a16z Advisor: Only 1.3% of Political Contracts in Prediction Markets Have Liquidity, Suggests Introducing AI Agents to Provide Liquidity

Odaily News Stanford Business School professor and a16z & Meta advisor Andy Hall posted on platform X, stating that his team has established a new dataset focusing on political prediction markets, liquidity, and settlement rules. The research found that the vast majority of political contracts in prediction markets lack activity, with only 1.3% of contracts having sufficient liquidity. Kalshi and Polymarket rarely list identical contracts with the same rules, leading to further fragmentation of liquidity.

Andy Hall proposed four improvement suggestions: First, list contracts on core issues, collaborating with independent institutions to define markets of social concern; Second, pay fees to market makers to inject initial liquidity into political markets; Third, introduce AI agents to trade in areas where humans do not participate, generating price references needed by society; Fourth, establish unified definitions and settlement rules across platforms. Andy Hall believes these measures will attract traders hedging political risks, making prediction markets the truth machine society needs.