Prediction markets are not magic. It’s just the principle of stock market applied to more broad type of questions.
Whether a company commits a huge fraud that will bancrupt it on reveal and lead to billions of dollars in investments being lost, is among the questions that regular stock market is answering.
Magic not needed… someone sees that SBF offers 3 billion to buy a piece of twitter, gets spooked and aggregates it on the prediction market → this raises the probability that it’s doing something shady (then any other assessment will be aggregated) now when FTX offers EA some money, we know the probability of them doing something shady… have some info to make a better decision (I noticed Scott Alexander writing about this)
If this sort of evidence wasn’t enough to significantly drop the prices of FTT token on the financial market why would it be enough to significantly drop the confidence in the company on prediction market?
Regular stock markets are already extremely liquid prediction markets for the trust in the companies.
Prediction markets are not magic. It’s just the principle of stock market applied to more broad type of questions.
Whether a company commits a huge fraud that will bancrupt it on reveal and lead to billions of dollars in investments being lost, is among the questions that regular stock market is answering.
Magic not needed… someone sees that SBF offers 3 billion to buy a piece of twitter, gets spooked and aggregates it on the prediction market → this raises the probability that it’s doing something shady (then any other assessment will be aggregated) now when FTX offers EA some money, we know the probability of them doing something shady… have some info to make a better decision (I noticed Scott Alexander writing about this)
If this sort of evidence wasn’t enough to significantly drop the prices of FTT token on the financial market why would it be enough to significantly drop the confidence in the company on prediction market?
Regular stock markets are already extremely liquid prediction markets for the trust in the companies.