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XO Market is betting that the way forward for prediction markets received’t be dictated by centralized groups deciding what folks can commerce on, however by customers themselves.
The startup, which simply closed a $6 million seed spherical led by 20VC, Picus Capital, Coinbase Ventures, Enterprise Collectively and a gaggle of angels together with Australian cricket captain Pat Cummins, is positioning itself because the “YouTube of prediction markets,” based on co-founder Ali Habbabeh.
“In the present day’s main platforms like Kalshi and Polymarket act extra like Netflix,” Habbabeh advised CoinDesk in an interview. “They determine what markets exist. We’ve flipped that mannequin totally. On XO, customers create the markets themselves.”
The excellence is vital. Whereas incumbents depend on inner groups to curate and checklist prediction markets, XO permits people or corporations to spin up their very own markets, set parameters and charges, and let others commerce on them. The outcome, Habbabeh mentioned, is a broader, and sometimes extra inventive, set of alternatives.
“We imagine the way forward for prediction markets is user-generated. One of the best markets aren’t determined by a platform, they emerge from the group.”
Mainnet beta launch
The mannequin seems to be gaining traction. Since beginning its mainnet beta in mid-November, XO has generated greater than $150 million in buying and selling quantity, attracted over 30,000 customers and seen greater than 600 user-created markets. An earlier pilot started in April 2025 with a testnet rollout.
“The metrics look sturdy as a result of the incentives are aligned,” Habbabeh mentioned. “For those who create a compelling market, folks commerce on it. For those who don’t, it dies naturally.”
That “pure choice” dynamic could also be a double-edged sword. Even Habbabeh factors out that competing user-generated platforms like 9 Lives and Heat Protocol struggled to transform the idea into significant liquidity, leading to inactive markets or minimal buying and selling exercise.
It’s unlikely that Polymarket or Kalshi will provide user-generated markets, based on Habbabeh, as a result of they would want to search out market makers keen to supply liquidity for hundreds of various occasions and must alter their infrastructure. Their present fashions are additionally extraordinarily worthwhile, he added.
Prediction markets are gaining traction past their area of interest origins, drawing elevated curiosity from retail merchants and institutional individuals alike as a brand new venue for pricing uncertainty. Advances in digital-asset infrastructure have lowered limitations to entry, whereas a collection of high-profile political and financial occasions has underscored the constraints of conventional forecasting instruments.
The result’s a rising variety of platforms the place contracts tied to real-world outcomes are traded with rising liquidity, positioning prediction markets as an rising, and frivolously regulated, complement to standard monetary markets.
Complete trade quantity jumped roughly fourfold to greater than $60 billion in 2025, up from about $15 billion–$16 billion the 12 months earlier than, with platforms like Polymarket driving a lot of that progress.
On Polymarket particularly, month-to-month buying and selling exploded from simply $54 million firstly of 2024 to over $2.6 billion the next November, serving to push cumulative quantity previous $9 billion in a single 12 months.
XO Vaults
Alongside its core platform, XO is getting ready a brand new product geared toward “democratizing” one other key a part of the ecosystem: market making.
The forthcoming “XO Vaults” will permit customers to pool capital into methods that present liquidity throughout prediction markets, one thing historically dominated by skilled companies.
“On platforms like Kalshi or Polymarket, liquidity is managed by a handful of huge market makers,” Habbabeh mentioned. “With XO Vaults, anybody can turn out to be a market maker.”
Customers will be capable to create vaults tied to particular methods or classes, corresponding to sports activities or politics, and earn charges by supplying liquidity. Others can put money into these vaults, successfully gaining publicity to market-making returns with out actively buying and selling.
“It’s much like copy buying and selling, however for liquidity provision,” Habbabeh mentioned. “We’re concentrating on yields of round 8% to 10% yearly based mostly on what market makers sometimes earn.”
The product, anticipated to debut inside weeks, might introduce a brand new yield primitive in decentralized finance, mixing prediction markets with passive earnings methods.
“Not everybody desires to wager on outcomes,” Habbabeh mentioned. “Some folks simply need to earn from the exercise round these markets.”
Parlays
The XO staff can be creating a characteristic it says might reshape how parlays work in prediction markets.
“It’s not your typical copy-paste of sportsbook parlays into prediction markets,” mentioned Habbabeh.
The characteristic, tentatively named “XO Tales,” goals to provide customers extra inventive management by linking a number of outcomes past conventional parlays. Although particulars stay restricted, the staff says pricing will probably be dynamic, providing a brand new tackle prediction markets.
Constructed on XO Vaults, the system is supposed to assist complicated, multi-outcome constructions with out merely aggregating current trades. Habbabeh shared few particulars, however advised it might reshape how customers take into consideration and use parlays.
One of the best content material comes from customers
Regardless of elevated regulatory scrutiny round prediction markets, significantly within the U.S., Habbabeh mentioned he believes XO’s onchain, permissionless design might provide benefits.
“Every part on XO is clear and onchain,” he mentioned. “That places us in a distinct class in comparison with extra centralized platforms.”
For now, the main focus stays on progress and product enlargement.
As XO builds out its ecosystem, Habbabeh is assured the user-generated mannequin will proceed to distinguish it.
“The web confirmed us that one of the best content material doesn’t come from centralized studios, it comes from customers,” he mentioned. “We predict prediction markets will comply with the identical path.”
Learn extra: AI brokers are quietly rewriting prediction market buying and selling