Hello, world!
Flip Incoming is your source for prediction market trends and analysis. To inaugurate our launch, we are starting by discussing our rationale for creating a service that will over the course of years grow into a media behemoth. True to form, we’re putting a prediction out there.
Our Prediction: A Flip is Incoming
It’s not often in life that we can so confidently say that we can see the future clearly. This is one of those moments.
By 2030 (in ten years) prediction markets will be more important than current derivatives markets as financial instruments. Beyond that, they will be a primary source for news and realtime understanding of our world.
Let’s dig into why they are inevitable.
Reason 1: Prediction Markets Are Useful to Enterprise
In the long run, step function improvements always win out. When a capability adds significant efficiency over previous ways of operating, it will come to pass regardless of short term adversarial interests. We don’t mean fights over technological standards like VHS vs BetaMax. We mean fundamentally new technologies or approaches — Netflix vs. Blockbuster, Google vs. Yahoo, the Internet vs. essentially everything else.
Prediction markets offer the financial services industry hedging and portfolio construction abilities that cannot exist otherwise.
There will be a watershed moment where suddenly there are prominent examples of highly successful early-adopter firms using Prediction Markets which become the envy of their industry. The financial industry is cutthroat, and when this opportunity opens, the rush of new players taking advantage will be urgent.
The only things holding it back will be regulation.
Reason 2: Unstoppable Prediction Market Tech Launching Now
A successful set of prediction markets require platforms for trading that are tested at scale and deep liquidity. Building that capability set — both from a software perspective and an operational one — takes time and requires gradual steps toward enterprise level capability. That is simply impossible to do in an environment where the offering is illegal.
But now, significant tech investments are being made on the blockchain outside of strong legal jurisdictions. The main blockchain prediction market project - Augur - is releasing its highly anticipated v2 this spring. The blockchain community is already accustomed to operating in a quasi-legal state, and many entrepreneurs have decamped to Switzerland or Estonia for their companies already. The tech will be built and tested at scale — juiced by the programmatic trading skills already developed for Bitcoin or Ethereum. See the DeFi movement for examples of hardening code-based financial contracts under attack scenarios.
Over the next few years, the world will flip from a state where prediction markets are an interesting idea or a toy to a state where large scale prediction markets exist… just, outside our jurisdiction.
Reason 3: Deregulation Incoming
Let’s examine a few realities:
Insurance contracts on pandemics (particularly relevant as we write this), natural disasters, or health outcomes are not fundamentally different from other prediction markets. The precedent for legal enterprise prediction at scale is already here
Once the technology layer proves sufficient, the genie can’t be put back in the bottle. Financial firms can move operations to friendly jurisdictions. Countries with heavy handed restrictions will suddenly be faced with actual consequences for those choices.
Prediction markets allow people in power to profit. Market moves in prediction markets are driven by insider information — that’s a feature, not a bug. If you know something first, you stand to profit. When people in power realize they can profit legally from their position, we don’t believe they’ll fight too hard to take that power from themselves.
While it may be difficult to predict when prediction markets will finally enjoy solid legal standing in places like the U.S., it’s easy to predict that they will.
Flip Incoming will devote a portion of our time to tracking the regulatory status of prediction markets across various jurisdictions and the ongoing conversations about them.
What is Flip Incoming
A ‘flip’ is common slang for a market switching from projecting one outcome to another. It’s particularly meaningful as it usually is driven by a specific event or change in circumstances. Participants in prediction markets learn to love and fear the flip. So do we.
Who is Flip Incoming for?
Our audience is you — the prediction market trader or observer who sees the same future that we do. We are all early to this party: markets are limited in scope, limited in liquidity, and generally immature. As many of you have noticed, this also means there is profit opportunity for individual operators.
That’s who we’re here to help. We are the quality source of data that you as a trader can rely on to build your trades. We are your hub for prediction market activity.
But we are also your source for industry news, commentary, and analysis. While we’re heads down trading our views of the future, let’s not lose sight that we are early to what will be a major industry transformation.
As prediction markets grow in scope, scale, capabilities, and use cases, so will we. We’re in this for the long haul.
Who are we?
We are a team of software start-up operators with a mix of backgrounds in private equity, business strategy, software development, and software product management. We see the future for prediction markets and we see an opportunity to use our shared skills to bring this service to life.
What will we do?
The core of our posts will be data. Which markets are moving and how — which individual traders can use to manage their strategies. Our metrics will certainly evolve over time and we encourage our early subscribers to work with us on their desired roadmap.
We’ll also be publishing thought pieces or analysis on an irregular schedule. These will include developments in the legal landscape, interviews with industry participants, or breakdowns of new tech.