XO Market bets on user-generated prediction markets to rival Polymarket and Kalshi
Backed by 20VC, Picus Capital and Coinbase Ventures; XO lets users create and profit from their own prediction markets, and plans to rollout a new vault product to democratize market making.
XO Market bets on user-generated prediction markets to rival Polymarket and Kalshi
Backed by 20VC, Picus Capital and Coinbase Ventures; XO lets users create and profit from their own prediction markets, and plans to rollout a new vault product to democratize market making.
Ali Habbabeh and Walid Al Habboul, co-founders of XO Market. (XO Market)
What to know:
XO Market lets users build and run prediction markets, unlike curated platforms like Kalshi.
The platform has more than 600 active listings with rising participation, driven by a “natural selection” dynamic where only the most engaging markets attract liquidity.
The company is set to introduce XO Vaults, which will allow users to pool capital into strategies that provide liquidity across prediction markets.
“Today’s major platforms like Kalshi and Polymarket act more like Netflix,” Habbabeh told CoinDesk in an interview. “They decide what markets exist. We’ve flipped that model entirely. On XO, users create the markets themselves.”
The distinction is critical. While incumbents rely on internal teams to curate and list prediction markets, XO allows individuals or companies to spin up their own markets, set parameters and fees, and let others trade on them. The result, Habbabeh said, is a broader, and often more creative, set of opportunities.
“We believe the future of prediction markets is user-generated. The best markets aren’t decided by a platform, they emerge from the community.”
Mainnet beta launch
The model appears to be gaining traction. Since starting its mainnet beta in mid-November, XO has generated more than $150 million in trading volume, attracted over 30,000 users and seen more than 600 user-created markets. An earlier pilot began in April 2025 with a testnet rollout.
“The metrics look strong because the incentives are aligned,” Habbabeh said. “If you create a compelling market, people trade on it. If you don’t, it dies naturally.”
That “natural selection” dynamic may be a double-edged sword. Even Habbabeh points out that competing user-generated platforms like Nine Lives and Warm Protocol struggled to convert the concept into meaningful liquidity, resulting in inactive markets or minimal trading activity.
It is unlikely that Polymarket or Kalshi will offer user-generated markets, according to Habbabeh, because they would need to find market makers willing to provide liquidity for thousands of different events and would have to alter their infrastructure. Their current models are also extremely profitable, he added.
Prediction markets are gaining traction beyond their niche origins, drawing increased interest from retail traders and institutional participants alike as a new venue for pricing uncertainty. Advances in digital-asset infrastructure have lowered barriers to entry, while a series of high-profile political and economic events has underscored the limitations of traditional forecasting tools.
The result is a growing number of platforms where contracts tied to real-world outcomes are traded with increasing liquidity, positioning prediction markets as an emerging, and lightly regulated, complement to conventional financial markets.
Total industry volume jumped roughly fourfold to more than $60 billion in 2025, up from about $15 billion–$16 billion the year before, with platforms like Polymarket driving much of that growth.
On Polymarket specifically, monthly trading exploded from just $54 million at the start of 2024 to over $2.6 billion the following November, helping push cumulative volume past $9 billion in a single year.
XO Vaults
Alongside its core platform, XO is preparing a new product aimed at “democratizing” another key part of the ecosystem: market making.
The forthcoming “XO Vaults” will allow users to pool capital into strategies that provide liquidity across prediction markets, something traditionally dominated by professional firms.
“On platforms like Kalshi or Polymarket, liquidity is controlled by a handful of large market makers,” Habbabeh said. “With XO Vaults, anyone can become a market maker.”
Users will be able to create vaults tied to specific strategies or categories, such as sports or politics, and earn fees by supplying liquidity. Others can invest in those vaults, effectively gaining exposure to market-making returns without actively trading.
“It’s similar to copy trading, but for liquidity provision,” Habbabeh said. “We’re targeting yields of around 8% to 10% annually based on what market makers typically earn.”
The product, expected to debut within weeks, could introduce a new yield primitive in decentralized finance, blending prediction markets with passive income strategies.
“Not everyone wants to bet on outcomes,” Habbabeh said. “Some people just want to earn from the activity around those markets.”
Parlays
The XO team is also developing a feature it says could reshape how parlays work in prediction markets.
“It’s not your typical copy-paste of sportsbook parlays into prediction markets,” said Habbabeh.
The feature, tentatively named “XO Stories,” aims to give users more creative control by linking multiple outcomes beyond traditional parlays. Though details remain limited, the team says pricing will be dynamic, offering a new take on prediction markets.
Built on XO Vaults, the system is meant to support complex, multi-outcome structures without simply aggregating existing trades. Habbabeh shared few details, but suggested it could reshape how users think about and use parlays.
The best content comes from users
Despite increased regulatory scrutiny around prediction markets, particularly in the U.S., Habbabeh said he believes XO’s onchain, permissionless design could offer advantages.
“Everything on XO is transparent and onchain,” he said. “That puts us in a different category compared to more centralized platforms.”
For now, the focus remains on growth and product expansion.
As XO builds out its ecosystem, Habbabeh is confident the user-generated model will continue to differentiate it.
“The internet showed us that the best content doesn’t come from centralized studios, it comes from users,” he said. “We think prediction markets will follow the same path.”
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.
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