[
  {
    "speaker": "Speaker 1",
    "text": "All right. I hope you enjoyed the summit so far. I've learned a lot from all the founders that came. And then once again, I want to thank everyone here for coming. We had a lot of people coming"
  },
  {
    "speaker": "Speaker 1",
    "text": "from all the neighboring schools. And it was really cool to see, especially at some of the lunches and social settings, people talking about what they're working on, meeting potential"
  },
  {
    "speaker": "Speaker 1",
    "text": "co-founders. It was really fun. I also want >> [applause] >> Real quick, I want to thank all the people behind the scenes that helped make this summit possible. So, first, the AV team, they were"
  },
  {
    "speaker": "Speaker 1",
    "text": "instrumental."
  },
  {
    "speaker": "Speaker 1",
    "text": ">> [applause] >> And then also all of the volunteers, which I don't know where everyone is, but my fellow co-chairs, all of the panel leads, all the students who ran this, got all the speakers coming, and"
  },
  {
    "speaker": "Speaker 1",
    "text": "put on this event. So, round of applause for everyone who made this possible."
  },
  {
    "speaker": "Speaker 1",
    "text": "[applause] Cool. You didn't come here to hear me speak, so I'm going to hand it off."
  },
  {
    "speaker": "Speaker 1",
    "text": "Please welcome Brandon Farwell, general partner at XFund, who made this last keynote possible."
  },
  {
    "speaker": "Speaker 2",
    "text": ">> [applause] >> Just one last please. Maybe not final last round of applause, but Randall Wall, everybody. This would not happen without his assistance."
  },
  {
    "speaker": "Speaker 2",
    "text": ">> [applause] >> Without Randall Wall."
  },
  {
    "speaker": "Speaker 2",
    "text": "Thank you so much. Well done. Um, so like Randall said, I'm Brandon Farwell, uh general partner at XFund, a really stage-venture firm that was originally conceived in partnership with the"
  },
  {
    "speaker": "Speaker 2",
    "text": "university. But today, I have the enormous pleasure this afternoon of introducing, honestly, one of Harvard's most treasured gems, Professor Jonathan Zittrain."
  },
  {
    "speaker": "Speaker 2",
    "text": "And today, [cheering and applause] it's better, JZ."
  },
  {
    "speaker": "Speaker 2",
    "text": "The original JZ. Is that okay to say?"
  },
  {
    "speaker": "Speaker 2",
    "text": "The OG. He got the domain name. Perfect."
  },
  {
    "speaker": "Speaker 2",
    "text": "Even better. There it is. Okay, we had it on the mic for a second. The original JZ. Not only is Jonathan triple tenured between Harvard Law School, SEAS, and the Kennedy School, but as co-founder"
  },
  {
    "speaker": "Speaker 2",
    "text": "and director of Harvard's Berkman Klein Center for the Internet and Society, He helped invent many foundational pillars of the Internet."
  },
  {
    "speaker": "Speaker 2",
    "text": "The center contributed to the creation of ICANN, which assigns all Internet domain names and numbers."
  },
  {
    "speaker": "Speaker 2",
    "text": "RSS, I think we all know what RSS is, the protocol that controls most online content."
  },
  {
    "speaker": "Speaker 2",
    "text": "And Creative Commons, the global standard for IP rights on the Internet."
  },
  {
    "speaker": "Speaker 2",
    "text": "He's been pretty busy."
  },
  {
    "speaker": "Speaker 2",
    "text": "The next one's work with Jonathan has stretched well over a decade."
  },
  {
    "speaker": "Speaker 2",
    "text": "As the Harvard Law Librarian, yes, the accolades continue, Jonathan oversaw the Case Law Access Project, which has expanded free public access to US case law through a groundbreaking"
  },
  {
    "speaker": "Speaker 2",
    "text": "partnership with one of XFund's very first portfolio companies. Thank you, Jonathan."
  },
  {
    "speaker": "Speaker 2",
    "text": "We are extremely proud and to count Jonathan as one of our most active and treasured faculty advisors, and of course, buddies."
  },
  {
    "speaker": "Speaker 2",
    "text": "Now, directly relevant to today's events, Jonathan is one of the most foremost technology ethicists."
  },
  {
    "speaker": "Speaker 2",
    "text": "He has spent his career exploring the ethics and governance of the Internet, AI, and crypto."
  },
  {
    "speaker": "Speaker 2",
    "text": "All things that make him uniquely qualified to elucidate an entrepreneur like Shane Coppola."
  },
  {
    "speaker": "Speaker 2",
    "text": "Our goal today is to challenge students' minds about not only Polymarket, but the many forces it has unleashed that are animating technology and society now, and of course, in the decades to come."
  },
  {
    "speaker": "Speaker 2",
    "text": "Team, it's my pleasure to introduce JZ and Shane to the main stage. GENTLEMEN, JOIN US."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> [applause] >> THANK YOU, BRANDON, FOR THAT INTRODUCTION. THANK YOU all for being here on a beautiful day. Thank you, Shane, for hauling up from New York for this."
  },
  {
    "speaker": "Speaker 3",
    "text": "Great to see you. Thank you for having me. Thank you everyone for coming."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> [applause] >> And thanks to HBS and the entrepreneurship folks and the XFund, which is really at the cool vertex between the academic and the real, because they don't always overlap."
  },
  {
    "speaker": "Speaker 3",
    "text": "And that's a great way actually to get started talking to you about what appears to have been your passion for quite a while. And Shayne, one great way to start is do you remember when you"
  },
  {
    "speaker": "Speaker 3",
    "text": "placed your first bet?"
  },
  {
    "speaker": "Speaker 4",
    "text": "Depends on how you define bet. I remember opening a TradeKing account."
  },
  {
    "speaker": "Speaker 4",
    "text": "For those who know real OG's, uh and it was like the dingy brokerage site that had $4.99 commissions."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, for all the smallest accounts, it was like, okay, I'm going to use this one because it's the cheapest. So, you can if you round trip your trades, you'll pay the least."
  },
  {
    "speaker": "Speaker 4",
    "text": "And somehow tried to learn trading earnings day options."
  },
  {
    "speaker": "Speaker 5",
    "text": "And the first week I just got lucky and I I I made some I made money. And this was 2013, I think. This is like the corner one-arm bandit at the casino that draws you in."
  },
  {
    "speaker": "Speaker 5",
    "text": ">> Exactly. It's the beginner's luck at the casino."
  },
  {
    "speaker": "Speaker 4",
    "text": "Basically, the worst type of luck you can have. If you stack rank all the types of luck you can have, because you're like, I'm a genius. Yeah, and luckily enough, the next week kind of"
  },
  {
    "speaker": "Speaker 4",
    "text": "reversion to the mean, but then completely lost interest in the trading and I started I saw the an order book for the first time. And I was like, oh well, this is interesting. This seems"
  },
  {
    "speaker": "Speaker 4",
    "text": "like a lot of I was also looking at these stocks that were not that liquid."
  },
  {
    "speaker": "Speaker 4",
    "text": "I was like, okay, so what is this? And I was learning about bids and asks. And from that point on, I got a lot more into the marketplaces. I think I've always had a a fascination with"
  },
  {
    "speaker": "Speaker 4",
    "text": "marketplace startups, the financial exchanges, a lot more than you did just buying something and selling it for more. It does seem like that fascination goes way back. I think you recently"
  },
  {
    "speaker": "Speaker 3",
    "text": "shared an email you had sent, and I you may even have a copy of it right here."
  },
  {
    "speaker": "Speaker 3",
    "text": "This is in 2013. So, how old were you then?"
  },
  {
    "speaker": "Speaker 3",
    "text": "15. And then that record shows he said 15. My name is Shane Coughlan, I'm a high school sophomore here in Manhattan creating an ECN basis stock exchange, electronic currency network. My first line of"
  },
  {
    "speaker": "Speaker 3",
    "text": "passage make sure the idea is totally legal and comply with SEC regulations."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> man."
  },
  {
    "speaker": "Speaker 3",
    "text": "And would love to come to your Manhattan office, discuss the legal aspects, and this might be naive, but if we can make this work, this could be really cool."
  },
  {
    "speaker": "Speaker 3",
    "text": "Did they write back?"
  },
  {
    "speaker": "Speaker 3",
    "text": "No. And then BlockFi was born."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> [laughter] >> I see. This is your Joker moment right here."
  },
  {
    "speaker": "Speaker 3",
    "text": "You tried doing it through the front door."
  },
  {
    "speaker": "Speaker 4",
    "text": "And then what happened?"
  },
  {
    "speaker": "Speaker 4",
    "text": "I always thought that blockchains were cool, not necessarily because I've never actually been into meme coins or things."
  },
  {
    "speaker": "Speaker 3",
    "text": "But you were thinking about blockchains in 2013."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Yeah, ECN is electronic communication network. It's like an alternative for building uh like don't I mean it's not a thought."
  },
  {
    "speaker": "Speaker 4",
    "text": "It's just like a stock exchange alternative. And it's I was taught blockchains were cool cuz I figured the next iteration of stock exchange could be built by a kid in his bedroom. That's what I said when"
  },
  {
    "speaker": "Speaker 4",
    "text": "I was a teenager."
  },
  {
    "speaker": "Speaker 4",
    "text": "And but it is a last for innovation. It allows for you to go and build a marketplace or a financial exchange or an app that would be so difficult to build on traditional financial infrastructure."
  },
  {
    "speaker": "Speaker 4",
    "text": "And I watched as DeFi started and as Uniswap happened, and I was like, \"Wow, okay, there it is.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "And somehow, some way, 8 years later from when I was kind of thinking like that, I think the volume market at least today, knock on wood, but it's going to become that thing that is okay, this wouldn't exist if it"
  },
  {
    "speaker": "Speaker 4",
    "text": "weren't for blockchains because you need to let young people with no money with their back against the walls experiment, invent, and be curious, and build things. And the reason you need"
  },
  {
    "speaker": "Speaker 4",
    "text": "blockchain for that is because there's no way to go and experiment with things that haven't been built when the regulations are so rigid."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> In other words, it's a way to do it without having your payment system seize up because somebody placed a phone call to MasterCard and said, \"Do you see what these guys are doing?\" Yeah, it's that,"
  },
  {
    "speaker": "Speaker 4",
    "text": "but it's also that the whole the value chain in traditional finance is like this, the piper every single step of the way. And you have to have the sales calls, and then they go and charge on"
  },
  {
    "speaker": "Speaker 4",
    "text": "this, and And I started Polymarket big said the more informal sense, and there was just no money. So, I I really believed in this idea. I'd looked at the people who'd built prediction markets"
  },
  {
    "speaker": "Speaker 4",
    "text": "before me. Which are like academics doing it for fun? Both the academics and the products. You know, PredictIt, Intrade was before my time, but PredictIt, Augur, you got one called Veil. Like I I'd seen"
  },
  {
    "speaker": "Speaker 4",
    "text": "and tried all these things, and I was like I knew what was left to be desired."
  },
  {
    "speaker": "Speaker 4",
    "text": "And a lot of these people gave up prematurely. And what was it that was missing? It was the crypto piece? No, it was if I were to sum it up in one way, it was care for the consumer. It was"
  },
  {
    "speaker": "Speaker 4",
    "text": "user experience. It was building the product in a way that it actually could work."
  },
  {
    "speaker": "Speaker 4",
    "text": "Cuz when you would go and use these products, you wouldn't I wouldn't be able to get it to work myself, and I'd run into these challenges or like these UX difficulties, and I'd be like,"
  },
  {
    "speaker": "Speaker 4",
    "text": "\"Okay, I'm going to go and spend hours figuring out how to do what everyone else does.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah."
  },
  {
    "speaker": "Speaker 4",
    "text": "And a lot of the time sometimes if you really have great product market fit with your idea and your product, you can get away with having a really shitty product. You can get away with having really bad"
  },
  {
    "speaker": "Speaker 4",
    "text": "onboarding."
  },
  {
    "speaker": "Speaker 4",
    "text": "But Good example of that?"
  },
  {
    "speaker": "Speaker 4",
    "text": "A lot of things. Polymarket in the early days, honestly. all right."
  },
  {
    "speaker": "Speaker 4",
    "text": "But the thing that you can't get away with is when you need to bootstrap any marketplace. So, when you need the supply and the demand to be there simultaneously, you need to have the"
  },
  {
    "speaker": "Speaker 4",
    "text": "dance that is buy-side and sell-side."
  },
  {
    "speaker": "Speaker 3",
    "text": "And did you have to pitch people on this other than the people you were hoping would place bets?"
  },
  {
    "speaker": "Speaker 4",
    "text": "Just to circle back on the last point."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, when you have to go for the platform to even work, when you need to go and have two sides to the market, if you go and have a really bad user experience or if something is not usable, like if the"
  },
  {
    "speaker": "Speaker 4",
    "text": "user experience of provided liquidity is so difficult, you're not only going and having like lower conversion rate, which may be the case for a lot of these products."
  },
  {
    "speaker": "Speaker 4",
    "text": "You're like you're completely eliminating the chance of success of the marketplace because if you can't go and get one side of the marketplace, the other side you can't serve. So, my point of view was like,"
  },
  {
    "speaker": "Speaker 4",
    "text": "okay, so you need to validate demand, you need to validate supply. Supply being provided liquidity, which was really difficult. Everyone was like, you know one's going to be able to provide"
  },
  {
    "speaker": "Speaker 4",
    "text": "liquidity for these markets cuz there's no way you can hedge and no one knows what the prices are. And demand was like, no one actually wants to go and trade on these things. It's like people"
  },
  {
    "speaker": "Speaker 4",
    "text": "think they do, but they don't actually."
  },
  {
    "speaker": "Speaker 4",
    "text": "And I used these products and I felt like I wanted to trade on these things and I wanted to go and had all these ideas."
  },
  {
    "speaker": "Speaker 4",
    "text": "And I used them and I wasn't able to."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, my thing was if someone built this right, if someone built this in a customer-first way, would there even be people using it? So, to your second question, in the early days, the first thing that I wanted to figure"
  },
  {
    "speaker": "Speaker 4",
    "text": "out, there were two things, 1A and 1B."
  },
  {
    "speaker": "Speaker 4",
    "text": "1A was, will people trade these markets if they exist? Will people show up? Will they onboard? And will they say, I'm going to buy yes and buy no on something like when the COVID vaccine will be out,"
  },
  {
    "speaker": "Speaker 4",
    "text": "right? And will that happen? And the second thing was, does the pricing work?"
  },
  {
    "speaker": "Speaker 4",
    "text": "If you go and you see the probability on Polymarket, it says the price is 66 cents. Is that reasonable? Do people look at it? Do people actually care about it?"
  },
  {
    "speaker": "Speaker 4",
    "text": "And in order to do that, I knew that I wouldn't be able to go, especially with how little money we had, to go and really scale liquidity. Because liquidity is hard, and the people who"
  },
  {
    "speaker": "Speaker 4",
    "text": "know how to provide liquidity generally have a lot of money. It's not worth their time to be the first on-boarders to something like this."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> And liquidity here just means either a lot of bets or some big bets, a lot of money at stake."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Liquidity means supply side, which is that when someone comes in and they want to make a bet, they want to buy yes shares, buy no shares, that there's that there's inventory available for them to"
  },
  {
    "speaker": "Speaker 4",
    "text": "buy. Ideally at a reasonable price. If you think about like a stock market any given time, there's an order book and there's bids and asks, and you can sell at the bids, you can sell at the asks,"
  },
  {
    "speaker": "Speaker 3",
    "text": "and there's other market There's other market structures, so you can have RFQ and block trades, but >> And ideally not too big a gap between what's being asked and what's being offered. Ideally. But, while on a lot of"
  },
  {
    "speaker": "Speaker 4",
    "text": "traditional markets you want these extremely tight spreads, my point of view was there's a price for everything, and maybe these markets will exist on an order book, and the it's going to be really hard to"
  },
  {
    "speaker": "Speaker 4",
    "text": "accommodate risk. The larger the spread is, the more risk that the market makers can take, because when people are trading, they pocket more of the spread. So, anyway, digressing, in the early days of Polymarket, we used"
  },
  {
    "speaker": "Speaker 4",
    "text": "this thing called an AMM, an automated market maker. And the idea was if you could go and put money in an AMM, it was like this dumb bot that would provide liquidity to either side, but really"
  },
  {
    "speaker": "Speaker 4",
    "text": "small amounts. It's like a seesaw. So, if you want to buy yes, okay, the price changes the more you buy. If you want to buy no, as well."
  },
  {
    "speaker": "Speaker 4",
    "text": "And I went to this There was this company that was called Gnosis, and they were trying to do prediction markets for years, and they were like, \"Okay, we'll give you 50 grand for you to bootstrap"
  },
  {
    "speaker": "Speaker 4",
    "text": "these markets.\" Because someone had said to me, \"You got to launch your market and just raise the 50 grand.\" I was like, \"Dude, if I could raise the 50 grand, I would have raised the 50 grand"
  },
  {
    "speaker": "Speaker 4",
    "text": "by now. I needed it at that time.\" This was when? This was April and May of 2020. Okay. And >> This is time for anybody."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> So, it was many years after this, yeah, and still hadn't made much progress. So, goes to show how long this stuff takes."
  },
  {
    "speaker": "Speaker 4",
    "text": "And anyway, they bargained, they tried to shyster me, and they were like stringing us along while they were building their own version and trying to put all the liquidity into theirs. I"
  },
  {
    "speaker": "Speaker 4",
    "text": "like was watching it happen. I was like, \"Damn, I'm getting screwed.\" But anyway, there was like $37,000 to start put into like between 10 and 20 markets."
  },
  {
    "speaker": "Speaker 4",
    "text": "And in the first few days I should post on Twitter, Product Hunt."
  },
  {
    "speaker": "Speaker 4",
    "text": "And the first few days it was like Okay, this works. There are people who want to trade these markets. There's people who come in and they're just coming out of the woodwork and maybe"
  },
  {
    "speaker": "Speaker 4",
    "text": "social media. It's a really small amount of people, but there was clear product market fit. It clearly resonated to some sort of instinct in human nature of like, \"I'm going to be right. I'm right,"
  },
  {
    "speaker": "Speaker 4",
    "text": "you're wrong. I'm smart, so I'm going to go and trade this.\""
  },
  {
    "speaker": "Speaker 3",
    "text": ">> Chewbacca and R2-D2 once said, \"This is important. Someone is wrong on the internet, and that is a powerful force.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "I don't know that quote, but that's a good one. So, really early on it was like people were trading this and it wasn't just like a stock. It was like someone had an opinion. They were like,"
  },
  {
    "speaker": "Speaker 4",
    "text": "\"Oh, I know this is right. The market is stupid.\" Or like something like that."
  },
  {
    "speaker": "Speaker 4",
    "text": "And it activated people enough, it resonated enough for them to go and jump through the hoops to go and trade."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> And is this running on the other company's infrastructure at this point?"
  },
  {
    "speaker": "Speaker 4",
    "text": ">> No, this was on Ethereum, the Ethereum blockchain. It was smart contracts."
  },
  {
    "speaker": "Speaker 3",
    "text": "Which has a notoriously good UX."
  },
  {
    "speaker": "Speaker 4",
    "text": "Exactly. This was still the early days."
  },
  {
    "speaker": "Speaker 4",
    "text": "It wasn't as bad as it became, but ultimately we moved off it to something more scalable for that very reason. And So, the first thing was that people like to trade it. That was like cool. It was"
  },
  {
    "speaker": "Speaker 4",
    "text": "like, \"Okay, we've got to do something.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah, man. Yeah. Because well, just like that tiniest inkling of product market fit. But it was enough for people to be using it and coming back the next day."
  },
  {
    "speaker": "Speaker 4",
    "text": "And that's the kernel. That's P0 when you start. And then the second thing was people were sharing the odds. They were looking at the odds. They looked at it, \"Oh, 88%.\" This idea of P of yes and no,"
  },
  {
    "speaker": "Speaker 4",
    "text": "you have a question at the top, you have a graph, and the graph shows how the percentage changed over time. For those who don't know, we have an example of that. Maybe worth putting that up on the"
  },
  {
    "speaker": "Speaker 4",
    "text": "screen just for Yeah, and for those who don't know, the percentage, so it's like all the time people are like, okay, 88%, where does that come from?"
  },
  {
    "speaker": "Speaker 4",
    "text": "It's not 88% of people, it's not 88% of dollars on one side. What it is, a prediction market, there's a yes shares and no shares."
  },
  {
    "speaker": "Speaker 4",
    "text": "Each full set, which is one yes and one no, is backed by dollar."
  },
  {
    "speaker": "Speaker 4",
    "text": "The yes shares trade like a stock. So, you can say, I'll buy from you for this price, and you'll say, I'll sell to you at 88 cents a share. I'll buy at 86 cents a share, and then people can come"
  },
  {
    "speaker": "Speaker 4",
    "text": "in and trade."
  },
  {
    "speaker": "Speaker 4",
    "text": "And so, it's worth a dollar, the yes shares, if the event happens. So, just whatever the market price of the yes share is, the net present value of something worth a dollar if it happens is the"
  },
  {
    "speaker": "Speaker 3",
    "text": "likelihood, void time value of money and all this all these complexities. So, when you talk about percentages in prediction markets, you're tracking what the price of yes is. Here, the price of"
  },
  {
    "speaker": "Speaker 3",
    "text": "Michigan is 22 cents. Yeah, this is There's probably better examples than that, yeah."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> got a buck. Yeah, and it's not 22% dollars or anything like that. It's at that moment, if you click on Michigan and you say, what was the price that I can buy it for, someone's willing to"
  },
  {
    "speaker": "Speaker 4",
    "text": "sell it to you for 22 cents. So, anyway, in those early days, there were a few pie markets that we put up that were [snorts] like we put it up when there was some trend on Twitter, and people were like, oh,"
  },
  {
    "speaker": "Speaker 4",
    "text": "this is so cool. I'm watching the odds in real time. That's when I was like, okay, we got something. We got some action. Luckily, that happened because things got really [ __ ] hard shortly"
  },
  {
    "speaker": "Speaker 3",
    "text": "after."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> You know, making reference to the long arm of the laws. First of all, it's scaling, solo founder."
  },
  {
    "speaker": "Speaker 4",
    "text": "Uh, I wouldn't recommend that to anyone here."
  },
  {
    "speaker": "Speaker 4",
    "text": "Or if you do it, just there you go, buy your time. Like you got to figure that thing out real quick."
  },
  {
    "speaker": "Speaker 4",
    "text": "Have you figured that out since?"
  },
  {
    "speaker": "Speaker 5",
    "text": "Work in progress. Quickly someone in this room."
  },
  {
    "speaker": "Speaker 5",
    "text": "A little too late for the Yeah, a little too late for the co-founder role, but we are hiring."
  },
  {
    "speaker": "Speaker 4",
    "text": "If you're really cracked. Uh year-round after. Um Luckily because I had that validation, okay, this idea makes sense. All this stuff that I've read about academic literature, like about how cool promise of prediction"
  },
  {
    "speaker": "Speaker 4",
    "text": "markets, all the downstream societal impacts."
  },
  {
    "speaker": "Speaker 4",
    "text": "Okay, this can actually be real. It's just going to be really difficult to build."
  },
  {
    "speaker": "Speaker 4",
    "text": "And what what kicked off was like we launched and we iterated and we kept growing and traction was growing. And then in 2021, we had we were getting a lot of regulatory against all this stuff. We"
  },
  {
    "speaker": "Speaker 3",
    "text": "had our first kind of bend angle. It's a term of art meaning You know, we're talking about movies and it's Definitely not. Okay."
  },
  {
    "speaker": "Speaker 3",
    "text": "Regulatory matrix."
  },
  {
    "speaker": "Speaker 4",
    "text": "Regulatory matrix. Yeah. Big dose of the red pill. Yeah. And the way that I was able to build it to experiment, like hey, you have to go and do this and this this is new technology. You can't do"
  },
  {
    "speaker": "Speaker 4",
    "text": "this. And then you're building all this stuff like overseas? Where was the No, it's never been overseas. It's just all US on a blockchain and it had Yeah."
  },
  {
    "speaker": "Speaker 4",
    "text": "Part of the order was moved overseas, like certain aspects like market creation market steam. Uh And anyway, so, you know, what I'd say is thank God for those first few months where there was like this really this"
  },
  {
    "speaker": "Speaker 4",
    "text": "feeling of validation, albeit on a realistic scale, of the idea."
  },
  {
    "speaker": "Speaker 4",
    "text": "Because it took that to to drive through through the glass and break through the walls to go and see it through to what it but it's become and hopefully what it can become."
  },
  {
    "speaker": "Speaker 3",
    "text": "And what it is right now is behemoth, but by the way we're talking about betting odds."
  },
  {
    "speaker": "Speaker 3",
    "text": "Are you at 20 billion dollars right now?"
  },
  {
    "speaker": "Speaker 3",
    "text": "It's not quite."
  },
  {
    "speaker": "Speaker 3",
    "text": "Not quite."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> Don't believe everything on the internet."
  },
  {
    "speaker": "Speaker 5",
    "text": ">> [laughter] >> 19 billion dollars? Whatever it might be. It's all a lie. Adding there again."
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah. That's a lot. For all the aspiring entrepreneurs, don't get too caught up in valuations and venture capital. It is It's very seductive. It's totally missing missing missing the forest for the trees. And"
  },
  {
    "speaker": "Speaker 3",
    "text": "the way you're describing it so far is a very simple idea executed with really good UX and with a certain kind of fearlessness of Fandango's, which might be why Microsoft didn't do"
  },
  {
    "speaker": "Speaker 3",
    "text": "this or something. It took somebody with less to lose."
  },
  {
    "speaker": "Speaker 3",
    "text": "Such as that right? Okay. So, let's start talking about bets like these."
  },
  {
    "speaker": "Speaker 3",
    "text": "This is I think the marquee bet right now on the site. If you visit the site, it's the first thing somebody might see."
  },
  {
    "speaker": "Speaker 3",
    "text": "And I, not being particularly a sports person, still could not help but think of something [snorts] not from 2020 but 1920, which was Here is the Boston paper covering it. The 1919 World Series in"
  },
  {
    "speaker": "Speaker 3",
    "text": "which a number of White Sox players confessed to have thrown the series in order to win a bet. And I I'm just How many years ago is this? This was 106 years ago. What do you see as the"
  },
  {
    "speaker": "Speaker 3",
    "text": "parallels?"
  },
  {
    "speaker": "Speaker 3",
    "text": "Yeah, I mean it might be a bit of a reach, but I'm wondering if there's somebody playing for Michigan whose mom needs a bunch of dental work and there's no dental plan And this is the NCAA."
  },
  {
    "speaker": "Speaker 3",
    "text": "All they need to do is place a bet that they're going to lose."
  },
  {
    "speaker": "Speaker 3",
    "text": "And at the key moment before the buzzer sounds, miss that shot."
  },
  {
    "speaker": "Speaker 5",
    "text": "Look, I I get the point. That's a ludicrous example."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, we're back >> his dental work is totally covered by insurance."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, we're going back 106 years."
  },
  {
    "speaker": "Speaker 4",
    "text": "Look, there's been markets on every March Madness tournament from then till now. The introduction of a financial market that lets people trade peer-to-peer and lets there be actual"
  },
  {
    "speaker": "Speaker 4",
    "text": "accurate price formation does not go and all of a sudden reintroduce something that was left behind 106 106 years ago."
  },
  {
    "speaker": "Speaker 4",
    "text": "The innovation when it comes to sports, which albeit is like very different than from my point of view what the innovation is for the markets that didn't exist before, is that these you"
  },
  {
    "speaker": "Speaker 4",
    "text": "can get financial exposure to sports."
  },
  {
    "speaker": "Speaker 4",
    "text": "The idea that all of a sudden insider trading and swinging games is like a reintroduced risk because of Polymarket is outlandish and baseless."
  },
  {
    "speaker": "Speaker 3",
    "text": "Yeah. I can't tell if what you're saying is there's not a big delta in added risk, that this is as eternal as anything. The very first bet might have been accompanied by the very first"
  },
  {
    "speaker": "Speaker 4",
    "text": "inside >> there's definitely room to improve on the polling integrity of future sports. But, what you're saying these games that are so multifaceted, like you're saying someone in the key"
  },
  {
    "speaker": "Speaker 4",
    "text": "it's going to be a close game and then at the end the guy is going to go and miss a shot. Like, I think something that people really miss the mark on with Polymarket is if they like to say, \"Oh, someone will"
  },
  {
    "speaker": "Speaker 4",
    "text": "swing this market.\" And you look at the market and it's $200,000 on the line."
  },
  {
    "speaker": "Speaker 4",
    "text": "And what people fail to realize is that like the oil markets or public equities, macro, the most liquid derivatives, you can get enormous leverage and there's [clears throat] price impact on those Yeah. based on"
  },
  {
    "speaker": "Speaker 4",
    "text": "these events as well. And it's the dollars at stake here are immaterial versus that. Now, So, wait. Yeah. Let me finish. So, I'll share. It's not to say that there aren't examples where that's"
  },
  {
    "speaker": "Speaker 4",
    "text": "happening. And that's like a That's like more of a when you get into a lot of these the a lot of these markets that are more long tail that are very informative, but they serve the purpose"
  },
  {
    "speaker": "Speaker 4",
    "text": "to go and be like a compass on the likelihood of something that's very important that has a lot of maybe lifestyle impacts for people who, you know, are who it's relevant for. But when it comes to sports,"
  },
  {
    "speaker": "Speaker 4",
    "text": "like the way the current sports markets work is you can get financial exposure to all these things."
  },
  {
    "speaker": "Speaker 4",
    "text": "But you're using an app and the app you're using knows your name, knows your location, knows all your past bets."
  },
  {
    "speaker": "Speaker 3",
    "text": "It knows how much money you've made, how much money you've lost."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> So, there's a possibility if you are in a position to be one of these players, they might find you and you get in big trouble. No, not that. It's It's that the way that it works, obviously that's"
  },
  {
    "speaker": "Speaker 4",
    "text": "but that's not the deal. It's that these things are basically a rip off of the singers. It's like a casino but in some sports markets and for a lot of people that just want to have a good"
  },
  {
    "speaker": "Speaker 4",
    "text": "time and enjoy the game, that's totally fine. That's a great service. But the idea that the only way to get financial exposure to an event in America is through this makeshift state-by-state duopoly that no one can"
  },
  {
    "speaker": "Speaker 4",
    "text": "go and come in and chop the comments because the barrier to entry has gotten so high."
  },
  {
    "speaker": "Speaker 4",
    "text": "Which you're talking about the state of betting before Polly Market. Yeah, before before federally regulated sports betting contracts. And this idea that you download the app and you take"
  },
  {
    "speaker": "Speaker 4",
    "text": "whatever price they give you and they can ban you if you make money and they can change the amount that you can bet based on your betting history is Yeah, that's like >> kind of half betting, this is the"
  },
  {
    "speaker": "Speaker 4",
    "text": "cleaner, more straightforward way to do it. That's the opinion that I hold, but at a minimum, one should not be legal."
  },
  {
    "speaker": "Speaker 4",
    "text": "The more userous one should not be legal while the while the other can't. Got it."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Because just so everyone understands, the more that you break down a marketplace, the more efficient it can be. So, if you bundle, oh, you have an app and product development, and you"
  },
  {
    "speaker": "Speaker 4",
    "text": "have marketing, and you have all these different regulatory, state-by-state lobbying, and you have odds-making. So, there the people offering price, the more and more things you bundle,"
  },
  {
    "speaker": "Speaker 4",
    "text": "the worse the price is going to get for the consumer. Whereas, in financial markets, where you have exchange, and then you have the separate compliance providers, then you have the trading"
  },
  {
    "speaker": "Speaker 4",
    "text": "firms, and you have the, you know, ratio, whatever, and then you have people who are market makers who just specialize on giving the best price. And they only make money if they provide the"
  },
  {
    "speaker": "Speaker 4",
    "text": "most competitive price to consumers, to people who are marketplace participants."
  },
  {
    "speaker": "Speaker 3",
    "text": "So, >> you saying that's where you come in, and that's what Polymarket is? Yes. And that's keep it simple, that's basically it, and maybe people will build other stuff on top of it, powered by Polymarket, but"
  },
  {
    "speaker": "Speaker 4",
    "text": "like >> Yeah, I think more so it's just there's no reason for these markets to exist in a very crude and, yeah, format that's very disadvantageous to the user, when there's another way to do it that's"
  },
  {
    "speaker": "Speaker 4",
    "text": "a lot more efficient, that at least I think is a better way for it to work."
  },
  {
    "speaker": "Speaker 4",
    "text": "And I'm not saying that everyone has to think it's a better way for it to work."
  },
  {
    "speaker": "Speaker 4",
    "text": "Some people may be used to the old way of doing it, they may enjoy that. But, at least in America, let the consumers decide, right? The idea of going and lobbying out a fairer alternative to"
  },
  {
    "speaker": "Speaker 4",
    "text": "something that some people may look think is think is something that they don't like, which is these sports markets."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> Let me just ask conceptually about is insider trading a feature or a bug, or when it is and when it isn't. The example I gave was getting ahead of things. It was somebody who throws the"
  },
  {
    "speaker": "Speaker 3",
    "text": "game in order to win the bet. But, suppose I'm not asking about the basketball player Michigan. I'm asking about the manager of the team whose job it is to clean the basketballs after the thing. He comes in and he sees"
  },
  {
    "speaker": "Speaker 3",
    "text": "somebody that just tripped on their way into the locker room and there's bones sticking through their shin. Sorry to be so graphic here. I don't know why I am, but Basically, you know a player is injured"
  },
  {
    "speaker": "Speaker 3",
    "text": "and you stop for a moment polishing the basketball and you're like, \"One moment, I'm going to grab my phone and just take care of something.\""
  },
  {
    "speaker": "Speaker 3",
    "text": "And I put it all on Michigan losing."
  },
  {
    "speaker": "Speaker 3",
    "text": "Conceptually speaking, is that okay?"
  },
  {
    "speaker": "Speaker 4",
    "text": "You're still taking a huge risk on one guy getting injured."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Oh, it was the star person."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Okay, I look the bottom line is 3 years ago the exact same thing existed. It's This isn't a new thing. It's not a I So, I The only reason I'm asking Or me so some one, but I'm I thought you had at sometime said this"
  },
  {
    "speaker": "Speaker 4",
    "text": "might be a feature."
  },
  {
    "speaker": "Speaker 4",
    "text": "Well, yeah. So, look."
  },
  {
    "speaker": "Speaker 4",
    "text": "Anyone who has participated in sports markets knows that the line gets a lot tighter right before the game. More liquidity comes, more people at larger size, they'll take larger size. That's"
  },
  {
    "speaker": "Speaker 4",
    "text": "because the injury reports are out before. So, the market is not stupid."
  },
  {
    "speaker": "Speaker 4",
    "text": "They understand They have decades centuries, but decades at least of game tape, no pun intended, of like how the markets move, where there's most risk, and at time for this most risk, let's"
  },
  {
    "speaker": "Speaker 4",
    "text": "say 45 minutes before the game, or there's a warm-up before football and it's like some guy can pull his hamstring."
  },
  {
    "speaker": "Speaker 4",
    "text": "There's lighter liquidity. People are willing to go and take give you inventory, supply you liquidity, but in a smaller size than right before tip-off or right before kickoff where there's"
  },
  {
    "speaker": "Speaker 4",
    "text": "certainty about who the starting lineup is. Leave it to the market and leave it to market participants to define and model their own risk and price it accordingly. And is You see this in"
  },
  {
    "speaker": "Speaker 4",
    "text": "sports markets, you see this in commodities, you see this in stocks for earnings, there are insights about oh, they had really strong revenue or this had this, there's rumors, etc."
  },
  {
    "speaker": "Speaker 4",
    "text": "That's what's above my pay grade. But, there are insights that go and anchor people to what the likely outcome could be."
  },
  {
    "speaker": "Speaker 4",
    "text": "And they find their edge in the market shortly before. And my hypo is an example of that kind of insight. Look at there's [snorts] an injury, that could totally happen. I think that when you"
  },
  {
    "speaker": "Speaker 4",
    "text": "are going and market making and pricing sports games, what are the risks? One of which is that someone knows about an injury that you don't know. It's one of the most prominent ones. When you go and"
  },
  {
    "speaker": "Speaker 4",
    "text": "provide liquidity and you price markets, that's not because it's riskless. If it were riskless, everyone would do it."
  },
  {
    "speaker": "Speaker 4",
    "text": "It's that you have to go and develop a strategy where you can go provide the service in which is competitive pricing and liquidity while also managing your risk, which in this case is that."
  },
  {
    "speaker": "Speaker 3",
    "text": "There's another kind of fascinating example from the Polymarket feed, which I think the feed called devilish. It was on a Coinbase earnings call, where the Coinbase CEO was on the call talking, and there had"
  },
  {
    "speaker": "Speaker 3",
    "text": "apparently been some bets about what he would talk about."
  },
  {
    "speaker": "Speaker 6",
    "text": "I was a little distracted cuz I was tracking the prediction market about what Coinbase will say on their next earnings call, and I just want to add here the words Bitcoin, Ethereum,"
  },
  {
    "speaker": "Speaker 6",
    "text": "blockchain, staking, and Web3 to make sure we get those [clears throat] in before the end of the call."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> [laughter] >> That's a good one."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> [laughter] >> And I guess is it just if I were betting my mom's dental work on Ethereum not happening on the call, then maybe I should have picked a different bet."
  },
  {
    "speaker": "Speaker 4",
    "text": "Look, I think that no one who's participating in these mention markets, especially something like that, is under the impression this is like a financial institutional liquidity market, right?"
  },
  {
    "speaker": "Speaker 4",
    "text": "And these are really thin markets. This is the first time something like that's happened. Just as with any like novelty, new innovation, new gimmick, whatever you want to call it. You kind of see"
  },
  {
    "speaker": "Speaker 4",
    "text": ">> weird stuff."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Yeah, yeah. There's growing pains and you adapt. So, yeah, but it it was funny."
  },
  {
    "speaker": "Speaker 4",
    "text": "I love I love I like you said it. I like when I find market, I looked at the match market. I was like, \"Okay.\" I like went in order and I was like, \"Damn.\""
  },
  {
    "speaker": "Speaker 3",
    "text": "Wow, you really went for it. Wow. Here's a more recent one. This is also from last week, I think."
  },
  {
    "speaker": "Speaker 3",
    "text": "And now we're out of the realm of sports. Yeah. What will Iran strike by March 31st? It's still running, so I Can I just ask, how many people have used Polymarket?"
  },
  {
    "speaker": "Speaker 3",
    "text": "That's a lot of Now, yeah, okay. How many people are using it right now? How many people are All right, fewer, but still quite a number of hands up. And these are different places. Burj Khalifa, tallest"
  },
  {
    "speaker": "Speaker 3",
    "text": "building in the world for a while, 5%."
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah."
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah. Look, this is the general velocity and this is like the disclaimer above where it's not monetized and whatnot."
  },
  {
    "speaker": "Speaker 4",
    "text": "First of is zero dollar volume. Got our field."
  },
  {
    "speaker": "Speaker 4",
    "text": "You go in the news, you go on Twitter, you go on Telegram."
  },
  {
    "speaker": "Speaker 4",
    "text": "All they're talking about is, \"Oh, is this going to happen? Is this going to happen?\" And geopolitics is the thing that's discussed. Just before this, I was one of the professors that they"
  },
  {
    "speaker": "Speaker 4",
    "text": "introduced me to was like, \"I was in Israel and I needed to leave because the Polymarket odds were going up for an escalation."
  },
  {
    "speaker": "Speaker 4",
    "text": "And I I've heard that now almost a dozen times in separate occasions."
  },
  {
    "speaker": "Speaker 4",
    "text": "And someone was like, \"Oh, we all use it.\" Israel said, \"Is it that popular?"
  },
  {
    "speaker": "Speaker 4",
    "text": "Are you kidding me? Do you not understand?\" And And it's seen as a feature."
  },
  {
    "speaker": "Speaker 4",
    "text": "Of course. Look, what's the alternative to knowing whether something like this will happen? Like, when you look at an oil market, all the straight-forward moves and all the geopolitical"
  },
  {
    "speaker": "Speaker 4",
    "text": "intricacies of different risks and different escalations are priced in. And the moment any of that happen, it moves the market."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> So, is it fair to say that the the more the higher the real-world stakes are of the event happening or not, which could include as I even stick with it in the military kinetic action,"
  },
  {
    "speaker": "Speaker 3",
    "text": "the more important you would say it is to have this?"
  },
  {
    "speaker": "Speaker 4",
    "text": "Look, I think that if if something is important, and you as an individual, you're trying to make decisions, you're trying to plan for the next week, you're trying to plan for your future, you're trying to plan"
  },
  {
    "speaker": "Speaker 4",
    "text": "for what you're doing with your family, and you're uh endlessly scrolling on Twitter, and you have the news up, and you're going channel to channel, and one day they say this, the next day they say that, then"
  },
  {
    "speaker": "Speaker 4",
    "text": "they have some an expert come on, he says one thing, and then they have the next expert who argues the other thing."
  },
  {
    "speaker": "Speaker 4",
    "text": "That is not the highest fidelity and the highest caliber of accurate information."
  },
  {
    "speaker": "Speaker 4",
    "text": "There is better information that exists, and that information's important cuz it helps people make better decisions."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> And that's this."
  },
  {
    "speaker": "Speaker 4",
    "text": "Definitely. It's proven that if you can go and get something that's probabilistic, I think the important thing to remember is that that's all you like time. These are really small dollar amounts."
  },
  {
    "speaker": "Speaker 4",
    "text": "The idea that any of this would swing any outcome is very small. But, it goes and provides a probability, let's say 20% or something, that or maybe it's 15, 14% for our field that went down a lot,"
  },
  {
    "speaker": "Speaker 4",
    "text": "someone could be going and saying, \"Oh, this is going to happen, it's going to happen. You need to go, you need to pack your bags.\" And they're relying on having to discern from all this gossip"
  },
  {
    "speaker": "Speaker 4",
    "text": "what's the signal, what's the noise."
  },
  {
    "speaker": "Speaker 4",
    "text": "It's very difficult. So, the idea that you can frame it the debate as opposed to it being a yelling match on TV, or a yelling match in the replies of something on X, the fact you can have it"
  },
  {
    "speaker": "Speaker 4",
    "text": "as a prediction market. This is people putting their money where their mouths are. It's the same thing that's happening on the social networks except instead of going and participating and"
  },
  {
    "speaker": "Speaker 4",
    "text": "the goal being hey, I want to get a lot of impressions, the goal is to be right."
  },
  {
    "speaker": "Speaker 3",
    "text": "And it's only 2026. Is the idea that by 2036 there's just way more bets, our AI agents doing research and placing bets and instead of it just being for landmarks maybe, it could just be for"
  },
  {
    "speaker": "Speaker 3",
    "text": "individual houses and neighborhood?"
  },
  {
    "speaker": "Speaker 4",
    "text": "Not quite that far."
  },
  {
    "speaker": "Speaker 4",
    "text": "Look, the sort of agents ecosystem that's being built on Polymarket is one of the most exciting things because when it comes to stable coins and building on chain, it's a much easier for someone to go and build a"
  },
  {
    "speaker": "Speaker 4",
    "text": "an agent that can trade as opposed to going and plugging into Robinhood or some sort of trading site."
  },
  {
    "speaker": "Speaker 4",
    "text": "Which I think is exciting but it's still just infancy of that idea."
  },
  {
    "speaker": "Speaker 4",
    "text": "I do see a world where eventually not only do they trade, they can trade long tail markets and you can build an agent that's like a [ __ ] detector and it's looking at all the telegrams and all the"
  },
  {
    "speaker": "Speaker 4",
    "text": "on the ground inputs and can go and discern what's Telegrams as in telegram channels. Yeah, a lot of the geopolitical insights live in telegram channels. The issue is you never know if"
  },
  {
    "speaker": "Speaker 4",
    "text": "you're in one of the good ones and bad ones."
  },
  {
    "speaker": "Speaker 4",
    "text": "Cuz again, it's just the fog of war."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> No, literally. The The There's an echo of the You said one of the professors here was thanking you for having odds on strikes on this kind of thing. I noticed there was a note. You must have been"
  },
  {
    "speaker": "Speaker 3",
    "text": "getting a lot of inquiries about this because a note was posted by Polymarket saying basically what you just said which is no coincidence cuz Exactly."
  },
  {
    "speaker": "Speaker 4",
    "text": "Well, this was written a long time ago."
  },
  {
    "speaker": "Speaker 3",
    "text": "This was written in 2023."
  },
  {
    "speaker": "Speaker 4",
    "text": "Uh-huh. I guess maybe these markets have been turbulent for a while. Yeah, look."
  },
  {
    "speaker": "Speaker 4",
    "text": "It'd be one thing if these markets were like a billion dollars on the line or even hundreds of millions of dollars, but you go there and it's $30,000 and it gives you a probability. And the other"
  },
  {
    "speaker": "Speaker 4",
    "text": "thing >> saying that's the sweet spot. If there were a billion dollars on the line, I'd be nervous."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> depends. It really depends, but the other thing that I would say that's really important to keep in mind is that some of the Mossad went and used Polymarket to identify people who were"
  },
  {
    "speaker": "Speaker 4",
    "text": "like breaching confidentiality."
  },
  {
    "speaker": "Speaker 4",
    "text": "Polymarket is inbuilt on a blockchain."
  },
  {
    "speaker": "Speaker 3",
    "text": "You can see all the activity. Yeah, we see all of that. Let's see all of that."
  },
  {
    "speaker": "Speaker 3",
    "text": "Let's just see the example of that."
  },
  {
    "speaker": "Speaker 3",
    "text": "Uh there's a wallet at the top."
  },
  {
    "speaker": "Speaker 3",
    "text": "And this is somebody who a beginner's luck, I guess."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Yeah. Again and again and again, they have just nailed it. You know what's so funny? So to to tie it back, just to finish the last point."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Yeah, good."
  },
  {
    "speaker": "Speaker 4",
    "text": "So if people are trading this, it is it's not only public, it's public to everyone. So you can see each person's positions and their activity and And you can even do a simple agent to say, \"I'll"
  },
  {
    "speaker": "Speaker 3",
    "text": "have what they're having. I want to bet what they're betting.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "It's possible. I just think that the thing that people forget is it's not like this is CNN is doing tons of segments on this."
  },
  {
    "speaker": "Speaker 4",
    "text": "And it's not lost on people who are professionals at what's going on. It's people who don't look at this to police."
  },
  {
    "speaker": "Speaker 4",
    "text": "And I think that whatever it is the people who are trading these markets, whether they know something or don't know something. For what it's worth, it's like a big click click baby"
  },
  {
    "speaker": "Speaker 3",
    "text": "headline. The thing that gets the most clicks for all the people who are trying to get engagement on ads. All right, so there's somebody on the Joint Chiefs that might be needing dental work. But"
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah. But you can go and identify. Look, for the for the Maduro one, it's actually a very funny story. It's not what it seems."
  },
  {
    "speaker": "Speaker 4",
    "text": "Uh Let me bust the story."
  },
  {
    "speaker": "Speaker 4",
    "text": "Confidential."
  },
  {
    "speaker": "Speaker 4",
    "text": "Classified. No. It's It's just more of a fluke than it is some sort of exciting thing. Like in in Israel, there was some announcement recently that like they charged two people. Cuz all of"
  },
  {
    "speaker": "Speaker 4",
    "text": "these things get looked into, obviously."
  },
  {
    "speaker": "Speaker 4",
    "text": "This is It's like not It's in plain sight. But yeah, some of the famous ones US-wise like regarding American stuff have ended up being in a dead end. I thought that was interesting. Dead ends meaning just"
  },
  {
    "speaker": "Speaker 4",
    "text": "quite possibly lucky people. Correct. I know I know a narrative violation."
  },
  {
    "speaker": "Speaker 3",
    "text": "Zacks."
  },
  {
    "speaker": "Speaker 3",
    "text": "Good bet on it."
  },
  {
    "speaker": "Speaker 3",
    "text": "Okay."
  },
  {
    "speaker": "Speaker 3",
    "text": "Another example from the sublime to the ridiculous. Does Zelensky wear a suit before July? This is probably a good example."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> I'm being dragged to the ringer. These are all the hardest ones. I didn't even know I was coming to Harvard."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> [laughter] >> Aim to please. No, I love it. This one, I imagine you'd say probably pretty thinly traded market."
  },
  {
    "speaker": "Speaker 3",
    "text": "Obviously, if Zelensky needs a little bit of boost for the Ukrainian treasury, he could play a market."
  },
  {
    "speaker": "Speaker 3",
    "text": "But the reason I brought this up was because will he wear a suit?"
  },
  {
    "speaker": "Speaker 3",
    "text": "And I don't mean to get all philosophy department, but what is a suit?"
  },
  {
    "speaker": "Speaker 3",
    "text": "Cuz if you look and see, here's the menswear guy on X."
  },
  {
    "speaker": "Speaker 3",
    "text": "And he arrived wearing this outfit, a black jacket with matching black pants and a black shirt. So, I don't know. I Not that Harvard is the locus of fashion here, but how many people say that's a"
  },
  {
    "speaker": "Speaker 3",
    "text": "suit?"
  },
  {
    "speaker": "Speaker 3",
    "text": "How many people say that is not a suit?"
  },
  {
    "speaker": "Speaker 3",
    "text": "All right. So, it looks like the no's have it. How do you resolve a bet like I don't resolve it. I know a lot of people think I do. I get a lot of very angry messages. Just mouth you resolve it? No."
  },
  {
    "speaker": "Speaker 4",
    "text": "Look, so when you're on the market page, underneath there's a rule set."
  },
  {
    "speaker": "Speaker 4",
    "text": "And it's just a systemic [snorts] challenge with creating prediction markets that sometimes the rules are ambiguous. Sometimes it's difficult. Now, what people sometimes don't realize is it is a"
  },
  {
    "speaker": "Speaker 4",
    "text": "two-sided market. Yes wins or no wins."
  },
  {
    "speaker": "Speaker 4",
    "text": "It's not us paying someone out. It's not us taking money out of our pocket. So >> You win either way because you take a small rake off of the bets, right?"
  },
  {
    "speaker": "Speaker 3",
    "text": ">> At times. Not on this one. But Is that like you just decide which bets to take a rake from? Uh yeah. How do you decide?"
  },
  {
    "speaker": "Speaker 4",
    "text": "It's a good question. Still figuring it out."
  },
  {
    "speaker": "Speaker 4",
    "text": "Work in progress. Huh. But in in this one Yeah, it's not a suit. That's not a suit. Okay. So, some people may think it's a suit, but it's obviously not a suit more than it is a suit, you know?"
  },
  {
    "speaker": "Speaker 4",
    "text": "So Um It's the lesser of two evils. The issue is that the issue is that the way that the resolution mechanism works is it's like a it's like a decentralized oracle's crowd consensus."
  },
  {
    "speaker": "Speaker 5",
    "text": ">> of credible reporting. Yeah."
  },
  {
    "speaker": "Speaker 5",
    "text": ">> That's a great name for a memoir."
  },
  {
    "speaker": "Speaker 5",
    "text": "Consensus of credible reporting. If I write that, can you guys publish it? Can we do some Harvard research?"
  },
  {
    "speaker": "Speaker 5",
    "text": ">> That's a good deal."
  },
  {
    "speaker": "Speaker 5",
    "text": "But then >> who was really excited to read that."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> [laughter] >> But consensus of credible reporting, that does mean media? Yeah, look, the goal is always for markets to resolve according to the spirit of the market."
  },
  {
    "speaker": "Speaker 4",
    "text": "So consensus credible reporting, one tweet says this, one whatever. But who decides? Somebody's got to decide. I mean, you're going to decide to release the money to somebody. So that's the"
  },
  {
    "speaker": "Speaker 4",
    "text": "whole thing is that basically people can post a bond. I'm going to get really nerdy right now and I'm going to lose a lot of people, but people can decide to post a bond to go and propose whether a market"
  },
  {
    "speaker": "Speaker 4",
    "text": "should be resolved or not. And basically, if people dispute that the resolution is accurate, it goes to a dispute resolution process. And that's where actually gets messy. Uh and is"
  },
  {
    "speaker": "Speaker 4",
    "text": "that run by Polymarket? No, it's run by a third party."
  },
  {
    "speaker": "Speaker 4",
    "text": "But there's improvements coming soon."
  },
  {
    "speaker": "Speaker 4",
    "text": "Soon to be fourth party."
  },
  {
    "speaker": "Speaker 4",
    "text": "Not quite."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Not quite, but close enough. And basically what happens is there's like a two-day period of the dispute where people are kind of basically people are voting on whether or people are putting money on the line"
  },
  {
    "speaker": "Speaker 3",
    "text": "on whether or not Wait, they're betting on the outcome of the bet?"
  },
  {
    "speaker": "Speaker 4",
    "text": ">> The market becomes a bet on the outcome of the bet, but that's what it always was."
  },
  {
    "speaker": "Speaker 3",
    "text": "That's what the market is. Let's just take that one more time."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> Yeah."
  },
  {
    "speaker": "Speaker 3",
    "text": "There's [clears throat] a new bet on whether Vladimir Zelenskyy was wearing a suit, which is different from the bet on whether he would wear a suit."
  },
  {
    "speaker": "Speaker 4",
    "text": "It's the same thing."
  },
  {
    "speaker": "Speaker 4",
    "text": "But the moment that he see the photo >> Yeah."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> What is the market on will he wear a suit versus was he wearing a suit? And we use that to inform who won?"
  },
  {
    "speaker": "Speaker 4",
    "text": ">> No, it's just if it's about an event occurring, you know, the moment the event happens but there's ambiguity, obviously the market becomes about whether or not that was the event or not"
  },
  {
    "speaker": "Speaker 3",
    "text": "immediately."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> Or whether or not this third party, soon to be a third and a half party, is going to say that it happened."
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah. Look, when you are trading a market that's a prediction market that is based on resolution, up until you get paid out, the market is on what it resolved to. So, I appreciate you're"
  },
  {
    "speaker": "Speaker 3",
    "text": "really rising to the hard questions here. This kind of happened not just with his suit, but with another payoff formula, this on whether an Iranian missile would hit Israel or not. And"
  },
  {
    "speaker": "Speaker 3",
    "text": "this happened last week where a journalist said that he had reported that an Iranian missile had hit Israel, and he got an email that was like, \"Hey, factual correction. You might want to"
  },
  {
    "speaker": "Speaker 3",
    "text": "update your story. It was a missile fragment. It had been intercepted.\""
  },
  {
    "speaker": "Speaker 3",
    "text": "And the guy was like, \"No, I'm pretty sure it was a missile.\" And it went back and forth, and it got intense."
  },
  {
    "speaker": "Speaker 3",
    "text": "\"After you make us lose $900,000, we will invest no less than that to finish you. You have 90 minutes left to update the lie and put in the Israeli paper of record, the Jerusalem Post,"
  },
  {
    "speaker": "Speaker 3",
    "text": "that it was a missile and not a missile fragment.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah, I think that was definitely the furthest it's been taken in the history of prediction market. We banned the user and we took went through our our CL error. So wait, you're saying, \"Don't"
  },
  {
    "speaker": "Speaker 3",
    "text": "worry, that user did not get their $900,000.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "That's like a rule, obviously."
  },
  {
    "speaker": "Speaker 4",
    "text": "A rule, you mean it's not a real threat then to the journalist."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Of course it's a bluff, but also the $900,000."
  },
  {
    "speaker": "Speaker 4",
    "text": "Ah, got it."
  },
  {
    "speaker": "Speaker 4",
    "text": "But nonetheless, look like it's What does it say? It's like a an omen or a glaring message to say, \"Hey, this stuff has gotten a lot bigger.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "The more eyes you have, the more dollars you have."
  },
  {
    "speaker": "Speaker 4",
    "text": "Or the more it the onus is on us, especially me as the leader, to go and scale the way that it works. To scale the processes, to ensure the processes, to make them more bulletproof. But a lot"
  },
  {
    "speaker": "Speaker 4",
    "text": "of the time in the early days, let's say that there's this reported this reporting, we would have never thought that real reporters would be going and getting in that or trying to people"
  },
  {
    "speaker": "Speaker 4",
    "text": "trying to coerce like this. And now that's now that's we started seeing like this was the first time something like this really caught on. It crazy back in the drawing board, what are the better"
  },
  {
    "speaker": "Speaker 4",
    "text": "ways to resolve markets. I always thought that eventually there could be like a marketplace of of forums or resolution committees that when you're creating market, you could delegate"
  },
  {
    "speaker": "Speaker 3",
    "text": "resolution to, which is something we're exploring. Uh and that's where again that third-party resolution, if that could somehow be made more robust."
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah, or it's like this is this is like a committee that has that that this is their history of resolving markets."
  },
  {
    "speaker": "Speaker 3",
    "text": "And um they'll be the final arbiter of the truth for this. Got it."
  },
  {
    "speaker": "Speaker 3",
    "text": "And figuring out how to execute it well is distinct from there are bets we shouldn't take. Are there any bets you wouldn't take?"
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah, the geopolitical stuff has been interesting because it's so damn valuable for people and it's like the funny thing, and this is going to sound crazy, but the government built"
  },
  {
    "speaker": "Speaker 4",
    "text": "this in the early 2000s. It was called PAM, Policy Analysis Markets."
  },
  {
    "speaker": "Speaker 4",
    "text": "If you want to read something crazy, go look at Policy Analysis Markets. That sounds like a John Poindexter special."
  },
  {
    "speaker": "Speaker 4",
    "text": "The guy who gave us total information awareness. Yeah. It was Robin Hanson, DARPA."
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah. I definitely read the name John Poindexter when I was reading about it, but I know nothing about him or anything about him at all. But what that was like the idea of having prediction markets on"
  },
  {
    "speaker": "Speaker 4",
    "text": "all these geopolitical escalations and combinatorial markets. If the the thing was like if US invades this country, then what will the price of oil be? Or if this happens, will the price of oil"
  },
  {
    "speaker": "Speaker 4",
    "text": "be? All and this sort of correlation between a ton of things that could happen. For better or for worse, it never really got built. It was a different time. It was shelved in 2003."
  },
  {
    "speaker": "Speaker 4",
    "text": "It was this one could have been because it's such an effective way to aggregate information. We don't the markets that are on that thing on on some people's that thing don't go on Polymarket."
  },
  {
    "speaker": "Speaker 3",
    "text": "Obviously, the Cameni market was like this sort of outlier. And that was not a question of would he be killed, but would he cease to be the head of state."
  },
  {
    "speaker": "Speaker 3",
    "text": "Yeah, like the geopolitical >> And I think in that case, Polymarket pulled the bet and just returned the money to each side and said we're not >> No, the market resolved accordingly. Oh,"
  },
  {
    "speaker": "Speaker 3",
    "text": "because he was no longer the head of state."
  },
  {
    "speaker": "Speaker 3",
    "text": "Yeah, because he was no longer alive."
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah. Okay. Look, it's there's a whole philosophical side to it and then like where the line gets drawn is tricky. I'm not going to sit here and say that I have all the answers, but I do know that when that"
  },
  {
    "speaker": "Speaker 4",
    "text": "news came out the amount of people who went to Polymarket to go and fact-check to say, \"I'm seeing this on Twitter, but I don't know if it's true.\" And then you go on Polymarket and it's 90-something"
  },
  {
    "speaker": "Speaker 4",
    "text": "percent. Wow, okay, this is actually legitimate. People are putting their money on that. Yeah, because remember like you were saying, I know you're trying to say, \"Oh, it is going to"
  },
  {
    "speaker": "Speaker 4",
    "text": "happen.\" And then you're the market becomes did did it happen?"
  },
  {
    "speaker": "Speaker 4",
    "text": "Once something happens, the market inherently shifts from being did it happen to validating if what you're reading on the internet happened."
  },
  {
    "speaker": "Speaker 4",
    "text": "Because you can see a tweet and you can see a lot of tweets that say the same thing, but it may not actually be legitimate."
  },
  {
    "speaker": "Speaker 3",
    "text": "How many bettors would you say bet on Polymarket?"
  },
  {
    "speaker": "Speaker 3",
    "text": "Low six to eight figures billions overall. And do you think do you have a sense of how many are doing it for fun versus how many are doing it because they want to make money? Yeah, look, the"
  },
  {
    "speaker": "Speaker 4",
    "text": "thing that people need to realize is if you look at these geopolitical markets like when you're China's for like March 31st and it's been up for a while."
  },
  {
    "speaker": "Speaker 4",
    "text": "People who are really trying to get a buzz for fun, it's like bundling six bets in like the next hour, you know what I mean? It really doesn't give you that much of a buzz in terms of finance."
  },
  {
    "speaker": "Speaker 4",
    "text": "It's not like it's not like a if someone was like a if someone ran a gambling company, they would not say, \"Oh, this is going to go and move our bottom line. Our customers are going to love this.\" But there is"
  },
  {
    "speaker": "Speaker 4",
    "text": "something really fun about having opinions about what's going on in the world and probably being right and making money."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Instead of just arguing about it and not doing Exactly. Exactly. I think that we have a lot more fiber with that verdict with say shaving that human man, but another thing I'll say"
  },
  {
    "speaker": "Speaker 4",
    "text": "is if you look at Polymarket's traffic it's it's pretty generalist. The amount of people who go on the site are all around the world, if something happens in >> What units do you use to measure it?"
  },
  {
    "speaker": "Speaker 3",
    "text": "Unique views >> Um, visits. Visits? Yeah. How much is it there?"
  },
  {
    "speaker": "Speaker 4",
    "text": "I think in February it was 40 million."
  },
  {
    "speaker": "Speaker 4",
    "text": "Seems like a lot."
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah, it's getting up there."
  },
  {
    "speaker": "Speaker 4",
    "text": "The amount of people who are visiting the site far outweighs the amount of people trading. That's the reality. It says it's the best pitch, I don't know, but >> So a lot of people turn up to see what"
  },
  {
    "speaker": "Speaker 4",
    "text": "the odds are on something."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Exactly. about betting. For comparable products, there's way, way more people visiting compared to traders. That proportion is abnormally high compared to any type of financial trading or"
  },
  {
    "speaker": "Speaker 4",
    "text": "betting or other markets."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> sense. I don't know why I'd go to Charles Schwab just to look at the Dow Jones all day."
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah, it does make sense. It It would definitely doesn't surprise anyone. But when you when you see that, it's like the proof is in the pudding that people find this really useful."
  },
  {
    "speaker": "Speaker 3",
    "text": "I've been trying to puzzle through this chart, which is from Bloomberg, and it's showing who makes money. I think on the basis of the transparency of Polymarket, which is showing wallets"
  },
  {
    "speaker": "Speaker 3",
    "text": "and their bets over time. And our example wallet, who's betting on Maduro, would be in the top 10% and as you can see, they're running positive. And then it looks like everybody else is in the"
  },
  {
    "speaker": "Speaker 3",
    "text": "negative."
  },
  {
    "speaker": "Speaker 3",
    "text": "And I don't know, what advice would you give me if I'm wanting to have fun and ideally make some money?"
  },
  {
    "speaker": "Speaker 4",
    "text": "Look, the cool thing about Polymarket is it's like a tax on [ __ ] So, you may think you know what you're doing, you may think you're smart, and there's no better way to get taught a"
  },
  {
    "speaker": "Speaker 4",
    "text": "lesson and get a reality check than to be convinced that something is a sure thing."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Whatever doesn't make your money >> and throw your money Figure your money where your mouth is. Yeah. And have it end up being wrong. It's like an unavoidable I was due to have this"
  },
  {
    "speaker": "Speaker 4",
    "text": "slide."
  },
  {
    "speaker": "Speaker 4",
    "text": "And about bankrupting bank account, there is no leverage on these markets and you don't get bankrupted. The whole idea of, you know, >> You don't have unlimited funds. No, traditional financial markets futures"
  },
  {
    "speaker": "Speaker 4",
    "text": "leverage options like it is so much more volatile and there's way higher upside."
  },
  {
    "speaker": "Speaker 3",
    "text": "So, from a as a financial product it a lot of people do this. Could somebody come along and say, \"Just as with any other form of speculation, yeah, we'll give you a loan.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "And if I'm like on tilt a little bit, I take that loan, right? It really depends because a lot of these markets can go to zero to one zero or to one instantly."
  },
  {
    "speaker": "Speaker 4",
    "text": "And the whole point of margin and leverage You see it going down and you figure it will eventually go up. Not exactly. You see it going down and you basically nuke their position. You sell their position."
  },
  {
    "speaker": "Speaker 4",
    "text": "You close it. If they're at risk of this is from liquidating their position, if they're at risk of going under. So, if you're letting them have basically have more buying power than the capital"
  },
  {
    "speaker": "Speaker 4",
    "text": "they have, when it starts to go down, you think it's near where your account becomes insolvent, the position automatically closes."
  },
  {
    "speaker": "Speaker 4",
    "text": "Now, you extend that to poly market, if something goes to zero to one immediately, you can't go and liquidate because it's a real world bet. That's a work in progress, but it definitely does"
  },
  {
    "speaker": "Speaker 4",
    "text": "make it it's not really a blow your account type of financial product."
  },
  {
    "speaker": "Speaker 3",
    "text": "There's this one example I thought was amazing. It's betting on Jesus Christ returning before 2027."
  },
  {
    "speaker": "Speaker 3",
    "text": "Currently just under 4%. So, if anybody has inside information, this is your big chance."
  },
  {
    "speaker": "Speaker 3",
    "text": "But, the amazing thing to me about this is that there's a secondary bet, which is will the bet on whether Jesus Christ returns before 2027 be greater than 5% on February 17th between 12:00 and 1:00"
  },
  {
    "speaker": "Speaker 3",
    "text": "a.m. [clears throat] Now, my guess is this is probably a pretty thinly traded position."
  },
  {
    "speaker": "Speaker 3",
    "text": "And again, another insider opportunity, but if I bet this instrument, wouldn't I have reason, possibly, even if I don't think the Messiah is coming, to bet the underlying position in order to win this position?"
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah, but second-order ruin, is there a thing? This is pretty gimmicky. I don't know if that's the right way to put it."
  },
  {
    "speaker": "Speaker 3",
    "text": "It came from you guys, right?"
  },
  {
    "speaker": "Speaker 4",
    "text": "Yeah. Okay. Yeah, but there's there's so many markets that go up on Polymarket."
  },
  {
    "speaker": "Speaker 4",
    "text": "And 99% are innocuous, but you or whoever did the bet, they did a great job of scouring for your own It was me and Crystal, the wonderful uh Presidential election."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> [laughter] >> Got it. Yeah. What you're saying, the basic theme I hear you saying is this is a new thing, this is innovation, there's going to be weirdness."
  },
  {
    "speaker": "Speaker 3",
    "text": "Yeah. And there might be committees or processes to sand off the rough edges, question mark? Yeah."
  },
  {
    "speaker": "Speaker 3",
    "text": "Got it."
  },
  {
    "speaker": "Speaker 3",
    "text": "And maybe you'd say the same for if there is candidate betting. That must be really popular. Which candidate is going to be the nominee or will Tucker Carlson declare for the presidency between this"
  },
  {
    "speaker": "Speaker 3",
    "text": "date and this date?"
  },
  {
    "speaker": "Speaker 3",
    "text": "If we're betting on candidate odds, I could see it being a way better investment of my campaign money to just buy my own odds on Polymarket so that I'm suddenly, inexplicably, a frontrunner, which then that garners the"
  },
  {
    "speaker": "Speaker 3",
    "text": "virtuous circle of I'm a frontrunner, rather than putting it into ads that I hope people see on TV."
  },
  {
    "speaker": "Speaker 3",
    "text": "Do you think that would work?"
  },
  {
    "speaker": "Speaker 3",
    "text": "I don't know. It feels to me like it's an example of reasons to bet on a market not because you expect to win the money, but because you expect that the very signaling function you're saying is one"
  },
  {
    "speaker": "Speaker 3",
    "text": "of the social benefits of the market that you are sending you are putting your money where your mouth is. You're just prepared to swallow it."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, Basically, you're saying that if you wanted to boost your own odds for the sake of optics because a lot of people look at the election of Donald Trump, you would overpay for your own shares."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> Exactly right. Which could then become hyperstitional. It would be a self-fulfilling prophecy because then maybe you would get on that debate stage."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> How much money do you have that you can allocate to it? I'm not really rolling the car off the lot yet, but um how much money would it take?"
  },
  {
    "speaker": "Speaker 4",
    "text": "So, back to what I said, the Polymarket odds are not derived from how much money is put on a certain candidate. So, it's okay, [snorts] they put more money on this candidate, the odds go up."
  },
  {
    "speaker": "Speaker 4",
    "text": "If you were to go If you were to go and let's say you had $10. If you were to go and start buying and buying and the true odds are 10 cents. You want to make it look like 30 cents."
  },
  {
    "speaker": "Speaker 4",
    "text": "When you look at something on Polymarket and it shows 10 cents for an election, and it's been there for a week, that's the true value. That means that something that is worth a dollar, if"
  },
  {
    "speaker": "Speaker 4",
    "text": "that person wins, the market price is 10 cents today."
  },
  {
    "speaker": "Speaker 4",
    "text": "And if you want to go and buy it up to be higher, every time you're buying, someone else is taking the other side."
  },
  {
    "speaker": "Speaker 4",
    "text": "If you want to go and pay double for something, people will very gladly sell you it."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, the thing that I think is forgotten is the stock market the stock you buy it goes up and everyone's why is it going up? And then they're like, \"Oh my god, it keeps going up.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "It's like this social psychology."
  },
  {
    "speaker": "Speaker 4",
    "text": "A political market like that is rooted in actually understanding what the true value is and knowing that it can only be worth a dollar. And it's worth a dollar if they win."
  },
  {
    "speaker": "Speaker 4",
    "text": "And there's people out there that can go and do their own research and do their own modeling and say, \"This person is probably 10% likely to win, but at a maximum they're 13% likely to win.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "Let's just say. And you're coming in here and saying, \"Hey, I have a lot of money and I'm willing to overpay.\" What happens when people try to do that? It goes up to 13, anything higher It It's"
  },
  {
    "speaker": "Speaker 4",
    "text": "in for a rude awakening. They go and they can make a large buy."
  },
  {
    "speaker": "Speaker 4",
    "text": "And the more the moment the market realizes people who are watching the market realize that someone is coming in and spending stupid amounts of money at higher than market price, all the"
  },
  {
    "speaker": "Speaker 4",
    "text": "liquidity shows up, the smart money to come take the other side. And then the crazy person thinks Maduro's getting clocked. Yeah, but that's a whole different market. That market was much"
  },
  {
    "speaker": "Speaker 4",
    "text": "thinner than an election. Got it. So, what's What becomes funny there is by going and trying to boost the odds of artificially, you're actually making the market way more liquid and stronger and"
  },
  {
    "speaker": "Speaker 4",
    "text": "more accurate. Because it's going and creating enough incentive for people to go, smart money to go and deposit more and take the other side. And the final thing I'll say is that money's Even the campaign budgets are"
  },
  {
    "speaker": "Speaker 4",
    "text": "finite."
  },
  {
    "speaker": "Speaker 4",
    "text": "The moment you've cooked that last dollar to work buying it at whatever price, it can go right back down."
  },
  {
    "speaker": "Speaker 4",
    "text": "When you go and look at the odds of something, it's not what the odds were yesterday, it's not what the odds were a week ago, it's not a function of how much has been put on either side. Every"
  },
  {
    "speaker": "Speaker 4",
    "text": "one of these trades has two sides."
  },
  {
    "speaker": "Speaker 4",
    "text": "There's a yes side or no side. It's all fully collateralized. So, for every yes share, someone's holding a no share."
  },
  {
    "speaker": "Speaker 4",
    "text": "What becomes interesting about it is even up in this situation where uh I lost my train of thought."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> That's okay. You were saying that because it's taking a pulse every minute, you'd better have a big war chest Yeah. In order to keep that thing pumped up. Exactly. Or it's going to"
  },
  {
    "speaker": "Speaker 4",
    "text": "fall. That's what you were saying. Thank you. It's been a long day. I know. And so, Just just Yeah. To finish the point before I lose my train of thought again."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, basically, when you look at the odds, what it is it's a depiction of what the market price is on the order book at that moment. So, when you go, I don't know if you have the photo, it's"
  },
  {
    "speaker": "Speaker 4",
    "text": "not scandalous enough to make it into this deck. It's not in our hall of fame worst moments. But you look at the order book and you see where the bids and asks are and in any moment you can derive"
  },
  {
    "speaker": "Speaker 4",
    "text": "market price from that. It says there's people sitting here willing to buy at 18 cents and below, but but the best bid is 18 cents and the best ask is at 19 cents. But the last trade was at 19"
  },
  {
    "speaker": "Speaker 4",
    "text": "cents and it's been like that for the past hour and that's telling you, \"Hey, the market of all the people who are looking at this think it's around 19% likely.\" And what people, you know, fail to recognize"
  },
  {
    "speaker": "Speaker 4",
    "text": "is once you start buying and buying the moment you made your last buy there's no one to continually ar- artificially inflate it. The trade has gone and it and who's going to make up"
  },
  {
    "speaker": "Speaker 4",
    "text": "after Sue Flood? Who's going to make the orders right after? It's going to be the same people who made the orders before and they've already decided what they think is true value. Yep. Seems true at"
  },
  {
    "speaker": "Speaker 4",
    "text": "least for a highly liquid market with confidence. So the thing about a highly liquid market is even if the market has $100 on both sides and it's one cent spread, it's still a a siren of, \"Hey, if this market's"
  },
  {
    "speaker": "Speaker 4",
    "text": "mispriced, come and make free money.\" So if you think it's 40 and and they'll sell to you at 19, this is an indiscriminate ask of like, \"Oh, I'll sell anyone who shows up at this price.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "So the fact that it's sitting there in and of itself is a signal that it can't be it can't true value can't be that much more likely than whatever it says."
  },
  {
    "speaker": "Speaker 3",
    "text": "If you're game, we should take a couple of questions before we wrap. And while we're here, is the market going to get more difficult or easier on this question?"
  },
  {
    "speaker": "Speaker 3",
    "text": "We'll find out. I think there are folks with mics that can run them to folks that have hands up. And while that's happening, I'm just curious, what's the clock speed of Polymarket?"
  },
  {
    "speaker": "Speaker 3",
    "text": "How derivatively thin is the timing as to how quickly bets can be placed and prices can move?"
  },
  {
    "speaker": "Speaker 3",
    "text": "In real time."
  },
  {
    "speaker": "Speaker 4",
    "text": "It's derivatively small."
  },
  {
    "speaker": "Speaker 3",
    "text": "I I say I fully understand. What's the question? Is it I don't know like aren't there friends at James Street? Aren't James Street fans here?"
  },
  {
    "speaker": "Speaker 3",
    "text": "That's the other conference."
  },
  {
    "speaker": "Speaker 3",
    "text": "There are folks that are said to have staged their servers for placing trades on financial markets."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> Yeah, colocation. Physically closer to the NASDAQ servers so that there isn't as much of a delay at the speed of light to make the trade so they can get ahead of the next trade. Yeah."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> Yeah, look There are their own idiosyncrasies that map to high frequency trading and colocation. For blockchains, it's a lot less relevant for prediction markets because high frequency trading"
  },
  {
    "speaker": "Speaker 4",
    "text": "is just the volatility of a stock at any given moment and being able to front run a retail trade is just a an entirely different beast than something that underwriting a specific I don't know."
  },
  {
    "speaker": "Speaker 4",
    "text": "Sounds to me the moment the bomb goes off, whoever Well, that's the one that's the one scenario that Yeah, it's every once in a while."
  },
  {
    "speaker": "Speaker 4",
    "text": "Uh I know that there's people who go and if they're trading algorithmically, they'll they'll host it in a cloud that's in a certain place. But yeah, it's not as as thorough of a industry as"
  },
  {
    "speaker": "Speaker 3",
    "text": "a high frequency trade."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> And I guess you all don't do stop and limit orders, but I could have my agent my AI agent do that."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> We do have limit orders just not stop loss. Cuz again, unlike a stock where things move linearly, it can go to zero or one immediately. So if you think you have a stop loss, but"
  },
  {
    "speaker": "Speaker 4",
    "text": "the market executes, you may not get filled at that. You may get filled at zero. Got it."
  },
  {
    "speaker": "Speaker 3",
    "text": "All right, might as well maybe have found the place. Whoever has one, where is All right, we have somebody with a mic."
  },
  {
    "speaker": "Speaker 3",
    "text": "Feel free to identify yourself or not as you choose and ask your quick question."
  },
  {
    "speaker": "Speaker 3",
    "text": "First of all, thank you so much for this discussion and James. You look really good by the way. I appreciate it. I can I just say that is a suit."
  },
  {
    "speaker": "Speaker 7",
    "text": "You both have suits you should know."
  },
  {
    "speaker": "Speaker 7",
    "text": "Yeah, my name is Avi, first year at HBS."
  },
  {
    "speaker": "Speaker 7",
    "text": "My question is to Shane, Professor Duchin as well, is markets work because we assume collective wisdom over crowd following."
  },
  {
    "speaker": "Speaker 7",
    "text": "At a philosophical level, when do you think we draw the line between when markets get influenced and turn into crowd following versus collective wisdom? And yeah, both of Professor"
  },
  {
    "speaker": "Speaker 7",
    "text": "Duchin's thoughts are helpful."
  },
  {
    "speaker": "Speaker 4",
    "text": "I think that the way the market is structured, what is the incentive? The incentive is if you think the price is too low, you buy. If you think the price is too high, you buy now."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, crowd following is interesting. I don't know how to strictly define it, but what I would say is if you have a ton of people, let's say 99% of the individuals who are participating"
  },
  {
    "speaker": "Speaker 4",
    "text": "in the market are crowd followers, and one person is a geopolitical expert and shrewd and has a complete fixation with finding the truth, they can go and say, \"This market has bias."
  },
  {
    "speaker": "Speaker 4",
    "text": "It is mispriced.\""
  },
  {
    "speaker": "Speaker 4",
    "text": "And they could go and say, \"I think this is undervalued.\" or \"I think this is overvalued.\" and put their money where their mouth is. And if they do that consistently, one, it influences the"
  },
  {
    "speaker": "Speaker 4",
    "text": "market, but two, over time they'll make money. And I think what you find is a lot of the smartest traders look for bias as a way to decide what markets to get in."
  },
  {
    "speaker": "Speaker 4",
    "text": "But it's it's a it's like a mental model for finding alpha in these markets to say, \"Where is there bias? Where are there crowd followers?\" And as a result, it regulates. But it's a totally valid"
  },
  {
    "speaker": "Speaker 4",
    "text": "concern. It's just that the way that it works on a stock where it can just go up infinitely and it does become crowd following. But who knows, maybe it can be crowd following forever. Some stocks"
  },
  {
    "speaker": "Speaker 4",
    "text": "trade higher and they never came back down. They never come back down. But for prediction markets, the cool thing is you know it's going to be worth a dollar. You know there's no leverage."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, when you do see bias, when you do see crowd following, you can just put your money where your mouth is."
  },
  {
    "speaker": "Speaker 4",
    "text": "And that ultimately goes and makes market accurate."
  },
  {
    "speaker": "Speaker 3",
    "text": "I'll defer my answer to get more questions in. Is there another mic over here or is it just tight?"
  },
  {
    "speaker": "Speaker 8",
    "text": "Over here. Shayne, I want to talk about leverage. So, you just on limiting leverage for when resolution comes. So, you're talking about that's a major limit. But, what happened to just"
  },
  {
    "speaker": "Speaker 8",
    "text": "betting on speculation? And what sort of catalyst speculation has in allowed leverage to happen up until 24 cut it off 24 hours before resolution happens?"
  },
  {
    "speaker": "Speaker 8",
    "text": "Or what sort of things will catalyst will allow I work in leverage prediction markets."
  },
  {
    "speaker": "Speaker 8",
    "text": "Epex, what's your leverage prediction market called? It's called Leverage Markets."
  },
  {
    "speaker": "Speaker 8",
    "text": "Got [laughter] it."
  },
  {
    "speaker": "Speaker 4",
    "text": "I'll check it out. Yeah, it's a great question. Look, what it comes down to is there's markets that have sudden death and there's markets that don't. The markets that are going to be known at a"
  },
  {
    "speaker": "Speaker 4",
    "text": "specific time and it's physically impossible for it to be resolved prior, you can work out leverage for. That's a great example. Now, the ones that could go to zero to one at any time, you"
  },
  {
    "speaker": "Speaker 4",
    "text": "know, you could say, \"Oh, it probably won't happen.\" But, the fact that it can, especially when you go and like pro rate risk, like if someone liquidates and it's underwater like it gets pro"
  },
  {
    "speaker": "Speaker 4",
    "text": "rated amongst all other people who have who are have their collateral in the system, it's a bit more tricky. But, yeah, I look at something I hope for us to be able to do at some point,"
  },
  {
    "speaker": "Speaker 4",
    "text": "especially with institutional contracts like people are not used to the cost of capital of having to fully collateralize everything. That's outlandish to a lot of the people who would do really large"
  },
  {
    "speaker": "Speaker 4",
    "text": "size, like people [clears throat] buying insurance. So, Yeah. You're working on something cool."
  },
  {
    "speaker": "Speaker 3",
    "text": "I'll check it out. Thanks."
  },
  {
    "speaker": "Speaker 3",
    "text": "Let's go back to the question of how much you Polymarket is and will be offering is one simple engine that you've been describing versus should we get into the assisting people with leverage business? Well, if"
  },
  {
    "speaker": "Speaker 4",
    "text": "leverage is an interesting word, like most markets, financial markets, they don't end up being fully collateralized forever. It's just capital inefficient."
  },
  {
    "speaker": "Speaker 4",
    "text": "The more that you can go and responsibly let people have leverage, the more liquidity you've got, the more healthy markets are."
  },
  {
    "speaker": "Speaker 6",
    "text": "Back over here, I gather. Whoever has the mic."
  },
  {
    "speaker": "Speaker 6",
    "text": "Hi, my name is Charlie. I'm a junior at Harvard studying math electrical engineering. And I'm really interested in finance and working for a hedge fund this summer. And my question is related"
  },
  {
    "speaker": "Speaker 6",
    "text": "to using Polymarket as a tool to enhance maybe like traditional finance work. Do you think there's like any sort of future for trading derivatives both exchange-traded and OTC like via"
  },
  {
    "speaker": "Speaker 6",
    "text": "Polymarket or where the underlying is Polymarket contracts?"
  },
  {
    "speaker": "Speaker 4",
    "text": "It's a great question."
  },
  {
    "speaker": "Speaker 4",
    "text": "Yes."
  },
  {
    "speaker": "Speaker 4",
    "text": "Structured products, multi-leg spreads, all different types of bespoke derivatives, uh there's so much notional traded."
  },
  {
    "speaker": "Speaker 4",
    "text": "And there's really a lack of of price discovery in those markets. So, the idea that anyone could go and create a Polymarket or derivative that mapped to something in particular to me is like"
  },
  {
    "speaker": "Speaker 4",
    "text": "inevitable. It's a matter of time before that goes and pervades traditional finance, but it's not going to be easy."
  },
  {
    "speaker": "Speaker 4",
    "text": "There's There's a lot of drudgery that has to come before that works. However, like you said, the idea of looking at Polymarket odds and that having become such a pillar of modern finance, like"
  },
  {
    "speaker": "Speaker 4",
    "text": "that's a great start."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, when you're at that hedge fund, you can go campaign for it. Thank you."
  },
  {
    "speaker": "Speaker 3",
    "text": "You're welcome. Let's take one more over here. I assume the mic found you. Can you hear me?"
  },
  {
    "speaker": "Speaker 9",
    "text": "Yeah. Yeah. Oh, what's up? I'm Shivi from the Math Research Lab, funny enough, with a product called Hyperstation. And the question I'm going to ask is you probably can't avoid people trying to control the market and"
  },
  {
    "speaker": "Speaker 9",
    "text": "hyperstations will assert price to existence or same result to existence."
  },
  {
    "speaker": "Speaker 9",
    "text": "And then you beg a question of information asymmetry. Is there a way that you think could de-risk information asymmetry within markets to prompt some sense of risk assessment within"
  },
  {
    "speaker": "Speaker 9",
    "text": "Polymarket? And how do you do that systematically?"
  },
  {
    "speaker": "Speaker 4",
    "text": "It's a great question. Obviously, it's not easy."
  },
  {
    "speaker": "Speaker 4",
    "text": "Look, markets people don't want to lose money. And you think about information asymmetry. And if you're going and you're posting large amounts of liquidity, and there's a market where there's high"
  },
  {
    "speaker": "Speaker 4",
    "text": "likelihood of there being information asymmetry, you can get caught."
  },
  {
    "speaker": "Speaker 4",
    "text": "So, I think what most people do usually is they'll post a lot of smaller size of liquidity."
  },
  {
    "speaker": "Speaker 4",
    "text": "And that way, anytime they get hit, they can't get hit for a huge amount. And if they get hit and they can do a quick check on who hit them and see is it some random new account or is it Do they keep"
  },
  {
    "speaker": "Speaker 4",
    "text": "buying right after? Do they buy instant next walls? Or did they just do a little hit? Then they'll go and repost liquidity. In in the abstract, it's it's like totally about worry, but it also is"
  },
  {
    "speaker": "Speaker 4",
    "text": "in a lot of markets in the literal practical sense."
  },
  {
    "speaker": "Speaker 4",
    "text": "And there there are ways that people mitigate that risk, right? And we're watching them in real time."
  },
  {
    "speaker": "Speaker 3",
    "text": "Is it possible to have an arbitrary number of wobbles as a validator?"
  },
  {
    "speaker": "Speaker 3",
    "text": "Yeah."
  },
  {
    "speaker": "Speaker 3",
    "text": "So, I could just pretty readily have my cloud bots simulate 100,000 small bets rather than one big one."
  },
  {
    "speaker": "Speaker 4",
    "text": "It's not that simple, but the other thing that I would just say is on chain you can see the source of funds. If you were to go and create that many, you would be like, \"Okay, where were these"
  },
  {
    "speaker": "Speaker 4",
    "text": "funded from?\" It was all funded from this Tell them all that wallet Tell them it's where you're still coming from. If you were doing shell corporations, but you track exactly where how much money"
  },
  {
    "speaker": "Speaker 4",
    "text": "was in the wallet publicly, in the bank account, where it came from, back to the person."
  },
  {
    "speaker": "Speaker 3",
    "text": "Wouldn't be that good of a shell. Got it."
  },
  {
    "speaker": "Speaker 3",
    "text": "I think we're at time."
  },
  {
    "speaker": "Speaker 3",
    "text": "I know Shane has agreed to stick around for a few minutes uh and be able to chat with people. This has been a really kaleidoscopic time chatting over things."
  },
  {
    "speaker": "Speaker 4",
    "text": "It does feel like how edgy the edge cases are is one of the big questions. Like Yeah, look, I'm not here to come and say I figured it all out. I'm very grateful that I'm so passionate about prediction markets and"
  },
  {
    "speaker": "Speaker 4",
    "text": "decision markets and what could be possible and I've been able to play a role in bringing it to life, but that's created a whole new set of problems."
  },
  {
    "speaker": "Speaker 4",
    "text": "But I'm going to try my damn best. I know my team my team and I will try really hard to go and iron out so that we can see it through. Our mission is to will the promise of prediction markets"
  },
  {
    "speaker": "Speaker 3",
    "text": "into existence. So wake up every day and do that thing. Got it."
  },
  {
    "speaker": "Speaker 3",
    "text": "Please join me in thanking Shayne Coplan."
  },
  {
    "speaker": "Speaker 4",
    "text": ">> [applause] [applause] >> So first of all, I'll stick around. The final thing I'll say is we are hiring."
  },
  {
    "speaker": "Speaker 4",
    "text": "If you are cracked, if you love this stuff as much as we love this stuff, come find us."
  },
  {
    "speaker": "Speaker 5",
    "text": "Matt Clark, raise your hand. What's your email?"
  },
  {
    "speaker": "Speaker 5",
    "text": "Clark with no e. Clark@polymarket.com."
  },
  {
    "speaker": "Speaker 5",
    "text": "Keep it coming and I would love to hear from you."
  },
  {
    "speaker": "Speaker 5",
    "text": ">> [applause]"
  }
]