“prediction market prices are derivatives quotes, not just probability forecasts”
An academic paper that examines cryptocurrency prediction markets through the lens of derivatives pricing, using trade data from Kalshi and Polymarket. Treats event contracts as option-like claims and analyzes their prices for variance risk premia, volatility patterns, and skewness — asking how much of a prediction market price reflects a probability forecast versus compensation for risk. Offers a framework for reading crypto prediction market prices as derivatives quotes rather than pure consensus estimates.
Extensive technical background assumed
Platforms mentioned: Kalshi, Polymarket