a16z Crypto Policy Head: Predictive Markets as Information Machines, AI Agents + Public Chains to Create New Business Models

On May 2, Miles Jennings, head of policy at a16z crypto, stated, "We have formally responded to the proposed rulemaking by the U.S. Commodity Futures Trading Commission (CFTC) regarding predictive markets. Predictive markets are one of the most powerful tools available today, capable of transforming fragmented and decentralized information into effective information with real reference value. Unlike opinion polls, predictive markets operate continuously around the clock and feature an incentive mechanism. Participants invest real money based on their views, meaning that the market prices reflect genuine positions rather than arbitrary subjective opinions.

Predictive markets are experiencing rapid growth. Kalshi’s weekly trading volume has surged tenfold this year, reaching $3 billion. However, what is even more noteworthy is the future development trend: AI agents can process vast amounts of information and autonomously execute trades on permissionless public chains. The combination of these two technologies will give rise to entirely new business models that far exceed the current industry scale.

Despite the promising outlook, regulatory uncertainty poses a threat to the future development of this industry.

Our proposed solutions will help the industry unlock its potential: clearly reaffirming the CFTC’s exclusive jurisdiction, improving the contract dispute resolution mechanism, strictly controlling market manipulation and insider trading, adopting a case-by-case approach for public interest determinations, and exploring diversified compliance pathways.

The significance of predictive markets is not merely about betting on various events; at its core, it is an information machine. The regulatory rules currently being developed by the CFTC will directly determine whether this technology is constrained in its infancy or can fully unleash its development potential.

We hope the committee can seize this opportunity.

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