The Capital Problem in Prediction Markets
Prediction markets are powerful coordination tools. They price probability, aggregate information, and reflect collective intelligence in real time.
But they remain structurally capital inefficient.
When a user opens a position, their capital becomes isolated. It sits locked in a single market until resolution. That value cannot be reused as collateral, cannot support additional strategies, and cannot contribute to broader liquidity.
As open interest grows, liquidity fragments. Capital utilization remains low. Traders must choose between maintaining exposure and accessing liquidity.
The forecasting layer of the internet lacks a capital efficiency layer.