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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, Venture Together and a gaggle of angels together with Australian cricket captain Pat Cummins, is positioning itself because the “YouTube of prediction markets,” in accordance to co-founder Ali Habbabeh.
“Today’s major platforms like Kalshi and Polymarket act more like Netflix,” Habbabeh instructed CoinDesk in an interview. “They decide what markets exist. We’ve flipped that model entirely. On XO, users create the markets themselves.”
The distinction is essential. While incumbents rely on inner groups to curate and record 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 consequence, Habbabeh mentioned, is a broader, and typically extra artistic, set of alternatives.
“We believe the future of prediction markets is user-generated. The best markets aren’t decided by a platform, they emerge from the community.”
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 strong because the incentives are aligned,” Habbabeh mentioned. “If you create a compelling market, people trade on it. If you don’t, it dies naturally.”
That “natural selection” dynamic could also be a double-edged sword. Even Habbabeh factors out that competing user-generated platforms like Nine Lives and Warm Protocol struggled to convert the idea into significant liquidity, leading to inactive markets or minimal buying and selling exercise.
It is unlikely that Polymarket or Kalshi will provide user-generated markets, in accordance to Habbabeh, as a result of they would wish to discover market makers keen to present liquidity for 1000’s of various occasions and would have to 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 sequence 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.
Total 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 making ready a brand new product aimed toward “democratizing” one other key a part of the ecosystem: market making.
The forthcoming “XO Vaults” will enable customers to pool capital into methods that present liquidity throughout prediction markets, one thing historically dominated by skilled corporations.
“On platforms like Kalshi or Polymarket, liquidity is controlled by a handful of large market makers,” Habbabeh mentioned. “With XO Vaults, anyone can become a market maker.”
Users shall be ready to create vaults tied to particular methods or classes, resembling sports activities or politics, and earn charges by supplying liquidity. Others can spend money on these vaults, successfully gaining publicity to market-making returns with out actively buying and selling.
“It’s similar to copy trading, but for liquidity provision,” Habbabeh mentioned. “We’re targeting yields of around 8% to 10% annually based on what market makers typically 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 everyone wants to bet on outcomes,” Habbabeh mentioned. “Some people just want to earn from the activity around those markets.”
Parlays
The XO workforce can be growing a function 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 function, tentatively named “XO Stories,” goals to give customers extra artistic management by linking a number of outcomes past conventional parlays. Though particulars stay restricted, the workforce says pricing shall be dynamic, providing a brand new take on prediction markets.
Built on XO Vaults, the system is supposed to help complicated, multi-outcome constructions with out merely aggregating present trades. Habbabeh shared few particulars, however prompt it might reshape how customers take into consideration and use parlays.
The finest content material comes from customers
Despite elevated regulatory scrutiny round prediction markets, notably within the U.S., Habbabeh mentioned he believes XO’s onchain, permissionless design might provide benefits.
“Everything on XO is transparent and onchain,” he mentioned. “That puts us in a different category compared to more centralized platforms.”
For now, the main target stays on progress and product growth.
As XO builds out its ecosystem, Habbabeh is assured the user-generated mannequin will proceed to differentiate it.
“The internet showed us that the best content doesn’t come from centralized studios, it comes from users,” he mentioned. “We think prediction markets will follow the same path.”
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