Gatsby

Universal risk infrastructure built on prediction markets

The Thesis

Prediction markets will not reach their potential as gambling platforms. They will succeed by doing what markets do best: allocating risk to those most willing to bear it. Today's prediction markets are trapped in a low-liquidity equilibrium, dominated by speculators chasing lottery tickets while economically meaningful events remain illiquid ghost towns. The missing ingredient isn't better marketing or regulation—it's utility-driven flow. Traditional derivatives markets thrive because farmers hedge crops, airlines hedge fuel, and portfolio managers hedge macro risk. These participants rationally accept negative expected value for reduced variance. Prediction markets lack this entirely.

We're building the Risk Translation Layer: an AI-driven platform that converts real-world exposure into automated hedges on regulated prediction markets.

The Vision

Map portfolios to event risk. Our system analyzes user portfolios and decomposes them into underlying risk factors—macroeconomic shocks, geopolitical events, climate volatility, regulatory changes.

These exposures are then mapped to live prediction market contracts.

Execute optimized hedges. We construct bundled hedges across relevant contracts and execute automatically. By routing utility-driven hedging flow, we introduce benign order flow that reduces market maker risk—not through altruism, but through orthogonal incentives.

As liquidity deepens and spreads tighten, hedging becomes cheaper, reinforcing demand and attracting institutional market makers.

Expand to universal insurance. Once exposure can be expressed as tradable events, the same architecture extends to any real-world uncertainty.

Homeowners hedge hurricane risk through contracts on wind speed; manufacturers insure against supply-chain disruptions; households hedge income volatility through labor-market indicators.

What emerges is a general-purpose, parametric insurance layer—transparent and market-priced, without underwriting, claims adjustment, or opaque intermediaries.

Prediction markets will not reach broad adoption as venues for speculation; they will do so as the infrastructure for transferring risk.

That is the future we are building.