A potential new player in the prediction market industry has recently secured $6 million in seed funding from venture capital firms and angel investors. XO Market, which has amassed 30,000 users on its mainnet, plans to eventually convert popular influencers into market makers by becoming the “YouTube” of prediction market apps.
Picus Capital, Coinbase Ventures, and Australian cricket pace bowler Pat Cummins have joined various angel investors to provide seed funding for XO Market, according to a social media post over the weekend. The company’s goal is to “build a user-created alternative to prediction market platforms like Polymarket and Kalshi.”
While forecasting on world events, cryptocurrency, the stock market, and sports contests have become a mainstay within the United States, XO Market is planning to enable individuals to create their own prediction criteria. The idea is that the community itself will determine which markets possess genuine interest, and create trading volume accordingly.
Some potential user-created markets might revolve around whether an influencer will qualify for (or win) a popular eSports tournament. Another community initiative could attempt to forecast whether someone is able to complete a cooking challenge, and so on.
Although the potential for user-created markets seems limitless on paper, attracting actual trading volume into a market will still be required. If members who are using the XO Market platform aren’t interested in a market, or believe its end result can’t be accurately graded, liquidity for the event will not be forthcoming.
While the reach of high profile influencers is undeniable in various specialty categories, the grading of outcomes could present challenges if rules for user-created markets are vague. The high octane commentary that often goes hand-in-hand with powerful influencers could potentially create scandals within a market’s spectrum of interest.
Determining whether one person will “fall in love” with another person is one outcome that might be more difficult to grade than a traditional prediction market related to a stock’s performance. Rules for video game “high scores” may also need to be established in order to prevent partial or emulator-created speedruns.
Still, the demand for user-created prediction markets appears to be alive and well, given that XO market has already generated $150 million in trading volume on its mainnet platform. Seed funding from established investment firms including Coinbase Capital could likewise provide an air of legitimacy to the project as it formally moves into an industry realm that has yet to attract the attention of forecasters like Kalshi and Polymarket have.
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