A Public Probability Layer | Eric Rosenthal, Alex Momot, Winny

My name is Eric Rosenthal. I am the chief strategy officer for prediction index. Um, with me here today is Winnie. The founder of Q.Fun and Alex Marma, the founder of Peanut Trade.

If you guys want to tell us quickly about your companies.

Hi, I'm Winnie. I'm the founder of Q.Fun. We are a opinion and coach market based on Salana. I am still winning.

Love you ETH forever but it's

Hi all my name is Alex Mat and I'm founder of Peanut and I'm very passionate about prediction markets. actually building aggregator and uh from my biography probably most important fact is that I was a participant of Ethereum ICO and one of the things that I liked in it it was not only smart contract thing but prediction market concept and here we are in 12 years now we have a narrative life all right you know we don't have a lot of time so we're gonna just get straight to it give me the biggest problem that prediction markets solve that that you Think

Alex, if you want to go with that.

Shaping the future.

Shaping the future. Vitalic's vision. Shaping the future. All right. What What do you think?

Consensus.

Consensus. Yeah.

I think um for personally like in the betting world, I've been banned from tons of sports books or limited at others. And that culture of like only wanting dumb money and kicking out the sharp money is pretty ridiculous. So, I'm excited to have a place where they don't care if you win or lose. They just want to support your action. So I'm uh really happy with that in the prediction market space.

Um quickly if you want to tell us about I mean like the culture and opinion markets that you guys have at Q fun.

Yes. So essentially we started QF fun because well I've been in crypto for about eight years. I've been on Poly Market for about two and there was nothing for myself. There was nothing for I mean there are four women that I can see in my peripheral vision. Um I I grew up very natively on the internet.

I was Tumblr famous at 14 when I went on on Poly Market. I don't really give a damn about American politics or sports or stock prices. There was nothing that I felt that I could intuitively engage in. And I wanted to create a platform that allowed us to, you know, engage in this new layer of the internet in this public probability layer that didn't previously exist. So that is probably what I think is the most important part of what we're building.

Cool. And Alex, if you could tell us a little bit more about Peanut uh trade.

So we are market making company and we doing uh things to help people launch their tokens and uh recently probably one year ago we started to think what we can do with predictions and probably as we have half company doing quant algorithms like prop trading and all of that like market neutral arbitrage. My first idea was so okay we will have same situation like in 2020 with defy summer when we will have a fragmented liquidity so probably we can do some strategies with it and based on that we start doing some trading on poly market and kshi and many other platforms and now we decided that probably we need to do something with that fragmented liquidity to unite it and to make it work because even for biggest markets sometimes it's a problem with liquidity and probably the aggregation and the opportunity to trade in one place with all of the market liquidity will be the best idea.

I feel that. Um and I'm going to get you a last question if we can or maybe we have more. I don't know. Um we're finding out live here how much time we have. Um if we want to talk a little bit about like the the ethics um Alex is from Ukraine and about the the ethics of certain types of markets and how um you know betting on wars and how you live that in Ukraine.

Yeah. So exactly four years ago here on ETH Denver in 2022 like few weeks before full scale invasion I thought that probably it should be something with a prediction market concept that could stop the war and uh it wasn't. So it was a problem for me to do something except just a short crypto because it's going to be war. So I sure that it's going to start and now probably if we will have a little bit more liquidity but I think that during next years it still be possible if you will create a bet. So let's say 100 tanks or 10 um planes will be burned today by the armies that want to invade it could stop uh the war and uh I think it's not about ethics because it's just a projection of real life with some instruments that you could use to make something.

So it's not uh exactly problem that uh we discussed before about is it good or not. It's more about how you can use the existing instrument like with knife on the kitchen or for something bad and so on. And same for now like when we have on poly market uh there are markets about uh will give municipality will be bombed today. So I still betting on that just to take profits from it and to put on Moscow coupe and uh in such a way uh like Russian army creates a problem for Kremlin and I think that this kind of instruments and mechanics and like synthetics positions on anything. It's really great and uh uh I'm very passionate that prediction markets give gives us that opportunity.

And Winnie, I know you have a slightly different take of what you allow on your platform if you want to talk about that. So when I started looking at especially like permissionless markets I was on one of the ones that came out of alliance I won't name them but the first market that I saw that was created was will Greta Thunderberg get killed by ISIS and the fact that we as an industry as you know degenerate crypto natives are creating these markets it literally as someone who's also built products I was previously the founder of chipped and just my belief is that We need to be creating products seriously that go towards the masses and seeing all of these heavily funded, you know, prediction markets, opinion markets, especially permissionless ones that are created by, you know, everyone in this freaking room. And we're creating such heinous markets. It's so deeply, it's deeply unserious that it's so freaking serious that there is no reason for the real world to take us seriously in any matter of the world. And I have always loved this industry.

I've been here for 37% of my life and I care very deeply about making it legitimate. So when it came to looking at building these permissionless platforms, these you know permiss permissionless prediction markets and opinion markets, I think there is a great um there's a great weight on our shoulders with regards to ethics to make sure that we are building a platform that your mom, your sisters, your cousins, you know, people who aren't native and don't understand how bad this industry can get with, you know, the racist meme coins and all of that. There is there's a reason this industry is flopping. Like let's be freaking serious here. And it's because a lot of the industry is just flatout freaking redacted.

And we have we really have a we have a cross to bear. That means creating platforms that have correct moderation while still being permissionless. And that is what I really truly believe in with Q. Yes, you can create permissionless markets, but there is moderation. You can't create terrorism.

You can't create markets on terrorism. You can't create markets on war. And I understand there's a level of insurance to that. Like, you know, there is manifestation markets. There is all of that kind of like what you were saying, you can hedge your bet about whether something's going to happen.

And I look at that from like even like a brand perspective of you can hedge against a campaign that you put out flopping. But it's like this is really serious. We are if you are creating bets about whether someone's going to die and or something really terrible is going to happen. It's not funny. It's a really serious thing.

I've come from, you know, I'm the first person in my family to not join the military and that is something that I care very deeply about because I don't like war. Um, and this all plays into the ethics of building these kinds of platforms and seeing how there are hundreds and hundreds of prediction markets being spun up every day coming out of some of the biggest accelerators in this industry. And it's embarrassing. It's really really embarrassing the lack of ethics that I'm also I'm a female founder in this industry full of men and all of these markets are being created by men. All these platforms being created by men.

There's a distinctive lack of empathy that I think is so troubling and that we actually have to get over if we want to have any like realm of seriousness going forward. And it's something that I took upon myself to be like, I want to create this in a way that we can take to the general public in a really serious way because it's not being it's not being seen to.

Yeah, that makes total sense. And I think the key word there is for me is culture. What is the culture of our industry and culture of prediction markets? And if it is just a negative, sometimes hateful culture, it's harder to get the widespread general public on board. Um, are we going to see, you know, from the news, podcast, social media, are people going to use prediction markets to to be honest about the world or are they going to ignore them because it's if there's a you brought up like a racist memecoin, those things bring so much negative attention to our culture in crypto and in prediction markets that we have to bring, you know, bring things in a positive light.

And I think you're doing that with uh with Q. Fun. And um Alex, if you want to talk a little bit more about the the culture of prediction markets and where you see things going.

Yeah, I think that it's great if you can somehow shape the future, not in terms of some popular events like we have now like presidential elections or something because the original popularity of polymer market was because of elections. It's because probably nobody before that beforehand it was no um possibilities for regular people somehow influence on something. They thought that it's fake, it's broken. So probably they can do and they can influence on the actual politics with some bets. And I think that next we will have not actually u politics or geopolitics events but something closer to the everyday life for them even like instead of uh insurance because nobody really want to pay for insurance but it's much much more fun to bet if it will be plane will be late or something like that.

Or you can do something like with the cultural event that is much more how to say more kind for people not all that uh uh evil markets on poly market right now. And uh I think that uh it's going to be like everyday life with some uh very um convenient instruments how you can influence on something around you not far away in some uh countries uh in other part of the globe but something that could support you or your neighbors or your family and uh I sought a lot of ideas from my friends how it could be done. I I still thinking uh if it will be possible or if it will be popular because it's more you know we need to solve the liquidity problem for poly market uh and uh a lot of smaller markets right now to make that possible because otherwise it will be like $1 and nobody will use it but I think during next months or years we will have it because the speed of development of everything in predictions is like uh old crypto days like in 2020 for defy or something like So probably next year or this year in the end we will see a lot of new concepts and basically you here representing one of the concept and it's going to be great.

Do you see liquidity being fragmented from every different uh prediction uh market or do you think there's going to be a way to combine them all together whether you're a small market or a big company like poly market or kshi? Yeah, sure. I think it's going to be something like we are building with aggregation. I think it's going to be some terminals, bots and everything because nobody really want to uh try to make a bet. So when I start tested my strategies and my ideas, I reduced the size of the bet from $1,000 to 100 because otherwise it was not possible to check the idea.

And it's very strange because you know it's like uh old times uh like 2013 in crypto when it was just one exchange or two exchange available for everybody to trade. So here same situation it should be some kind of aggregation. It should be something like curation of rewards or some incentive for market makers and as a peanut we introduced market making for uh small projects so they can have liquidity and uh it somehow could help their users to trade because otherwise when it's a lot of projects like I don't know how many it's hundreds of prediction markets now but it's not enough users and liquidity for that so I think uh this problem will be um quite big for the industry for next one year or two.

Okay, that that makes a ton of sense. Um we uh are running out of time here. So if we can get your uh your final thoughts um Winnie and uh and then Alex after that and we'll go.

Oh, my final thoughts on prediction markets.

Yes, let's go.

I truly believe this is where the it's where the world is going. 37 37% of Gen Z are currently engaging in prediction markets. It's where we're getting our news. It's the way that we're engaging with media. And I think everyone who's just trying to build off the poly market and Kawoshi model is such a close-minded viewpoint of it.

Everyone is either trying to build on Poly Market and on top of Koshi and looking at like liquidity models. It's there's you know there's aggregation but there is um distribution aggregation. There is but there's also like so many different mechanics that we can use for liquidity. Everyone's trying to do market makers, but then there's like one thing I'm really excited about is paramutual markets, which is something that's completely underexplored right now. And it's like what we're doing with Q, we're looking at like bonding curves on parames.

I think there is we are so early in the way that we're looking at the mechanics of everything that we shouldn't be limiting ourselves by building on polyarket and Kelshi. We have two big players right now. There is room for thirds. There's room for seconds. There's room for like so many more things even like like aggregators whatever.

But the way that we are looking at the mechanics is the same way that crypto always does. It's copy, copy, copy. No one once we find one thing that works, we stop innovating. And I think the exciting thing for me right now is the innovation that can happen with these mechanics. So that's what I'm really excited about.

Well, you know, if you're uh if you're ever looking to find new projects like QF fun, like peanut trade, that's what we do at Prediction Index. We're the place where you hopefully discover the world of uh prediction markets. And by the way, our annual report is coming out uh next week. We uh tracked over 250 projects, over 120 billion dollars of trades, and we'll be uh coming out with the first, you know, full annual report, 57 pages on everything there is in the world of prediction markets. But to your point, I think this is just the beginning.

I would say uh prediction markets have already won versus everything else. People don't realize it yet. They are the Netflix to the Blockbuster that existed before. And a lot of people don't know that's already happened. But the game is over.

No one's going ever again to go rent their movies at Blockbuster. And no one's ever going to traditional sports books or the traditional way of doing things anymore. Prediction markets are here to stay and they will become victorious and they already are. Alex, your final thoughts.

Well, I think that uh crypto trading is broken. Uh just recently I read something about uh you should be you should have $500 of profits on pump fund to be in top 0.1% of all users and in prediction markets now it's 10%. And it's not about the trading or profits it's something that is more fair or more efficient and the risk limit is much smaller. There are no liquidations or something like that.

So I think based on this mechanics it could be something more. So my final thought is just let's try to build something valuable and something that will make world better.

Thank you everybody for coming to a our our talk on prediction markets and I would really appreciate you.

Thank you.