In order for prediction markets to become global truth infrastructure, they must first overcome their biggest obstacle — liquidity. Most platforms struggle to attract consistent market depth and active participation. Space solves this by taking inspiration from Hyperliquid’s model; user acquisition and retention loops through airdrop distribution, gamification and rewards to the most active participants of the platform.
The Perfect Storm
Three forces are converging to make prediction markets mainstream:- Technology is Ready
Blockchain infrastructure has matured. Solana delivers the speed and cost structure needed for high-frequency, small-stake markets. Smart contracts can enforce rules transparently without intermediaries. - Culture is Primed
The 2024 election put prediction markets into the spotlight. Polymarket dominated news cycles. Crypto natives embraced gambling mechanics through pump.fun and memecoins. The appetite for markets-as-entertainment has never been higher. - Demand is Undeniable
Institutions need better forecasting tools. Individuals want exposure to outcomes they understand. Capital is searching for uncorrelated returns. The demand exists - the supply hasn’t matched it yet.
The Opportunity
On top of the window of opportunity now open for prediction markets, there are also challenges that demand solutions. Most of which are well recognized - by builders, analysts, and investors alike - and are waiting for decisive answers (ChainCatcher, 2024). Liquidity: The biggest issue that prediction markets face is liquidity; markets outside major US elections are thin and easily manipulated. A $10,000 order can swing odds by 10%+ on important but niche topics, thus making prices unreliable and discouraging institutional participation. They lack user acquisition and retention loops that keep users continuously coming back to the platform. Capital Inefficiency: Users lock funds until resolution - sometimes months or years. Returns are capped (0 to 1) which provides low return rates by default (no leverage). No ability to provide liquidity across multiple outcomes. Capital sits idle when it could be working harder. Poor User Experience: Platforms decide what you can trade on and keep 100% of platform fees. No retention mechanics like daily tasks, streaks. No rewards for contributing liquidity. No incentive to stay beyond a single trade. Expert Exodus: The people with the best information often don’t participate. Why? Returns are too low, markets are too illiquid, and there’s no way to signal expertise beyond placing a single trade. Markets miss the very insights that would make them valuable. Result: Prediction markets remain a curiosity instead of infrastructure.How Space Wins
Space is designed to solve these issues through the following core innovations:- Architecture: True price discovery through transparent order books. Users trade against each other, not the platform. Market manipulators are penalized with higher fees.
- Growth and Liquidity Flywheel: Airdrop seasons, points and usage-based rewards direct token distribution toward the most active traders and liquidity providers, thus aligning real participation with ownership.
- Multi-Outcome Markets: Pool liquidity across related outcomes. One deep market instead of ten shallow ones.
- Leverage Multiplier: Increase position sizes without locking more capital. Better returns attract bigger participants.
- Continuous Trading: Don’t wait months for resolution - exit anytime. Manage risk like a real trader.
- Engaging User Experience: Points system rewarding active engagement on the platform, liquidity provision and early participation. Trading competitions, referral rewards, leaderboards and achievements.