“sniping a 10-cent contract to 99 cents proves continuous order books are broken for binary assets”
Uses the case of a trader sniping Polymarket's geopolitical strike markets at 10 cents to argue that continuous order books are structurally broken for binary assets. In traditional markets, sniping costs basis points; in prediction markets, it costs 80 cents on the dollar because prices jump from 0.10 to 0.99 on a single tweet. Proposes frequent batch auctions (citing Budish, Cramton, and Shim) to shift competition from speed to price accuracy, and introduces the concept of a 'liquidity mirage' where the highest social-value markets are precisely those where passive liquidity is unsustainable.
Some technical background helpful
Platforms mentioned: Polymarket, Kalshi