Author: Ma Tou, Da Da Luo Si Prediction markets may be the only field in 2025 that can simultaneously excite esteemed dollar fund investors, crypto natives, and media practitioners. There are many logical reasons to be optimistic about it, such as arbitrage between state and federal regulation in the US, huge transaction fees brought by the extreme extrapolation of 0DTE, and the convergence of the content industry and light betting, etc.

But today, we won’t talk about these. Instead, we’ll discuss the spirit behind prediction markets and how this spirit aligns with a16z, which champions “New Media,” becoming one of the most important pieces in its new media empire.

Prediction market products are simple (at least on the surface). They transform binary options into bets on arbitrary events and information, but the underlying spiritual core has undergone several periods of change. The earliest discussions about prediction markets actually originated from Hayek. In his view, knowledge is unevenly distributed, and the market, as a coordination mechanism, mobilizes information from all corners of society. From merchants to experts, the judgments of different people about the future converge into a price on the order book in prediction markets.

After Hayek, the torch was passed to Robin Hanson. The old man is still very active on Twitter, battling with crypto natives. His main contribution was designing a mechanism called the Logarithmic Market Scoring Rule (LMSR), which incentivizes those who know the truth to speak it. This design basically established the current paradigm for prediction market design. With such incentive mechanisms, information holders from all corners are motivated to contribute their information and participate in the market.

Extrapolating further, such markets could also be used for public governance. By opening a market for every future issue, where everyone votes with real money, the future landscape is constructed through the changes in odds on the order book. Such a utopia is called Futarchy, formed from “future” and the suffix “-archy” denoting a system of government.

All of the above are part of the official history, things that would be covered in a timeline presented in a university microeconomics lecture. However, I believe that subsequent metaphysical discussions about prediction markets are largely meaningless until a16z turned its attention to this field.

a16z engaged with the prediction market company Kalshi in ’24 and invested in its $5 billion round in August ’25. Whether there was a discount is currently unknown. Kalshi’s valuation has now reached an astonishing $22 billion, making it the fastest-growing company besides AI companies. After building its position, a16z began to activate its media machine, writing a series of long articles explaining why Kalshi is one of the most important companies of this era.

To be honest, while exchange and casino businesses are tempting, they have always received relatively low PE multiples in the market due to potential compliance pressures and ethical risks. It’s clear that a16z’s vision extends beyond this. So, what is the importance of Kalshi, or the entire prediction market sector? a16z’s answer is “presence.”

At the current juncture, human contact with the world is actually separated by a layer of plastic film, much like you can only browse the front end of a webpage but know nothing about its back-end construction. You can consume the audio-visual experience, narrative, and even “real feelings” of the front end, but you cannot change or be present. Not to mention that, clearly, in the not-too-distant future, even the transformation of the real world will be increasingly outsourced to agents. So, what is humanity’s role in the historical process?

However, prediction markets offer a way to intervene, called prediction. It requires you to bet with real money, and then, like buying a ticket to enter a stadium, you participate and observe the fluctuations in probability throughout the process. You are willing to bear theta decay, and you must screenshot the prediction market and forward it to all your groups, loudly proclaiming your position and the views behind it. This feeling is very anti-cynical. In an instant, the infinite distance, endless people, the selection of cardinals, the depth of snow in New York, the rise and fall of crude oil within five minutes, and even whether Jesus will return in 2026, all become relevant to you.

All the uncertainties and powerlessness of postmodernity collapse under your powerful predictions. You are no longer a gambler; you are a distinguished super-observer, a prophet of your tribe, a calm bystander of history. When enough people start using, discussing, and relying on this medium, the authority of the market itself will begin to rise. Kalshi will hold the ultimate interpretive power over an event’s: 1. Truthfulness 2. Importance. This is undoubtedly a key component of the new media empire envisioned by a16z.

Finally, let’s talk about this new media as defined by a16z. In fact, from the first generation of In-house Media advocated by a16z and YC, to the second generation represented by 20VC and Not Boring Capital, where VCs grew out of media, to the final acquisition of media companies like TBPN by corporations and institutions, media power has been constantly shifting and decentralizing. Public opinion battlegrounds have moved from blogs and TV shows to Twitter and podcasts. Talking about VCs also needing to do content and branding, and helping founders with distribution, is already unoriginal in 2026.

What a16z calls new media is a full-spectrum engineering endeavor. From upstream narrative setting, midstream product financing and promotion, to downstream customer acquisition, everything is within its range, and at a speed far exceeding that of traditional media and agencies. What might have taken 3-6 months for a planning proposal in the past, new media will complete in a few weeks with founder podcasts, short video clips, AI-generated release videos, newsletters about the company’s spirit and development plans, etc., releasing information with extreme intensity in an extreme amount of time. They call this “taking over the timeline.”

[MTS]