Prediction market roundtable: CLOBs let market makers profit, AMMs lose them money
devanshmehta · x · 2026-11-05
A recap of a prediction markets liquidity roundtable tackling two questions: do market makers earn money providing liquidity, and how elastic should outcome prices be relative to volume?
- CLOB vs AMM: market makers at the table said CLOBs are endogenously profitable if there's volume, needing platform subsidies only in long-tail, thin markets. AMMs offer great UX but market makers uniformly lose money on them — better suited to "information finance" where seekers pay liquidity for signal than to regular prediction markets.
- AI angle: an earlier session's thesis held that trading may be one of the few jobs safe from AI — the "Claude go make me money" meme probably won't happen — and displaced experts may become traders, spawning novel markets (hiring outcomes, OS repo valuations, date outcomes).
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