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Unlocking Prediction Markets: UX, DeFi, and the Next Wave of Users
Recorded: Dec. 15, 2025 Duration: 1:00:54Space Recording
Short Summary
The discussion highlights the rapid evolution and growing interest in prediction markets, with innovative projects like Gondor and PolyBot leading the charge. As these platforms enhance user experience and integrate with existing financial systems, the potential for mainstream adoption increases, signaling a promising future for decentralized prediction markets.
Full Transcription
Thank you. Thank you. GM everyone and happy Monday.
We will sit back,
give it a few minutes for people to come into the space and fill it up.
If you are here now,
please like this space and retweet it in the bottom right-hand corner.
We definitely,
I am very excited about this personally.
I love prediction markets.
I use them all the time.
So I am very much looking forward to this space,
but until then,
just sit back,
relax,
and we will,
we will join after the music is over.
In the year 2525, if man is still alive, if woman can survive, they may fight.
In the year 35, 35, ain't gonna need to tell the truth, tell the lies Everything you think, do and say
Is in the pill you took today
In the E45, 45
Ain't gonna need your teeth, won't need your eyes
You won't find a thing to chew
Nobody's gonna look at you.
If they're here, 55, 55, your arms are hanging in at your choice.
Your legs got nothing to do, some machines doing that for you.
doing that for you
If they're here
65, 65
Ain't gonna need no husband
Won't need no wife
You'll pick your son
Pick your daughter
From the bottom of
All that you go
If they're here 75, 10 If God's coming, he ought to make it by then
Maybe he'll be every rising self and safe
Guess it's time for the judgment day
If God's coming, he ought to make it by, God is going to take in my sin.
You either say I'll be where man has been, or tear it down and start him on the road.
In three years, thirty-five, thirty-five, I'm going to wonder if man is going to be alive.
He's taken everything this older can kill, and he has put back nothing more.
Now it's been 10,000 years.
Man has dried a billion tears For what he never knew
Now man's reign is true
But through eternal night
The twinkling of starlight
So very far away
Maybe it's only yesterday
In the year 2525, if man is still alive, if woman can survive, we may fall.
In the year 3525, if man is still alive, if woman can survive, we may fall.
Welcome everyone.
I am very excited to talk about prediction markets on a Monday morning.
It is going to be a very great space.
Before we get started, some housekeeping item.
I am the host, Two Cent Timmy. Please click in the bottom right hand corner of the show.
Thank you all. I just realized I was talking to myself and I was muted and that is too bad, but I was going through some housekeeping items. I am the host to St. Timmy. Really looking forward to this prediction market space. I think it'll be a really, really great things. So I'm excited to dig into that and see kind of what we have in prediction markets.
Before we get started, if everyone can hit that little quotation bubble in the bottom right, like this space, retweet it, get it all out to the corners of X so we can have as many people learning about prediction markets and using them because I think they are very, very powerful.
But with that being said, we will jump right into the space.
We'll start with some introductions.
So we will start with Gondor.
If you want to go ahead and introduce yourself, share a little bit about what you do.
I know you guys just announced something really, really cool that I am really excited about
to dive into.
So if you want to go ahead and tell us a little bit about who you are.
Of course, of course. Hey, everyone. And thanks so much for inviting over to me.
My name is Arseny. I'm speaking on behalf of Gondor.
We're building DeFi layer for prediction prediction markets which means that we unlock those shares
people trade on polymarket and elsewhere and turn them into financial assets essentially and the
first product we're currently rolling out is a protocol for borrowing against polymarket positions
which means that now you can turn your bets or shares on polymarket into collateral borrow
against them get more liquidity,
trade for on Polymarket or elsewhere.
Some people use it for leverage.
Some people use it for just general capital efficiency.
Yep, just a few days ago, we rolled out our private beta.
So if you'd like to try it out,
we're currently getting people off the wait list.
And the first traders just started borrowing and leveraging.
So we are running it at our largest capacity.
And yeah, please sign up if you'd like to.
And yeah, excited to be part of this space and pretty sure we're a bunch of questions associated with what I've just said.
So yeah, let's get into it and we'll go through them one by one.
Yeah, I love it. I, for a while, probably about a year ago, a little over a year ago,
Crypto Texan, then on the Polygon team, now on the Katana team, would host a space called
Pancakes and Predictions. And we talked a lot of times about how cool it would be
to start introducing DeFi to prediction markets
and just amok a deeper layer of liquidity, allow people to, I would say, vote with more
conviction and really double down on their position.
So it should be great.
And I did pin your announcement up to the banner here so people can click on the link
and check it out.
But Pauly Bart, why don't you go ahead and introduce yourself and kind of say what you guys are doing.
So, hey, I'm very happy to be here.
I'm Adif on behalf of PolyBot.
We built a Telegram bot, which is the fastest execution layer for PolyMarket.
This week, we released a few features that we haven't announced yet, such as copy trading.
We offer the fastest copy trading in Polymarket right now.
And also auto-redeeming inside the copy trading.
So basically you can just set up your copy trade and not touch the interface anymore.
Just let it trade on your behalf according to the rules you've set yourself
yeah i thought it was really cool i checked it out and we'll get more into that but it was uh it was very fun to start playing around i think uh with prediction markets there's a lot to i mean
they're pretty good for user experience right now but integrating it into more platforms like
telegram i was playing around making some bets and thinking like, this is very, very easy, very straightforward. So
nice work there, but I'm kind of interested to dive in. So we will get started with the space.
You guys can add on to each other. I don't need to call on you if you have an idea.
But for those who are tuning in and haven't used the prediction market, and I guess we'll ask
you first, Gondor, but what makes prediction markets so compelling? What are they? I mean,
there was, I think, two weeks ago, three weeks ago, Polymarket was on 60 minutes. So they're really getting a whole bunch of exposure.
We're seeing VCs raise or the prediction market platforms raise a ton of money and really getting
some traction. So what makes them so compelling to other parts of crypto? Sure. Yeah, 100%. So I
think to put it in simplest way, prediction markets are financial primitives on everything, right? Instead of trading specific assets, as we are used to, like, say, shares or tokens, or some exotic derivatives like options, we can extract those beliefs, we are encompassing our trades into binaries, whether, say, specific
events going to happen or not, right, whether a price of a specific asset is going to go up or
down. And that is just a much more intuitive and much more simple way to trade anything at all,
essentially. And what prediction markets are pretty much repackaged binary options wrapped
into this, I guess, context of real world where you don't have to trade on, say, how a company is
going to perform next quarter or what would be the results of some, like, I don't know, oil trade,
right? But instead you trade on what you're already caring about, right? Maybe this is
your popular singer or I don't know, whatever, some other cultural topics you enjoy, right? So
that's probably what makes it very attractive to consumers. For us at Gondor, what's very
interesting is that those shares are essentially, as I've said, derivatives on top of anything,
which means that they're a very good way to hedge or use them as insurance or just generally add
them to some more sophisticated positions you accumulate. So like, say maybe you hold a lot
of a specific stock and then this company is getting ready to publish a report on their
performance and in order to hedge that stock you might be able to buy a prediction market position
on whether they're going to outperform or underperform their like earnings right so now
you're protected from the volatility which would happen during the earnings call.
And at the same time, you're still holding your underlying stock.
So I think for Gondor and for what we're building, because we're a more sophisticated DeFi primitive,
what's more interesting for us is financialization of everything, essentially,
and enabling those, I guess, more exotic, sophisticated primitives to be like added to a larger strategy, which a specific trading firm might run.
Maybe like, yeah, they're buying some stocks at the same time.
They're betting on prediction markets around the same company.
And that's how we're achieving some sort of delta neutral strategy.
Right.
But then eventually for, I guess, consumers, prediction markets are just a nice way to express your beliefs on anything that comes to their mind.
I love that. I actually, I didn't even think about it for earning.
Like I knew that you could make predictions on earnings, but thinking of it as a hedging option makes a lot of sense. And that's actually quite fascinating that I never even considered doing that.
So that's, that's really interesting.
I felt like I was, I'm a DGEN or feel like I'm a DGEN and that's not even something I
thought of.
So that's really, really cool.
Thank you for that.
And PolyBot, you guys, I guess you started the Telegram bot and kind of leading into, I would imagine,
focusing on a user experience, simplifying it, making it easy to trade positions. But how have
you seen the user behavior change in prediction markets over the last, let's call it a little
over a year, because I know they first got a lot of attention during the US presidential
election. But what have you seen from the time that it started picking up until now?
So I think the clearest move we see is that the markets are becoming more and more efficient.
If in the past market took time to react to the news, let's say Trump was doing a speech and he would say a certain word and
there was a prediction market on will Trump say the word pause. The market would sometimes
take even 15 minutes to react to Trump saying this word. Right now we see that the importance
of speed and reacting fast to real life events is very important. And this is where we see
the combination with Telegram working so well because news usually
get first to Telegram and to private chat groups, whether it's crypto news or just real
life news.
And that's why when you can trade inside of Telegram in two taps, just see the news and
react to it immediately.
Instead of opening the browser, logging into your MetaMask, typing in the password and trading, which takes a lot of time. We think that optimizing speed and optimizing
speed while copying other traders is probably the most important thing to simplify the user
experience for prediction markets.
Yeah, that makes a lot of sense.
I can imagine, especially with sporting events,
if you're betting during the game or in-game,
speed is something.
Yeah, maybe some things take time,
but as news breaks or as events develop,
that speed is really important,
and I do think it would be...
I wouldn't trust my parents to go quickly, I guess.
Yeah, I can tell you myself that I've watched the Alex Pera
versus Magomed Ankelaev fight.
And the moment Alex Pera knocked him out,
I just bet on Alex Pera and I took like 15% at the moment.
And it was free.
Like I saw it live on TV.
It happened.
happened just who has the first access uh to trade the news yeah no that is really really
Just who has the first access to trade the news?
interesting um i'm definitely going to dive more into that in one second um but gondor that i'll
kind of want to dive into your product and what you guys kind of do. Why, I guess the first question, we talked about it.
You can use your prediction market
or your positions on Polymarket as collateral for DeFi.
What does that unlock for users?
And kind of how does it operate?
Why would someone want to do that to begin with?
If you can talk a little bit about the why, but then going into the benefits and who, I guess, the functionality of how Gondor actually
works. Sure. Yeah. A hundred percent. And thanks for that question. So I guess, first off,
So I guess first off, I guess prediction markets are operating in a similar way as crypto assets in general now, right?
We have different kind of infrastructure being built on top of it, like PolyBot for trading in Telegram, like integrations with other different platforms.
And so we're having DeFi services being built on it as well.
So we're having DeFi services being built on it as well.
And the way how DeFi operates in crypto in general is when you have an asset which you don't want to sell because you think it's going to appreciate.
But at the same time, you need more liquidity to do more trades anywhere else.
You're usually going to say, you might go to Morph, you may go to any other DeFi protocol and borrow against that asset.
to morph or it may go to any other uh d5 protocol and borrow against that asset right so now say if
you provided bitcoin as collateral and then bitcoin increased in price you can repay your loan which
is still a fixed amount plus some interest on top and you unlock the same amount of bitcoin you've
had but that bitcoin is now worth more in usd terms right? Same happens with prediction markets. Maybe you have a bunch of
different positions you've accumulated, and you want to enter more, but you don't have any cash
on hand. So what you do, you have to sell some of them as of right now. And that's why we actually
see lots of risk-free yield essentially popping up on prediction markets. So sometimes maybe there is a market which has already been predetermined essentially.
And there is maybe like a month until it resolves, right?
I don't know.
Difficult to give an example on top of my head, but there are plenty of those.
Like they're called bonds by those prediction market traders.
And so in order to free up liquidity, many traders are selling their
shares at like, say, 99 cents or 98 cents. It's not because they don't believe in this position
anymore. It's just because they need more capital because they see like better capital efficient
opportunities elsewhere. And so they're willing to essentially share some of those profits,
which are left from this position, if you wait until it resolves
with the other people who'd lock up their capital.
So that's what we're solving, right?
Maybe you have a bunch of positions
which are only resolving in 2027,
but at the same time,
you want to trade some more short-term,
fast-paced markets.
So that's why you'd go to Gondor,
you'd put these positions in the lending protocol,
and then you borrow against these positions to have more liquidity.
And I think with DeFi protocols in general, like say Aave, we see lots of volume and TVL coming from looping.
So people are interested in creating essentially like on-chain margin positions in a sense, similar to how you trade on a centralized exchange,
but without any custody, right?
So if you borrow against your Bitcoin,
then you get some USDC,
then you buy more Bitcoin with it.
When you borrow against that extra Bitcoin,
you're essentially looping your position
and creating a margin exposure.
So that's the same primitive
we are building at Gondort as well. So now you can
trade on Polymarket with up to 2x leverage and we'll be expanding to 4 or 5x next year. So
leverage is another product which could be offered through this type of borrowing primitive. yeah i think the overall uh objective is for traders to be able to
profit more with less capital on hand because everybody's capital is limited
yeah that i can't tell you how many times there were times how many times there was an event where
i felt very strongly about it and just wanted to, I would say, double down.
And I did not have capital. So that is, I think it's great going up to leverage and then also just
access and capital while it's stuck in the prediction. I mean, there are so many that say,
will this happen by the end of 2026 or something like that? And to tie up that capital is kind of
a pain. So it's great. I guess the And to tie up that capital is kind of a pain.
So it's great.
I guess the next question I have around that
is kind of what are the risks
and how do you unwind positions?
Because I could see as positions drop in value,
if what you predicted was say,
the market felt like it was less likely to happen than when you initially
got in. How does that process work as far as the risks go and just how you use that?
Right, right. Yeah. So risks are obviously the main question in here if you dive deep.
And we actually published a very nice article on how Gondar works just a few
days ago. So yeah, you can pull it up for people who are interested in going to details. But the
TLDR of that is obviously we'll liquidate positions, right? So if your LTV loan to value ratio went
up beyond 77%, we sell your position on polymarket or actually to be completely accurate we don't
sell the position we hedge so our liquidators are buying the opposite side so maybe like say
we want to liquidate your yes on jd vance being the president in 2028 so instead what we're going
to do is we're going to buy no on jd vance in28. And then we unlock your collateral and we merge them together because Polymarket allows you to turn every two shares of separate out,
sorry, of what's that?
The opposite outcomes into one USDC.
And that's how we essentially like cash out and liquidate a position.
But liquidations don't work all the time, right?
So when markets movements are gradual, maybe like
the position is decreasing over time, that's great for us. In this case, we can easily liquidate.
If position is more volatile, however, or if there is a spike or something specific going on with the
market, then usually what happens is liquidity dries up, right? And we have a few different ways how to prevent,
I guess, bad dap in this case. So first off, we have a liquidation buffer, we're liquidating at
77% LTV instead of 100. So we still have quite some margin in case the position goes down further.
And then we have a few other metrics in place in terms of how we rebalance volume, how we measure the price and everything.
But to be fully fair, I guess, liquidations on binary positions are always difficult.
And in order for us to truly create this system where we have lenders and borrowers and both are profitable, we have to defend lenders from the directional exposure. And if you borrow against a specific position on Polymarket, you are not protected from this
exposure entirely. So that's why next year we're going to be introducing cross-margining or
bundling of collateral, where instead of borrowing against a specific share, you're going to be
borrowing against a bunch of shares
or all of your portfolio at once.
And in this case, even if a single position goes down,
your overall volatility of the portfolio
is significantly less.
And then also it's that we might not even have to liquidate you,
but if we do, we can sell the other positions you have, right?
And another profit of that is not
only for the lender, but also for the borrower, because as a borrower, you usually don't want to
have your volatile position liquidated. So imagine like, say you have a bunch of positions in a
bundle, one position went down 10 cents from 30, whatever. So we are now liquidating it. But then
if we sell the other positions instead, these positions might be on stable markets.
So if you want to have these positions back,
you can re-enter them at around the same price
because there's no volatility happening on those markets.
However, for this specific one,
when it went from 30 to 10,
maybe we sold it at 10
and now it went like back to 50
because there's like some movement on the market going on, right?
So now you don't have the same entry price anymore.
So it's better for a borrower as well
to not get liquidated on a volatile market,
especially on prediction markets
where those can swing up or down.
And yeah, I think that would be an answer overall
to how we handle liquidations.
That is great.
I'm like even more excited for your project,
what you were saying kind of going forward.
That's a really, really unique and interesting way to do it.
And I think it actually,
I would say you're kind of taking what you see
with really good perp decks
and spreading it across that way.
So no, that's super cool.
I want to turn the attention to PolyBot for just a minute.
Why?
So you guys are building on Telegram.
Why did you choose to build inside of Telegram
rather than the typical web interface?
And what are you guys seeing?
What are the benefits that you get from being directly inside TG?
So I think there are two answers to this.
The first one is that Telegram is, first of all, a home for news and a social layer.
Lots of alpha lives inside group chats, whether it's dedicated group chats for alpha
or just groups of friends that share things between each other and one came up with some research, understood a bunch of things, wants to share
his friends with the conclusion and trade it.
And we see it in crypto, like for meme coins, it happens all the time.
Also for just tokens, you have lots of group chats inside Telegram that are meant for traders.
And the same thing happens in prediction markets.
So that's the third thing.
The second thing is we saw the success of Telegram bots for meme coins and for tokens in general,
things like BonkBot or BananaGunBot.
And it's an interface that users are already accustomed to trading inside.
And we thought it makes a lot of sense for prediction markets.
That makes a lot
of sense to me.
It is interesting because we did have
meme coin trading on Telegram was
really insane, so it makes sense that you can
apply the same to
prediction markets.
What were the challenges
that you faced when you were kind of abstracting the
wallets, the deposits, the trading into the chat base UX? I mean, I said earlier, I used it,
it was super clean, super straightforward. And there were, I would say some, I even love that
you could just navigate to whatever kind of market theme you wanted whether it was politics or crypto or
even with inside crypto you could go to airdrops or bitcoin or whatever that kind of mirrored the
polymarket website what what were the hard things about doing that that you guys faced
so i think from day one we wanted to focus on two different things which
is abstracting the complexity of trading and making it as similar to trading on
polymarkets possible. Okay that means that we wanted to make the UX as easy
as possible and also just have a seamless experience so you don't have to
deposit all token we abstract the gas for the users. We deploy the safe wallet for the users. And this way we can give an
experience that is just you open an account, we deploy your safe for you, you just deposit
funds into it and you can trade immediately. I think this part to develop them contain
some technical difficulties.
And the second one was just to create the fastest copy trading.
Right now we're doing copy trading inside two blocks on Polygon, which wasn't easy.
It required us to build our own indexer, build some really like, you know know reduce latency from our software as we went and always benchmark it
and find ways to to cut milliseconds from the trades so i think these were the two main challenges
awesome yeah thank you um opening it up to kind of either of you can pitch in and share your thoughts.
So I'll lead into this with the story.
It was after Thanksgiving, but I was sitting around with some family, and I said that Polly Market was on 60 Minutes.
But we were all sitting around, and that 60 Minutes episode came on, and I was really excited.
I told my family, don't change the channel.
We want to watch this and talk about it.
And they, I would say everyone immediately grasped the concept and they understood it right away.
And they were saying, this is really cool.
This is interesting.
But I would say there still is an element of prediction markets being niche compared to, I would say, gambling in general.
Like you look at, I don't know, FanDuel has much bigger volumes, much, much larger.
So it's almost like the public understands it, but prediction markets still aren't adopted as widely. What do you guys think the biggest barrier
to that mainstream adoption is for prediction markets?
We'll start with you, Gondor, if you have thoughts on that,
and then we can turn it over to PolyBot.
Sure, sure. The biggest barrier. That's a good question.
I think that option is already happening.
And probably what's interesting for me specifically is that we don't see so much
volumes or so much trades being made compared to the informational, like, I guess, space we have
around production markets. So lots of people are discussing them, but not so many are trading.
I think one of the barriers right now would probably be liquidity like if any professional
trader or any crypto trader comes to prediction markets they're usually a little bit frustrated
with how high the slippage is how like big the spreads are and all of that right and that's a
problem still yet to be solved i I think market making on prediction markets
is very difficult.
And if we do have more liquidity,
then we definitely have an easier time
attracting more players
and that would increase the liquidity even further.
So yeah, that would be one.
But then I guess, I mean,
some people are arguing like user experience,
generally like how you're on board on prediction markets,
how you figure things out.
But in my opinion, it's pretty smooth,
especially now that different apps are integrating prediction markets.
So you don't have to go to Polymarket or Kyle Schuch
and trade on Robinhood, let's say, right?
And I guess that's how the UX issues will eventually be solved.
It's not necessarily Polymarket who'd provide the best user experience,
but rather just a bunch of apps on top who can ship faster and iterate better.
Yeah.
So for me, the path would be liquidity.
I think that's probably the major one.
And it's not necessarily going to help to onboard as many consumers as
possible but for larger professional traders institutions and everything liquidity would be
the key do you think part of the problem is there are so many prediction markets and not only
prediction market platforms but markets in general because i just like i'm on Polymarket right now and you have some markets that have
$50 in volume, $100 in volume. And is that taking away the liquidity from the bigger,
I don't know, million dollar in volume where you have this really, really deep liquidity and the
spread is one cent or two cents at a time versus some markets have these 50 cent spreads so making
the prediction is bad and would would it be better to wait on the bigger market until
we have that deeper liquidity i'm just curious your thoughts on that i don't think it really
matters because essentially market makers are properly incentivized to provide more liquidity
on more liquid markets right so if trading is happening more actively then there's more to
make for a market maker right um and that's that means that uh total profits are larger so they
deploy more liquidity in it uh the problem i think is just market making by
itself right because those are binaries they don't have any uh i guess substance to them it's just
pvp in pure um and also there's it's very difficult to hedge those outcomes right
so in traditional markets like you can hypothetically say market make between a spot and a per like exchange rate where you take the opposite positions.
And then like you try to get some delta neutral returns from the fund from the funding rates.
But in this case, you don't really have the other position to hedge with.
Usually the other position is just the opposite side of the same market
and both are like bounded to one another.
So liquidity is usually,
I think the way how Polymarket Sorterbook works
is they mirror the limit orders.
So basically if you like put a limit order to buy yes shares,
they'll put like a mirroring order to sell no shares
because this is essentially like an equivalent.
The direction doesn't make sense.
So yeah, probably the problem is rather
how you market make, how you hedge,
how do you as a market maker avoid getting piped out
if this event actually hits
and then the odds are spiking from 20% to 100%, let's say,
and now you've got a directional loss.
So lots of people are trying to solve it,
but I don't think number of markets makes difference.
No, that's a good point.
I just want to, it's a question I like to ask everyone,
especially with your focus on liquidity.
I mean, Aglaire obviously talks about fragmentation
that we have in the space and unifying liquidity.
So it's always interesting to me to get kind of
what people think will solve liquidity problems.
Polybot, I was wondering what you think about mobile first apps and the bot-based experiences shaping the onboarding.
I know PolyMarket has done a lot of work coming out with their application on iPhone. It's always one of the most downloaded apps. Calci is doing a lot with
their mobile app as well. You are obviously building on Telegram. So how do you see that
mobile side developing over the next year to two years?
So the way I see it, there are two types of users of prediction markets.
I think Shane also talked about it in the 60 Minutes interview.
There are consumers of prediction markets and there are traders in prediction markets.
And in mobile right now, Polymarket does let you trade prediction markets pretty easy and
also consumed via the app but I
think once you enable consuming prediction markets being more easy
inside the chat interface it makes it much more accessible to a larger
audience of people just an example I can take I can give from a conversation I
have a while ago we talked in a a group chat about the odds of lighter, the lighter airdrop being above
2 billion FDV.
And you know, it was immediate to ask Polybot like, hey Polybot, what are the odds for lighter
FDV being over 2 billion?
And then you can consume the data from prediction markets inside the group,
which exposes a lot more new users for prediction markets.
I think it probably will start with consuming,
then go to trading for most retail users.
Not talking about institutions, of course.
Yeah, that's a really interesting point
about consuming the prediction markets.
I think it makes a whole lot of sense
why all of these platforms are integrating to X
or these news websites, just to give the odds.
But yeah, I think about it too,
where it almost replaces AI in the sense of, yeah, people can just,
what I would say, yap about it, just kind of talk and say things.
But I do think the traders of the prediction market,
because you have skin in the game, you're actually making,
I would say your prediction has more weight than I could go on X right now and say
Leiter's airdrop will be a hundred billion dollars,
which would be absolutely insane.
But if people are scraping data and I got a lot of likes on it or something
like that,
maybe Grok says,
Oh yeah,
this is something that's possible versus I would never put money on it being
over a hundred billion dollars. Not financial advice. I I hope letter does well. I hope everyone in this space
succeeds, but I think that's a little bit high, uh, for now, but it is interesting when you have
this consumer data almost. Um, I know there was a lot of controversy around the, um,
the fires in California or last year, early this year at some point, um, when it was going on and
people were just saying, is it right to profit off this? But I know a lot of other people are
saying I have family in California and I want to know exactly what's going on. And the people that
are on the ground, um, that are, know what's happening.'s happening it's a really good indicator and
predictor of what where the things are at when it's financially incentivized so I think it's
I do think it's interesting to think about I would say mobile first and just integrating it
into the daily life like even right now you watch I watch a lot of sports and on every sports channel,
they tell you the, the Vegas odds that a team's going to win. But if you have that for other
things in real life, which prediction markets can give you, whether it's who wins the Grammys,
what are the odds there? It's a, it's a lot more easy to digest. And I would say,
I think the evidence is very clear that prediction markets are more accurate than polls over the long term and when you can fail them head to head over time.
So for someone who's listening to this space for the first time and say, oh, wow, prediction market sounds really cool.
I want to try my hand in it.
What would you say the key risks are that new users underestimate when entering prediction markets?
What do they have to be aware of and what are the pitfalls that they fall into?
And I'll open it up.
Whoever wants to start talking, you guys can go ahead.
Yeah, so I would say read the resolution rules, understand the market and what results it.
Some markets are very simple to understand, like, you know, sports games, will Barcelona
be trial Madrid, but some markets have different resolution rules, especially like politics
and Middle East attacks that, you know, you're not sure if the border of Iraq or Iran and where did the attack count in.
So it's very important to read it, understand it,
and it risks a lot the way you trade your position.
Do you think there's a problem with...
Maybe not a problem.
I'm trying to think of how to phrase this but i know that we
did have uh like war invasions i know there was huge controversy around the dead zelinski wear
a suit when he wore something that was um certainly not a traditional two-button suit that everyone
recognizes as a suit but it was also very close
to a suit um do you think prediction markets should be dealing with ambiguity um and things
that can be i would say human interpretation versus the clear-cut rules who wins this game or
uh who wins best artist of the year, who wins the selection versus like,
I don't know, I think even temperature,
like clear, cut and dry, this is what happens versus,
I would say you see it mostly in the political market
where you can have,
events can be interpreted different ways
based on the framing and technicalities,
which I would say is hard,
but should prediction markets be dealing with that when it comes down to actual financial markets?
Yeah, sure. I can take that one probably. So interestingly, I guess there's been a debate
on whether people want to trade objective or subjective markets from the first place.
And there's even a subcategory of prediction markets
called opinion markets,
which are basically markets on something
which cannot properly be resolved.
So like say whether apples or oranges taste better.
And usually the way how it's resolved is by capital, right?
So who has the most capital placed on a specific bet
is a winner.
Basically, you have to predict what the rest of the batters think will be the winner,
sort of like the game theory type of model.
I don't really like it myself, to be honest.
I think it's very limited and easy to be manipulated.
And probably those debated markets are usually coming down to an instance of opinion markets where those whales on UMA just move the price with their capital.
And basically whoever has the most capital staked in tokens will decide the outcome, right?
And then those debates never get handled properly.
or get handled properly.
And generally, I don't think there has been
any positive impact of those controversial markets
for Polymarket or for anyone else.
So my point would be that we have to write the resolutions
as clearly as possible.
And then also, I guess the TVL or like not in this case it's rather like a
market cap of a token which has been used for resolution should be like orders of magnitude
larger than the uh capital which is being traded on the market so i think uma token right now has
like i don't remember exactly but maybe 150 mil in market cap uh that means that it's very oh it's actually down it's
down to 90. so 90 mil and fdb right what it means is uh of uh uma tokens for like a few, maybe 20, 30 mil, right?
And that means that this will be enough for you to manipulate a market on Polymarket,
which caps the total, I guess, exposure Polymarket traders can have to those 10, 20, 30 million bucks, right?
Because if there's
more, if there's like a hundred mil locked on a specific market on polymarket, then you have an
incentive to go buy those UMA tokens. And now you can manipulate the market in order to profit from
polymarket traders, right? So yeah, it's important to keep the resolutions clear and it's important
to keep the Oracle larger than the underlying system.
Yeah, I do think there's, I will say kind of what I've said as soon as I started dabbling in prediction markets, I think there's really, really great potential.
And I can see the end game, but there will definitely be challenges along the way. And I do think oracles and ways that markets get resolved.
I wrote a while back the difference between different resolutions,
different ways that oracles can actually come to a conclusion.
There's the UMA way,
and then there's some other different protocol mechanisms, which I think is really interesting.
And it will be interesting to see how the market resolves those.
I also think about what the legal implications for something like that are.
I mean, it's one thing when you have completely decentralized,
call it, you can't, anyone can do it it they're permissionless and they're not regulated
um by any by anyone uh any one government or anything like that but i do think it gets
interesting especially with polymarket just getting a license in the u.s what's going to
happen when people uh are we going to see a lot of lawsuits against polymarket or against uma because
you have people that disagree with this resolution i know i think one of the big ones um that was
really fascinating was there was a sporting event and i forget the two teams but one team won um
but someone with uma just said the other team won put out the bounty uh and locked
it and because nobody challenged their resolution uh the outcome was different it was a game that
ended i don't know very late in the u.s time zone where the game was being played where all the fans
would be uh and people betting on it because no one challenged the resolution it went through,
and I think that's definitely a big hiccup.
I think that I'm very curious to see how glaring issues like that get solved.
But yeah, that was just what I was going to say.
Oops, I saw we lost Gondor.
I will bring you back on stage.
But yeah, the next question, and maybe this is a good question for you,
but I actually want to start with PolyBot because in your platform, you kind of just make the trades
and I could be wrong, but I didn't actually see the market and positions. So when trading on
PolyBot, how do users think about the slippage and market
depth when they're making the prediction environments? Is that going to be a problem
going forward? How should people really think about that? Because you could see, I would say
it's a meme at this point when people talk about prediction markets are going to solve everything
in the future.
And somebody talked about if you're a politician, you buy and you have no chance to win,
you buy prediction markets that you are going to win.
And then you can use that to pay people and give them a chance.
But the liquidity depth wouldn't work out for the economic.
So with PolyBot, how are you thinking about that slippage on trades?
So first of all, before you execute a trade on Polybot,
you can see the price impact that you're making
and the average price you will be buying in.
So it is fully transparent to the user.
I'm sorry, can you repeat the other part of the question
I was just saying
how are you thinking
about it but that kind of answers
the question as far as the risk that
users go
but yeah
Gondor I didn't know if you had any thoughts on the
slippage as well for
a new user or anything they should be aware of.
Sure. Yeah. So for slippage, I mean, probably the most important thing here is when somebody posts those arbitrage opportunities or something on Twitter.
It's usually a very illiquid bet one could make.
And maybe you have to lock up like, I don't know, 10 bucks for a year in order to get
1% on that.
So yeah, the order books and everything usually make it clear.
And I think Polymarket also recently introduced a pop-up where like, say, if you place a large
bet and it causes slippage it first asks you to
double check that like hey you're gonna move a market by like more than 10 percent are you sure
you want to do that and i think that's a good user experience uh that's something we at gondor
are going to be doing as well so in our user interface when you trade with leverage and
everything you already see like the price impact on how much
you move the market. But yeah, definitely the more you ask the user, the betters probably just
in case, because those markets are very, very liquid and usually traders are not used to those
types of illiquidity. But yeah, hopefully we'll get it solved. I i mean now that we also have all of those integrations
coming in i think another solution to this liquidity problem is that we'll just have
more people placing orders right and maybe it's not just the market makers but also the retail
users who are creating this extra liquidity on top of cultural markets, for example.
Right.
And hopefully the other books will get deeper because of that.
And it will be a better experience for everybody.
Awesome.
Yeah, thank you.
We are coming up on time.
This was a great space.
I didn't even realize how late it was.
So closing out, I want to think about the future and where
prediction markets are going. You guys, if you can give, call it a accurate kind of what you see
the future doing. And then kind of if it were a prediction market, it would have an under 10%
chance of happening, but a hot take that you think that is something that could happen
with prediction markets over the next couple of years. So Paulie, we'll start with you. What
do you see happening over the next year for, I would say, greater than 50% odds? And then what's
something that you would put the odds at less than 10% for prediction markets?
put the odds at less than 10% for prediction markets.
You there, PolyBot?
We may have lost them.
Okay, Gondor, question to you.
What would you say is a market that you would say greater than 50% chance and then a market with less than 10% chance, but you would still bet on that could happen over the next year to two years in prediction markets?
Sure, sure. So I guess the more than 50% chance one would be mass adoption in general, like we already see this trend of onboarding different financial apps in prediction markets.
And I think that eventually the volumes will not be coming from polymarket.com or from
kalshi.com, but rather from all of those wrappers on top.
And my personal belief is that these wrappers would be pre-existing wrappers.
So like there's a bunch of different, I guess, trading terminals being built.
But like the volumes will be coming from existing fintech apps where like say you're just you're a Revolute user and maybe you are investing in different stocks.
But now you can also invest in prediction markets. It's actually might be a different case for Telegram specifically or like projects like Polybot,
because there you don't really have a specific player unless Telegram itself is going to integrate
prediction markets natively, which I don't think they will.
But for those, I guess, VAB interfaces or app interfaces, it's probably going to be the existing
players because we already have the distribution.
And then for the unlikely scenario,
but that's something we are betting on with Gondor as well,
is that institutions will come
and institutions will be using prediction markets
as a way to hedge,
as a way to create those financial derivatives
I was talking about.
And basically to extract their
specific beliefs they're trading on out of the overall noise right so when you say buy a specific
stock uh the price of a stock is usually motivated by like hundreds of different criteria it can be
like the overall market conditions it can be how this company performs specifically different reports.
Maybe what's the price of like related assets like oil, gold, whatever.
But then maybe you're a trader who did a very thorough research on the fact that this company will, I don't know, open a new lab in some specific location.
Right. And you think that this lab will actually be profitable for a company.
So you want to get exposure to that.
And because of that, you buy the stock.
But the stock can be moved by all kinds of different things.
So instead, what you can do is you can go to a binary market and bet on this specific
decision made by a specific company.
And then you're getting a larger upside.
Plus, you have your belief isolated, right?
So countless examples for it maybe you think
that like oil is gonna go up because of a specific reason like maybe a war somewhere is gonna happen
right so now you can bet on those politics markets instead to isolate that belief and yeah i think
that's what's going to be happening from our perspective and we already see this institutional
interest from polymarket when they raised to build
from New York Stock Exchange, right? That was clearly not just the capital they needed, but they
also wanted access to the Wall Street and Shane was actually talking about it on TBPN, I think,
or something. So yeah, for us, what we expect is institutions onboarding in prediction markets,
and then the game's going to level up,
and Gondor will be there to max out on capital efficiency for those traders.
That would be very exciting.
You got me feeling very bullish on prediction markets,
so great job there.
No, I do think it's a very, very exciting future. And I do think, I would say institutions,
the level to which they're going to come in prediction markets is
up for debate. But like you said, with the two bill raised on New York
Socket Exchange, institutions definitely want some
sort of exposure to prediction markets, especially as a
financial product. PolyB polybot i saw you unmute
are you back yes we're back sorry my wife i disconnected for a sec happens to the best of us
um so yeah if you could give a prediction for the next couple years one that you think the market
would price at greater than 50 percent uh and one that you think it would price at less than 10% chance of happening.
But you would make that prediction for the upside, if you could give us those two.
So I think that the over 50% is that over the next few years, prediction markets are going to bypass traditional sportsbooks.
And I think the reason for it is that traditional sportsbooks earn from the spread, earn from
giving you worse rates where prediction markets are just entirely PVP and then the incentive
is that if the market is liquid enough and enough people trade it and the right market makers are there, the spread should be thinner and users should come because
they get better rates.
So this I think has more than 50% to happen.
Less than 10%.
I will have to think about this one.
I don't have anything good in mind right now.
That wouldn't sound like I'm making up something.
I'm sorry.
It's okay. That was a question that I thought
of in the moment.
It's tough. When you think something's
going to happen, you would put the odds. I think
everyone in general would put it at
above 10% for you personally.
So it's certainly something tough to think of.
But thank you guys.
So we will wrap up the space.
PolyBot, if you want to share how can people use PolyBot, leave us with some final words,
and how to get in touch with you if they ever want to.
Sure.
So to use PolyBot, you can use our Telegram bot at TradePolyBot, it's the same
handle as our Twitter. It takes less than two minutes to set up an account and start trading.
And yeah, we just released the fastest copy trading on Polymarket and we're releasing features
basically every day. So stay tuned. Awesome, thank you. And Gondor, final words for you. Where can people
find Gondor? How can they sign up for the waitlist on what you guys are building?
Of course, 100%. So first off, you can follow us on Twitter itself. Then gondor.fi is our website.
You can find a sign-up form there.
And once you sign up, we'll get you approved in just a little bit.
We're currently getting everyone in,
and First Traders already got their invites.
So you'll be there soon if you apply.
And, yeah, it was great speaking,
and thanks so much for hosting the space.
Excited to be here.
Awesome. Thank you all.
Yes, everyone in the audience, please give
PolyBot and Gondor a follow. They are going to be building some really, really great things.
They already leaked some alpha, kind of what they're working on. I know I am excited. I am
looking forward to seeing where predictions go in 2026 and beyond. So thank you everyone for being here. And we will talk to you again next week.
Take care, everyone.
Thank you, Timmy.
Thank you, Arseni.
Great being here.
Thank you, everyone.
It was great. Thank you.
