Intro

01:19 - First Impressions of Prediction Markets

Clay and Andrew reflect on their first few months operating on prediction markets. They discuss what they’ve enjoyed about the platforms, the challenges they have faced, and the differences between real-money prediction markets and the forecasting platforms they are used to.

14:43 - Kalshi Co-Founders Interview

Kalshi co-founders Tarek Mansour and Luana Lara Lopes walk Clay and Andrew through their impressive new project, the importance of their CFTC regulatory approval, and how #predictionmarkets will grow as an asset class and technology in the future.

36:23 - Post Interview Discussion

Clay and Andrew discuss the interview with Tarek and Luana, including some lingering thoughts and questions on prediction markets. They also preview some exciting content for the next issue of the Crowd Money newsletter.

🎧 Welcome to the first ever episode of the Crowd Money Cast, the podcast accompaniment to the Crowd Money newsletter. On the Crowd Money Cast, Global Guessing co-founders Clay and Andrew sit down with figures in the prediction market space to discuss exciting markets, new projects, and trading strategy. In this inaugural episode, we are joined by the founders of the only CFTC-regulated prediction market in existence, Kalshi.

When former quant traders and MIT classmates Tarek Mansour and Luana Lopes Lara co-founded Kalshi, they wanted to build a new asset class that generated previously-inexistent data on the events which dictate our world. This past July, that dream took one step closer to fruition, when Kalshi launched its live beta. Since the company’s launch a few months ago, Kalshi has attracted over 4,000 users to join the platform. Liquidity and trading volume has noticeably risen over that time, with the over $30 million in venture-backing starting to show its influence on the industry.

In this episode, Tarek and Luana speak with us about their Beta launch, the story behind Kalshi, and the potential for growth in the prediction market space moving forward. We also talk about the uses of prediction markets, from a decision-making tool, information source, or investment hedge, and how Kalshi’s markets can serve each purpose.

Clay and Andrew also reflect on their first few months operating on prediction markets. They discuss what they’ve enjoyed about the platforms, the challenges they have faced, and the differences between real-money prediction markets and the forecasting platforms they are used to.