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XO Market is betting that the future of prediction markets won’t be dictated by centralized teams that decide what people can trade on, but by users themselves.
The startup, which just closed a $6 million funding round led by 20VC, Picus Capital, Coinbase Ventures, Venture Together and a group of angel investors including Australian cricket captain Pat Cummins, is positioning itself as the “YouTube of prediction markets,” according to co-founder Ali Habbabeh.
“Today’s major platforms like Kalshi and Polymarket act more like Netflix,” Habbabeh told CoinDesk in an interview. “They decide which markets exist. We have completely reversed this model. On XO, users create the markets themselves.”
The distinction is crucial. While incumbents rely on in-house teams to organize and list prediction markets, XO allows individuals or businesses to create their own markets, set parameters and fees, and allow others to trade in them. The result, according to Habbabeh, is a broader and often more creative set of opportunities.
“We believe the future of prediction markets is user-generated. The best markets are not decided by a platform, they emerge from the community.”
Mainnet Beta Launch
The model seems to be gaining ground. Since launching its mainnet beta in mid-November, XO has generated over $150 million in trading volume, attracted over 30,000 users, and seen over 600 user-created markets. A previous pilot project began in April 2025 with a testnet deployment.
“The indicators look strong because the incentives are aligned,” Habbabeh said. “If you create an attractive market, people trade in it. If you don’t, it naturally dies.”
This dynamic of “natural selection” could be a double-edged sword. Even Habbabeh points out that competing user-generated platforms, like Nine Lives and Warm Protocol, have struggled to convert the concept into meaningful liquidity, resulting in inactive markets or minimal trading activity.
Polymarket or Kalshi are unlikely to offer user-generated markets, according to Habbabeh, because they would need to find market makers willing to provide liquidity for thousands of different events and would have to modify their infrastructure. Their current models are also extremely profitable, he added.
Prediction markets are gaining traction beyond their niche origins, attracting growing interest from retail traders and institutional players as a new locus of price uncertainty. Advances in digital asset infrastructure have lowered barriers to entry, while a series of high-profile political and economic events have highlighted the limitations of traditional forecasting tools.
The result is a growing number of platforms on which contracts linked to actual outcomes are traded with increasing liquidity, positioning prediction markets as an emerging and lightly regulated complement to conventional financial markets.
The industry’s total volume has quadrupled to more than $60 billion in 2025, up from around $15-16 billion the year before, with platforms like Polymarket driving much of this growth.
On Polymarket in particular, monthly trading exploded from just $54 million in early 2024 to more than $2.6 billion the following November, helping to push cumulative volume past $9 billion in a single year.
XO Chests
Alongside its main platform, XO is preparing a new product aimed at “democratizing” another key element of the ecosystem: market making.
Upcoming “XO Vaults” will allow users to pool their capital into strategies that provide liquidity in prediction markets, traditionally dominated by professional firms.
“On platforms like Kalshi or Polymarket, liquidity is controlled by a handful of large market makers,” Habbabeh said. “With XO Vaults, anyone can become a market maker.”
Users will be able to create vaults linked to specific strategies or categories, such as sports or politics, and earn fees by providing liquidity. Others can invest in these vaults, gaining effective exposure to market-making returns without actively trading.
“It’s similar to copy trading, but for the provision of liquidity,” Habbabeh said. “We aim for annual returns of around 8-10% based on what market makers typically earn.”
The product, expected to launch in a few weeks, could introduce a new yield primitive in decentralized finance, blending prediction markets and passive income strategies.
“Not everyone wants to bet on the results,” Habbabeh said. “Some people just want to make money from activity around these markets.”
Course
The XO team is also developing a feature that they believe could reshape how parlays work in prediction markets.
“This is not a typical copy and paste of sports betting into prediction markets,” Habbabeh said.
The feature, tentatively named “XO Stories,” aims to give users more creative control by linking multiple results beyond traditional discussions. Although details remain limited, the team says prices will be dynamic, providing new insight into prediction markets.
Built on top of XO Vaults, the system is intended to support complex, multi-outcome structures without simply aggregating existing transactions. Habbabeh shared few details, but suggested it could reshape the way users think about and use parlays.
The best content comes from users
Despite increased regulatory scrutiny around prediction markets, particularly in the United States, Habbabeh said he believes XO’s on-chain, permissionless design could provide benefits.
“Everything about XO is transparent and on-chain,” he said. “This puts us in a different category compared to more centralized platforms.”
For now, the focus remains on product growth and expansion.
As XO grows its ecosystem, Habbabeh is confident that the user-generated model will continue to set it apart.
“The Internet has shown us that the best content comes not from centralized studios, but from users,” he said. “We believe prediction markets will follow the same path.”
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