A few simple thoughts on prediction markets: 1. How can we understand that permissionless market creation lacks long-tail liquidity and has no oracle determination? 2. How can we understand that borrowing and leverage based on binary options (both somehow count as one thing) are a bit ridiculous? 3. How can we understand that using a (not carefully designed) bonding curve to price Yes and No can easily become unanchored, referring to Pendle's PT/YT? 4. How can we understand that LLMs won't perform significantly better than your regression models in time series predictions, and that having AI predict event probabilities isn't any simpler than predicting price behavior? 5. How can we understand that with different determination rules, the odds of the same event on different platforms will naturally differ, and the so-called arbitrage here is not risk-free? 6. How can we understand that zero fees and zero income are two different things, see Robinhood. These six points came to...
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