Mantic Monday: The Monkey's Paw Curls

12 snips

Jan 30, 2026

Conversation about the explosive growth of prediction markets and how volume shifted from geopolitics to sports betting. Discussion of regulatory differences shaping market offerings and notable contested resolutions. Stories of alleged insider trading and oracle disputes. Speculation on future directions: decision-market designs, AI superforecasters, and play-money bot markets.

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INSIGHT

Markets Miss The Biggest Disagreements

Many high-impact policy questions are long-horizon, conditional, or hard to resolve, so markets avoid them.
Platforms' market selection leans toward trivial or easily resolved questions instead of pivot issues.

ADVICE

Specify Clear Resolution Rules

Design clear resolution criteria to avoid frequent disputes and 'rules cuck' outcomes.
Use consensus reporting and explicit definitions so markets resolve as users expect.

ANECDOTE

Zelensky Suit Market Sparked Oracle Drama

Polymarket saw massive bets on whether Zelensky would wear a suit, producing long debates over 'suit' definition.
Media language shifts later complicated decentralized oracle voting and left true-believers unsatisfied.

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The Monkey's Paw Curls

Isn't "may you get exactly what you asked for" one of those ancient Chinese curses?

Since we last spoke, prediction markets have gone to the moon, rising from millions to billions in monthly volume.

For a few weeks in October, Polymarket founder Shayne Coplan was the world's youngest self-made billionaire (now it's some AI people). Kalshi is so accurate that it's getting called a national security threat.

The catch is, of course, that it's mostly degenerate gambling, especially sports betting. Kalshi is 81% sports by monthly volume. Polymarket does better - only 37% - but some of the remainder is things like this $686,000 market on how often Elon Musk will tweet this week - currently dominated by the "140 - 164 times" category.

(ironically, this seems to be a regulatory difference - US regulators don't mind sports betting, but look unfavorably on potentially "insensitive" markets like bets about wars. Polymarket has historically been offshore, and so able to concentrate on geopolitics; Kalshi has been in the US, and so stuck mostly to sports. But Polymarket is in the process of moving onshore; I don't know if this will affect their ability to offer geopolitical markets)

Degenerate gambling is bad. Insofar as prediction markets have acted as a Trojan Horse to enable it, this is bad. Insofar as my advocacy helped make this possible, I am bad. I can only plead that it didn't really seem plausible, back in 2021, that a presidential administration would keep all normal restrictions on sports gambling but also let prediction markets do it as much as they wanted. If only there had been some kind of decentralized forecasting tool that could have given me a canonical probability on this outcome!

Still, it might seem that, whatever the degenerate gamblers are doing, we at least have some interesting data. There are now strong, minimally-regulated, high-volume prediction markets on important global events. In this column, I previously claimed this would revolutionize society. Has it?

https://www.astralcodexten.com/p/mantic-monday-the-monkeys-paw-curls