Joined April 2013
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It would be useful to break down the stock of a company into its component parts and have prediction markets on them:
- Earnings
- Products sold
- Headcount
- Compute spend
- FDA approval
Why are there such few markets on this and why don't they have volume?
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My best guess is these markets could be considered securities or derivatives of securities, so the CFTC maybe cautious
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“Don’t judge a book by its cover” -> everyone judges books by their cover
“Don’t focus on status” -> everyone is obsessed with status
“Be yourself” -> everyone is performing
All advice is a confession about human nature - that the opposite behavior is near-universal
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Today, the Third Circuit sided with Kalshi over New Jersey. This is a big deal. It's the highest level ruling on this issue to date.
The fate of the industry hinges on two phrases in a law written after the 2008 financial crisis. What defines a 'swap'?
dopaminemarkets.com/p/predic…
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The case will likely make it to Supreme Court but it cuts across typical ideological viewpoints
- Conservative justices are textual originalists, which favors Kalshi since the swap definition is broad. But they are also committed to states’ rights, which favors the states.
- Liberal justices are typically pro-federal regulatory authority but skeptical of financial industry arguments and sympathetic to consumer protection.
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My assessment: Supreme Court will side with Kalshi and CFTC
The definition of ‘swap’ in the Dodd Frank was intentionally broad
Unlike the PASPA case, there's now a federal body (CFTC) that has a clear mandate to regulate swaps. So federal preemption supersedes states' rights
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Major win for Kalshi today.
14 states, the CFTC, and billion dollar companies are in a knife fight over the definition of a swap:
- Does a sports game have economic consequence?
- Does the game need to directly drive that consequence, or can it be indirect?
The Third Circuit sided with Kalshi today vs. New Jersey:
- Sports games do have economic consequences. e.g. sponsors, TV deals
- Indirect consequences count
This is significant because it's the first federal appeals court to rule on this question, and it sides with Kalshi over state regulators.
The courts are split overall:
- Kalshi won in NJ, Tennessee, Northern California
- States won in Ohio, Massachusetts, Nevada
- CFTC is suing Arizona, Illinois, Connecticut on Kalshi's behalf
This is likely headed to the Supreme Court. The fate of prediction markets rests on this ruling.
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We’re saints offline (drink less, smoke less, have less sex) but degenerates online (gamble with leverage, watch porn, doomscroll TikTok)
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The are only three posts on Instagram: someone gets married, someone goes to Japan, someone runs a marathon
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Excellent post on how crypto is finance but finance is expanding.
1. We’re headed towards a billion active traders. More people now have an “edge” investing in what they know - TikTok trends, games they play, products they use.
2. Permissionless markets allow users to express new behaviors that later pull regulators and institutions forward. E.g. Polymarket ran offshore when banned, then market proved demand, and regulation followed.
3. Markets, price signals, prediction market outcomes, and onchain flows become inputs that any application and agent can act on.
Was fun to riff with Jesse on these ideas!
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Also… Dopamine Markets cited here^
dopaminemarkets.com/
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Shreyas Hariharan retweeted
Feb 13
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Napoleon defined military genius as “the man who can do the average thing when everyone else around him is losing his mind.”
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