Headline: XO Market wants to be the “YouTube of prediction markets,” bets user-created markets will outcompete Polymarket and Kalshi XO Market is rolling out a new playbook for prediction markets: put market creation in users’ hands. The startup — fresh off a $6 million seed round led by 20VC, Picus Capital, Coinbase Ventures, Venture Together and angels including Australian cricket captain Pat Cummins — says centralized platforms that curate which events people can trade are yesterday’s model. “YouTube versus Netflix,” co-founder Ali Habbabeh told CoinDesk. “Kalshi and Polymarket act like Netflix — they decide what markets exist. On XO, users create the markets themselves.” That user-generated approach, XO argues, produces a wider and often more creative slate of markets because the community, not an internal team, signals what’s interesting. Early traction supports the claim. Since launching its mainnet beta in mid-November (after an April 2025 testnet pilot), XO has seen more than $150 million in trading volume, onboarded over 30,000 users and hosted 600+ user-created markets. The platform’s model relies on a kind of “market Darwinism,” Habbabeh says: compelling markets attract activity; weak ones wither. That dynamic is promising but risky. Other user-generated projects — like Nine Lives and Warm Protocol — struggled to convert concept into liquidity, leaving many markets dormant. XO contends it can avoid that fate by aligning incentives and giving creators control over parameters and fees, but converting creators and traders into sustainable liquidity providers remains the industry’s hard problem. Why incumbents may not follow: Habbabeh doubts Polymarket or Kalshi will open up to user-generated markets. Doing so would require thousands of market makers ready to supply liquidity across diverse events and significant infrastructure changes — and would cut into highly profitable existing models. A booming category: Prediction markets have expanded well beyond niche forecasting. Improved crypto infrastructure, high-profile political and economic events, and growing retail and institutional interest helped industry volume roughly quadruple to over $60 billion in 2025 (from about $15–16 billion a year earlier). Polymarket alone drove a lot of that growth: monthly trading rose from $54 million at the start of 2024 to more than $2.6 billion by November, pushing cumulative volume past $9 billion in that year. New products: XO is not stopping at market creation. It plans to launch “XO Vaults,” a tool to democratize market making by letting users pool capital into automated liquidity strategies. Vault creators can set strategies and categories (sports, politics, etc.), earn fees from providing liquidity, and open investment slots for others who want exposure to market-making returns without active trading. XO is targeting yield in the 8–10% annual range, positioning vaults as a potential new DeFi primitive that pays passively from prediction-market activity. The company expects the product to debut within weeks. XO is also building a new take on parlays called “XO Stories.” Built on the Vaults foundation, it aims to link multiple outcomes in more flexible ways than traditional sportsbook parlays, with dynamic pricing and support for complex, multi-outcome structures — though detailed mechanics remain under wraps. Regulatory context: Prediction markets increasingly attract scrutiny, especially in the U.S. XO argues its on-chain, permissionless architecture — everything transparent and recorded on-chain — could offer legal and operational advantages compared with centralized rivals, though the regulatory landscape remains fluid. What’s next: For now, XO’s priority is growth and product rollout. The company’s thesis is straightforward: the internet favored user-generated content over centrally produced studios; prediction markets will do the same. Whether XO can turn creative market listings into durable liquidity and wider adoption will determine if the “YouTube” analogy holds. Read more AI-generated news on: undefined/news