“prediction markets need peer-to-peer liquidity, not just professional market makers”
Argues that central limit order books fixed the capital destruction problem of early Polymarket AMMs but introduced a new pathology: passive participation is impossible, and only professional market makers can quote. Kalshi reportedly has 23 active market makers with the top three providing 70% of election-contract liquidity, meaning any market those firms ignore is dead on arrival. Positions this as the reason prediction markets remain concentrated in politics and sports while entertainment, science, and culture verticals stay empty, and makes the case for peer-to-peer architecture that lets the first participant seed liquidity for the second.
Some technical background helpful
Platforms mentioned: Polymarket, Kalshi