A prediction market is only as good as the participants. People with the insider information and highly lucrative information necessary to forecast FTX-like catastrophes generally don’t participate in prediction markets, especially not free ones, and probably won’t any time soon. That’s something that financial and analyst firms can do, because they have ways to guarantee that their org’s members are safe, and that they won’t get targeted by all sorts of vicious people out there.
Startups are fundamentally incapable of this. Wall street is highly capable of this, possibly also legal and government contractors that I’m not aware of, but it’s only possible because those systems are fundamentally closed and ingrained inside large nontransparent institutions that have built up networks of trust for decades.
A prediction market is only as good as the participants. People with the insider information and highly lucrative information necessary to forecast FTX-like catastrophes generally don’t participate in prediction markets, especially not free ones, and probably won’t any time soon. That’s something that financial and analyst firms can do, because they have ways to guarantee that their org’s members are safe, and that they won’t get targeted by all sorts of vicious people out there.
Startups are fundamentally incapable of this. Wall street is highly capable of this, possibly also legal and government contractors that I’m not aware of, but it’s only possible because those systems are fundamentally closed and ingrained inside large nontransparent institutions that have built up networks of trust for decades.