Astral Codex Ten

Coinbase

41 min read

Coinbase

Article

Coinbase is a recurring organization in the Astral Codex Ten archive, appearing 10 times across 10 issues between February 08, 2021 and January 13, 2026. The archive places it in contexts such as “Instead I bought some USDC at Coinbase and tried to send them over”; “Coinbase 5%”; “You’ll try to use Coinbase to send your crypto the prediction market”. It most often appears alongside Metaculus, Kalshi, Polymarket.

Metadata

  • Category: Organizations
  • Mention count: 10
  • Issue count: 10
  • First seen: February 08, 2021
  • Last seen: January 13, 2026

Appears In

Source Context

Recovered passages from the original issue text. When the raw archive preserved outbound links inside the source passage, they are listed directly under the quote.

21
February 08, 2021 · Original source
Probably it's the second one. I tried to bet against Trump, but getting money into the market was pretty hard. You need USDCoins, a stablecoin related to Ethereum. Polymarket tries to let you buy them directly, but their app wanted me to give them a security code which never showed up, so I gave up on this. Instead I bought some USDC at Coinbase and tried to send them over. But along with the usual Ethereum gas fees, they have something called a relayer, which is supposed to collect my money and put it in my account. And it's apparently heavily backed up, and after two days my money is nowhere to be seen (though I believe them when they say that they're trying their hardest and it will probably percolate through the Ethereum network someday). Maybe everyone's having these kinds of issues and this is why the Trump contract hasn't adjusted? I'm not sure. I will keep you updated if my money ever materializes.
Inline links: when they say
21
June 22, 2021 · Original source
Will crypto sites default before 2023? Bitmex 26%, Binance 15%, Coinbase 5% Not many predictions here, so don’t take these numbers too seriously. I also don’t know what a “default” would mean in this sense - default to at least one customer, but everyone else is okay? Lose all its money to a hack?
Inline links: 26%, 15%, 5%
I’m happy to report that getting money into Polymarket has gone from impossible to merely annoying. Non-Americans can apparently do it directly with a credit card; Americans will have to send USDC, separately send Ethereum to a different address to cover transaction fees, then wait ~10 minutes for everything to percolate through. My level of crypto knowledge is “can use Coinbase” and I was able to figure it out. There’s also apparently an easier way with a Metamask wallet, which I didn’t try.
The Passage Of Polymarket
February 07, 2022 · Original source
Pessimistically, by then the crypto infrastructure, crypto social norms, and crypto user base will be so comprehensively locked into the current regulated model that this won’t be able to get off the ground. You’ll try to use Coinbase to send your crypto the prediction market, and it will warn you that this is a Non-Preferred Site that isn’t a Coinbase Partner and they’ll be informing the IRS of this transaction so don’t try anything funny. A few smart people will know ways around this, and everyone else will just suffer.
23: Room Temperature Superforecaster
August 01, 2023 · Original source
This covers literal UFOs, SETI, and Avi Loeb’s work trying to recover anomalous meteorites, plus any other way aliens might make themselves known to us in the next 27 years. SEC vs. Coinbase. I was surprised the Ripple ruling didn’t move the market more.
Inline links: Avi Loeb’s work trying to recover anomalous meteorites
SEC vs. Coinbase. I was surprised the Ripple ruling didn’t move the market more.
Congrats To Polymarket, But I Still Think They Were Mispriced
November 07, 2024 · Original source
Why not? In order for an American to use Polymarket, you have to get a VPN, a Coinbase account, and a Metamask wallet, use the VPN, get crypto on the Coinbase account, transfer it to the Metamask wallet, connect the Metamask wallet to Polymarket, and buy the shares you want. Ability to do this rules out 99% of the US population.
Links For December 2024
December 17, 2024 · Original source
30: Related: we talked before about various edge cases of cancel culture. Here’s a real-life one: crypto company Coinbase has said they’ll end their relationship with any law firm that hires lawyers who have previously opposed crypto. Is this cancel culture? My position: doesn’t cross a bright line, since it punishes action rather than speech. But if you generalize it across all ideologies and professions, you get - what was that phrase again? - “an unending chain of takfir.”
Inline links: about various edge cases of cancel culture, Coinbase has said
Bureaucracy Isn't Measured In Bureaucrats
January 09, 2025 · Original source
That’s worse! A few years ago, I debated Kevin Drum about (what I considered) a particularly egregious case where the FDA dragged its feet approving a life-saving medication. Drum argued that the FDA had behaved well. In support, he found some quotes from the doctor working on the medication, who praised all the FDA bureaucrats she had interacted with, calling them extremely helpful. This bothered me for a while, until I realized that of course it was true. In the model above, each bureaucrat processes ten forms. If the bureaucrats are benevolent, this might look like talking to the doctors, walking them through the process of figuring out their ten forms, and doing the work to add their ten forms to the FDA’s growing pile of evidence supporting the application. All of this co-exists comfortably with the insight that making doctors fill out a thousand forms before they can use a medication is an impediment to medical progress. This really sunk in for me when I read an article about the fall of Afghanistan to the Taliban in 2021. Many Afghans had collaborated with the Americans, eg as translators, in exchange for a promise of US citizenship. As the Taliban advanced, they called in the promise, begging to be allowed to flee to America before they got punished as traitors. The article focused on a heroic effort by certain immigration bureaucrats, who worked around the clock with minimal sleep for the last few weeks before Kabul fell, trying to get the citizenship forms filled in and approved for as many translators as possible. It made an impression on me because nobody was opposed to the translators getting citizenship, and the bureaucrats were themselves the people in charge of approving citizenship applications, so what exactly was forcing them to go to such desperate lengths? If you ponder this question long enough, you become enlightened about the nature of the administrative state. If you don’t, you end up like Ramaswamy, who seems to think that halving the number of bureaucrats will halve the number of forms that need to be filled out. I think in his worldview, the FDA will think “Now that we have fewer bureaucrats, it would take forever to complete our current process, so let’s simplify the process.” Maybe he is working off a thesis where red tape expands to consume the resources available to it (as measured in bureaucrats). But my impression is that the amount of red tape is determined more by things like: — How likely is it that their decision will get challenged in court? And if it gets challenged in court, what amount of paperwork do they have to show the judge to prove that they made the decision on a “reasonable basis”? For example, when I type “FDA sued” into Google, the top result is a news story from a few days ago, saying that an environmental organization sued the FDA for not listening to their earlier request to ban phthalates from food. Six years ago, the environmental groups submitted a petition (the catchily-named “Food Additive Petition 6B4815”) demanding that the FDA ban 28 phthalates. Two years ago, after consulting with industry, the FDA finally banned 23 phthalates but said that the other five were okay, releasing a 58 page decision explaining its decision. Two days ago, the environmental groups sued, saying the remaining 5 phthalates are still bad. I assume the lawsuit will nitpick the details of the the 58 page decision, trying to prove that it it didn’t violate any of hundreds of federal laws saying that bureaucratic decisions must be reasonable, bureaucratic decisions must be based on science, bureaucratic decisions must respond to the petitioners’ complaints, bureaucratic decisions cannot have disparate impacts on different races, etc. I also assume that if the FDA had banned all the phthalates, they would have faced an equally serious lawsuit from Big Phthalate saying they were unfairly crippling business. Why does it take six years to respond to a petition? My guess is because they knew they would get sued and so they have some sort of million-step process that addresses every single thing you can sue over, so that they can prove to the court that their process addresses all possible complaints and they followed it to the letter. If you cut their bureaucrats in half, that doesn’t mean there will be fewer steps in the process. It means they’ll keep wanting not to get sued, the process will stay the same, and everything will take twice as long. — What has Congress mandated that they do? For example, when I Google “Congressional FDA mandate”, I get a page on HR 7248, a bill currently making its way through Congress, which says: This bill requires the Food and Drug Administration (FDA) to establish a process that supports nonclinical testing methods for drug development that do not involve the use of animals. Specifically, the FDA must establish a pathway by which entities may apply to have nonclinical testing methods approved for use in a particular context. Qualifying methods must be intended to replace or reduce animal testing and to either improve the safety and efficacy of nonclinical testing or reduce the time to develop a drug. The FDA must issue its decision within 180 days of receiving an application. The FDA must also prioritize the review of applications for drugs that are developed using an approved nonclinical testing method. The FDA must annually post a report on its website that summarizes the results of the bill's implementation, including the number of applications received, types of methods that were approved, and the estimated number of animals saved as result of these methods. So the FDA has to establish this process and post an annual report on its website. How many bureaucrats per year does this take? Maybe five? If you halve the number of people at the FDA, you still need a constant five bureaucrats to comply with this particular law. If the bill passes, the FDA comes up with a nonclinical testing process, and someone (eg the nonclinical testing industry) doesn’t think it’s good enough, they can sue the FDA for not following the law. How good a nonclinical testing process will the FDA need in order to avoid lawsuits under this bill? I assume there is a large body of administrative law answering that question, and that it will take many bureaucrats to figure this out. Finally, I admit I’m a bit confused by this. IIRC “nonclinical testing” refers to things like testing drugs on stem cells or artificial organs instead of humans. You can obviously do this for some parts of the drug testing process, but not others; the FDA has already adjusted for this and integrated it into their guidelines to some extent. I can’t tell whether this law is a righteous attempt to correct bureaucratic foot-dragging, or a powergrab by Big Nonclinical Testing demanding that the FDA privilege their products over other forms of experiment. If the latter, the FDA may try to come up with some fake pathway that satisfies the letter of the law without really giving Big Nonclinical Testing any unfair privileges, and Big Nonclinical Testing will probably sue and say it violates this bill. How many bureaucrats do you think it will take to manage that? — How much will they get yelled at if they take too long to approve drugs, vs. if they mistakenly approve a bad drug? This is the basic determinant of all FDA drug approvals. Halving the number of FDA bureaucrats wouldn’t have literally zero effect on this balance. It would mean that approving new drugs would be delayed twice as long. This would be a little more outrageous than the current delay, and might shift an outrage-minimizing FDA director slightly in the direction of cutting rules. But solve for the equilibrium: there would still be more delay than there is now. Also, I don’t think public outrage about long drug delays is linear with regard to delay, and public outrage at bad drugs is constant and large. So I think at best, firing bureaucrats would shift this balance a small amount, and only by making everything overall worse. II. One possible objection: this assumes that the average bureaucracy is like the FDA drug approval process. But the FDA drug approval process’ job is to approve things. Maybe the average bureaucracy’s job is to ban things. Then decreasing their capacity would be good. (Vivek gets to be main example here because he tweeted, but the same considerations apply to Elon: even though the government as a whole is delaying SpaceX rocket launches, individual bureaucrats might be speeding them up through the same 1000-forms logic as in the FDA case) There’s certainly a spectrum from the most approval-focused bureaucracies to the most ban-focused bureaucracies. Thinking hard about this spectrum would be a step up from “instantly” firing 50% of all bureaucrats based on social security number. So maybe a steelman of Vivek’s point would be to fire 50% of people in the ban-focused bureaucracies (and maybe double the number of people in the approval-focused ones?) I’m still skeptical that this is how it works. The past few years have seen the cryptocurrency industry demand regulation, and the government mostly fail to step up (though crypto businesses hope the Trump administration will do better). Why do crypto businesses want to be regulated more? Because the alternative is something where it’s not clear what’s legal and anyone could be sued or shut down at any time. The chief legal officer of Coinbase, from the second link: All of us are begging for sensible standards that would allow us to get back to building great products and services and spend less time and frankly, less money, arguing over legal definitions and statutes. This isn’t because anyone specifically banned crypto. It’s because there are bans on other things (like unlicensed securities, money laundering, etc) that crypto is vaguely related to, sometimes an agency regulating these things will tell a crypto company “sorry, we think you’re illegal”, and crypto wants some specific list of things it can follow that explicitly establish it as on the right side of money-laundering and security-licensing laws. Obviously industries would prefer that these be simple and easy standards (“oh, don’t worry, you don’t have to worry about money laundering if you’re a crypto company”), but they would settle for strict regulations as long as the regulations carve out some ability for them exist at all. I’ve seen the same thing play out in another area I follow, cultured meat. There are many laws about what meat you can and cannot sell, how the animals have to be treated, what the sanitation standards are, et cetera. Some of these standards make no sense when applied to cultured meat; others, cultured meat naturally fails by default (you can’t prove you’re treating the animals in a certain way because there are no animals). Others are novel philosophical questions (can you sell cultured meat without saying it’s cultured? How big does the print need to be before it counts as saying that it’s cultured? What about on restaurant menus?) Situations like these mean that there’s no clear distinction between default-yes and default-no bureaucracies. There’s no explicit ban on crypto or cultured meat. But if you cripple bureaucracies’ ability to interact with these fields, it doesn’t mean they’re fully legal, free, and happy forever. It means they’re stuck in regulatory limbo. III. So it seems like you don’t want to fire bureaucrats, you want to cut red tape. In our toy model, you want to reduce the number of forms from 1,000 to (let’s say) 100. Then the same number of bureaucrats can get drugs approved ten times faster. In our non-toy actual model of what’s going on, this would require changing incentives. Maybe you could change judicial procedures so that fewer people sue, or the FDA needs less evidence to win any given lawsuit. This sounds hard (Vivek and Elon seem more qualified to wield chainsaws than to understand legal minutiae), possibly illegal (does the administrative branch even control how judicial procedure works?), and politically unpopular (this basically looks like telling people “f@#k you, companies can put as many phthalates as they want in food, we don’t have to prove that this decision is evidence based, and you’re not allowed to challenge us.”) Or it would require Congress to repeal legislation mandating things. These Congressional mandates are probably things that Congressmen and their constituents (either real constituents or special interests) care a lot about, so good luck getting them repealed. Also, doesn’t Congress pass like one bill per year now? This would normally make me pessimistic, but Vivek and other anti-bureaucracy activists have pointed to a recent success story: Idaho. Idaho cut their regulatory code by 38% in 2019, and since then it’s only gone down. How did they decrease red tape so fast? They did it through the power of nominative determinism. In that year, they elected a governor named Brad Little. His administration is called the Little Administration. Obviously government had to get smaller. But on a purely exoteric level, what methods did they use to pull this off? This CPAC article gives the basic story: The Little administration instituted sunset provisions that review each regulation every five years and make sure it’s justifiable.
Inline links: I debated Kevin Drum, a news story from a few days ago, a 58 page decision, have seen the cryptocurrency industry demand regulation, hope, https://substackcdn.com/image/fetch/$s_!TTSy!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb73cf3f3-e501-49b6-b2a3-b84c602d5038_481x344.webp, This CPAC article
25
February 03, 2025 · Original source
You might expect this instability to chill investment, but apparently not - this January, another funding round led by Coinbase raised an extra $30 million for the beleaguered city. They must have balls of steel!
Inline links: raised an extra $30 million
Tech PACs Are Closing In On The Almonds
October 21, 2025 · Original source
Everyone else The partisan groups have lots of money but little distortionary effect. Democratic machines try to elect Democrats, Republican machines try to elect Republicans, but they don't push their chosen candidates towards any specific position besides the ones that play well with voters. They are, so to speak, priced in. AIPAC is a single-issue PAC aimed at supporting Israel. They are orders of magnitude more effective than any comparable political organization. Their advantage stems from the nature of political donations, which come in two types. "Hard money" is money given directly to candidates; strict campaign finance limits it to $7000 per donor. "Soft money" comes from SuperPACs and can evade most campaign finance laws; it can pay for ads but can't fund candidates directly. Candidates prefer hard money to soft money, but it's harder to get; a single billionaire can provide unlimited soft money, but you need a wide donor base to acquire hard money. But not too wide! When millions of waitresses and bartenders gave Bernie Sanders $25 each, that was impressive grassroots support - but each of those $25 checks only went 1/280th as far as one person giving the $7000 max, and all of these waitresses are hard to corral and coordinate for downballot causes. AIPAC's natural constituency, (((Middle Eastern democracy supporters))), are at the exact sweet spot of moderately numerous, moderately well-off, and very committed. This gives AIPAC unparalleled access to hard money, compared to other groups that are more reliant on single billionaires or masses of poor people. But also, AIPAC fights hard. If some random Congressman is anti-Israel, AIPAC will swoop down on their race in Middle Of Nowhere, Missouri and pour $10 million into electing their opponent. By now everyone knows this, and the mere threat of AIPAC action is enough to keep most politicians in line. Everyone else includes other industry groups, labor groups, and activist cadres. Probably on aggregate these people are destroying America, but as individual organizations they're miniscule compared to the first two categories. The biggest of these is a real estate group 25-50% the size of AIPAC that nobody's ever heard of. The average PAC strategy is this: when the incumbent will obviously win, donate money to the incumbent. When there's a tight race, donate money to both sides. Why does the first prong of this strategy work? If the incumbent will definitely win, why are they selling out for more cash? Safe-seat Congressmen want more hard money for a pretty good reason: they can transfer it to other politicians or the party apparatus in exchange for goodwill that can be cashed in later for leadership positions. Safe-seat Congressmen want more soft money because . . . the consultants I talked to didn’t have a great answer here. One ventured that he had seen Democrats in D + 30 states with 0.000% chance of losing run themselves ragged raising more and more money. Just as Substack bloggers may reload their browser again and again watching the likes and restacks come in, so politicians will reload their campaign metrics panel watching the flow of donations. Any politician who’s survived long enough to matter is a little bit paranoid and will never truly accept that their safe seat is safe. These people aren't corrupt. They're not spending the money on campaign Lamborghinis. They don't even necessarily have some future campaign they're saving it for. They're just addicted to fundraising. And why does the second prong work? Why does donating to a Congressman buy their goodwill if you also donated an equal amount to their opponent? Part of the answer is the same as above: it can buy leadership positions, it can satisfy an irrational addiction to money. But another part is that politicians don’t like thinking of donations as a corrupt quid pro quo. The AIPAC strategy, where you know the PAC will fund your opponent if you don't do what they want, is something of an exception. Usually it's just - you have a random bill on toilet regulation or something in front of you. A bunch of randos want to call you and give their advice. But you see that Americans For Innovative Toilets donated $3295 during your last campaign (and maybe also gave something to your opponent, but whatever, everyone does it). This catches your attention. So you make sure to take their call first, and listen the longest. This still doesn't entirely make sense to me. But it's how all PACs (except AIPAC and the machines) operated until 2024. III. In 2024, the crypto industry raised the stakes. Let's put numbers on all of this. In that year, AIPAC raised $87 million. The real estate group that usually plays runner-up raised $20 million. Marc Andreessen’s new crypto PAC, Fairshake, raised $260 million. Just a totally unheard-of amount of money for a single industry. How did they do it? In some sense, this isn't surprising. In case you haven't heard, Bitcoin did very well. Many people in the industry got rich. A16Z, Marc Andreessen's crypto-heavy venture capital firm, says they invested $8 billion into crypto. Coinbase, the biggest US crypto company, is valued at $85 billion. The richest crypto billionaires have 10-to-11 digit net worths. And government regulation is potentially an existential threat to crypto. So in some sense, it's the least surprising thing in the world that they could scrounge up $260 million to save their multi-hundred-billion-dollar industry. The only reason it's remarkable is that, for some reason which I still haven't figured out, nobody else - not the oil industry, not the firearms industry, not the defense industry - ever tried this before. How exactly did the industry pull this together? Andreessen personally donated $40 - $50 million (remember, the second-biggest industry PAC, real estate, raised only $20 million total from all donors, personal and business). Again, this isn't a crazy proportion of his net worth: he has $2 billion, so a $50 million expense hardly forces him back to ramen. It's just that no other billionaire of his stature is even in the game. Then his cofounder Ben Horowitz donated another $40 million. Then two big crypto companies (Coinbase and Ripple, both with A16Z links) donated another $40 - 50 million each. As the saying goes, sooner or later it all adds up to real money. Anyway, they won overwhelmingly. They combined the business-as-usual strategy of donating to safe incumbents and both sides of close races, with the AIPAC strategy of picking a few big opponents of their cause and airdropping massive sums on their rivals. For example, Representative Katie Porter (D-California) was an Elizabeth Warren ally and cryptocurrency critic. When she ran for Senate, Fairshake dropped $10 million into attack ads against her in the primaries - more than most candidates' total spending. The attack ads didn't say she was bad on crypto - something that approximately no voters care about. They were just normal attack ads on whatever aspect of her policy and personality focus groups said she was most vulnerable on (in practice, an accusation that she mistreated her Congressional staff). She lost badly, coming in third place. Although nobody can prove she wouldn't have lost anyway, conventional wisdom was that crypto had successfully made its point. According to SFGate: An unnamed political operative told the magazine: “Porter was a perfect choice because she let crypto declare, ‘If you are even slightly critical of us, we won’t just kill you—we’ll kill your f—king family, we’ll end your career.’ From a political perspective, it was a masterpiece.” The scare campaign appears to have worked. The House of Representatives passed a pro-crypto bill, with bipartisan support, in May. Candidates with Fairshake’s support won their primaries in 85% of cases, the New Yorker wrote. Now, neither presidential candidate wants to run astray of the industry: Donald Trump spoke at a crypto conference, and Kamala Harris signaled her support. And Porter is forced out of Congress. These are all important signs that crypto’s bet is paying off, but I think I know what metric the crypto barons themselves are watching, and if anything it’s even more bullish: Red arrow represents the 2024 election. Crypto titans had many valid complaints. The Biden administration’s crypto regulation policy was arbitrary and punitive, and occasionally skirted the border of illegality. It genuinely harmed innovation and held back important industries like remittances, digital payments, and (of course) prediction markets. As a crypto bag-holder myself, I can’t complain about all the beautiful verdant green on the chart above. Still, winning this hard is maybe a little humiliating. Does the government really need a strategic Bitcoin reserve? Should it really release economic data on three different blockchains? Must we really have a twelve foot high golden statue of Trump holding a Bitcoin in front of the US Capitol? We’re exploring bold new territory here. Give me your degens, your risk-seeking. Your huddled masses, yearning to bet free. IV. …and we’ll be exploring it a whole lot more, very soon. Last month, the AI industry announced a new SuperPAC called “Leading The Future” (a dumb name, but, in their defense, “AIPAC” was already taken). They start with $200 million in seed funding, led by a $50 million donation by Andreessen Horowitz, and another $50 million from OpenAI co-founder Greg Brockman. (Why Brockman and not Altman, or OpenAI as a corporation? Because most people don’t know who Brockman is, so this keeps OpenAI’s hands clean. I imagine Altman going into a meeting, pointing at Brockman, and saying “I’m famous, you’re not, please cough up $50 million of your own money for the cause.”) On the same day, Meta announced their own SuperPAC, Mobilizing Economic Transformation Across (META) California. Why two PACs? Opinions differ; one person told me that it lets the general PAC avoid the negative associations that Facebook has gathered over the years, but the Verge thinks that maybe everyone else in tech hates Zuckerberg too much to work with him. Meta has committed to spending “tens of millions”. Most likely, the new PAC will use the playbook pioneered by crypto: destroy any candidate who dares support regulations on AI, by funding attack ads that don’t mention AI in any way and, at best, briefly mention the name “Leading The Future”. Just the Andreessen/Brockman SuperPAC, without any help from Meta, is already twice as rich as AIPAC. Their existence sends a clear message: we are going to crush any politician who tries to regulate AI. V. …unless someone stops them. Leading The Future still only has 2% as much money as the almond industry. The tiny scale of US political spending is dangerous insofar as it means that one or two billionaires willing to go all-in can distort the national landscape. But it also makes it possible to oppose them. Certainly if you can get one or two billionaires of your own - but it might even be within the range of a committed group of ordinary people. Not waiters and bartenders, maybe. But if safe AI supporters were as committed as Israel supporters, they could probably make something happen. For a long time, the AI safety movement has underperformed politically. Effective altruism includes thousands of well-off people committed to spending 10% of their income on improving the world. If a thousand of them gave $7K each to political candidates, that would be $7 million of campaign-finance-compliant hard money - about as much as anyone can gather for anything. Hard money buys more influence per dollar than soft money, so this could be a big deal. All you’d need is the right people to coordinate it. So far, this has been slow going. Partly it’s because in the early 2020s, people affiliated with FTX took point on this effort; when FTX imploded, it not only took its incipient political infrastructure with it, but poisoned the well for future efforts. And partly it’s because EAs overlearned the lesson of the early 2010s, when we spoke out against AI capabilities efforts so “effectively” that a bunch of people thought “wow, AI capabilities companies must be a really big deal, maybe I should found one!”; the resulting institutional scar tissue biased us towards staying quiet about our concerns. Still, I wouldn’t be writing this if the consultants and activists weren’t gearing up for a bigger fight. They asked me to include some action items for readers who want to participate: Email aisafetypolitics@gmail.com to connect to the people organizing this effort and talk with them about what you can do, including potential future donation opportunities.
Inline links: According to SFGate, https://substackcdn.com/image/fetch/$s_!bWaN!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F13d918d0-5918-4bf6-9dee-0a798c76ae82_706x499.png, strategic Bitcoin reserve?, release economic data on three different blockchains?, a twelve foot high golden statue of Trump holding a Bitcoin in front of the US Capitol?, https://substackcdn.com/image/fetch/$s_!eZlq!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faa435a03-c505-4414-8be8-4a3b76dfad12_738x612.png, announced a new SuperPAC, Mobilizing Economic Transformation Across, the Verge thinks
Mantic Monday: The Monkey's Paw Curls
January 13, 2026 · Original source
If America nation-builds Venezuela, for whatever definition of nation-build, will that work well, or backfire? Some of these are long-horizon, some are conditional, and some are hard to resolve. There are potential solutions to all these problems. But why worry about them when you can go to the moon on sports bets? Annals of The Rulescucks The new era of prediction markets has provided charming additions to the language, including “rulescuck” - someone who loses an otherwise-prescient bet based on technicalities of the resolution criteria. Resolution criteria are the small print explaining what counts as the prediction market topic “happening'“. For example, in the Khameini example above, Khameini qualifies as being “out of power” if: …he resigns, is detained, or otherwise loses his position or is prevented from fulfilling his duties as Supreme Leader of Iran within this market's timeframe. The primary resolution source for this market will be a consensus of credible reporting. You can imagine ways this definition departs from an exact common-sensical concept of “out of power” - for example, if Khameini gets stuck in an elevator for half an hour and misses a key meeting, does this count as him being “prevented from fulfilling his duties”? With thousands of markets getting resolved per month, chances are high that at least one will hinge upon one of these edge cases. Kalshi resolves markets by having a staff member with good judgment decide whether or not the situation satisfies the resolution criteria. Polymarket resolves markets by . . . oh man, how long do you have? There’s a cryptocurrency called UMA. UMA owners can stake it to vote on Polymarket resolutions in an associated contract called the UMA Oracle. Voters on the losing side get their cryptocurrency confiscated and given to the winners. This creates a Keynesian beauty contest, ie a situation where everyone tries to vote for the winning side. The most natural Schelling point is the side which is actually correct. If someone tries to attack the oracle by buying lots of UMA and voting for the wrong side, this incentivizes bystanders to come in and defend the oracle by voting for the right side, since (conditional on there being common knowledge that everyone will do this) that means they get free money at the attackers’ expense. But also, the UMA currency goes up in value if people trust the oracle and plan to use it more often, and it goes down if people think the oracle is useless and may soon get replaced by other systems. So regardless of their other incentives, everyone who owns the currency has an incentive to vote for the true answer so that people keep trusting the oracle. This system works most of the time, but tends towards so-called “oracle drama” where seemingly prosaic resolutions might lie at the end of a thrilling story of attacks, counterattacks, and escalations. Here are some of the most interesting alleged rulescuckings of 2026: Mr Ozi: Will Zelensky wear a suit? Ivan Cryptoslav calls this “the most infamous example in Polymarket history”. Ukraine’s president dresses mostly in military fatigues, vowing never to wear a suit until the war is over. As his sartorial notoriety spread, Polymarket traders bet over $100 million on the question of whether he would crack in any given month. At the Pope’s funeral, Zelensky showed up in a respectful-looking jacket which might or might not count. Most media organizations refused to describe it as a “suit”, so the decentralized oracle ruled against. But over the next few months, Zelensky continued to straddle the border of suithood, and the media eventually started using the word “suit” in their articles. This presented a quandary for the oracle, which was supposed to respect both the precedent of its past rulings, and the consensus of media organizations. Voters switched sides several times until finally settling on NO; true suit believers were unsatisfied with this decision. For what it’s worth, the Twitter menswear guy told Wired that “It meets the technical definition, [but] I would also recognize that most people would not think of that as a suit.” Domer: Will Ukraine agree to the US mineral deal? AFAICT, this is the only case where the oracle genuinely broke down (as opposed to a legitimate disagreement). In February, it looked like both America and Ukraine had agreed to a mineral deal, but the oracle considered the question and decided this didn’t count as a full agreement (and indeed, the apparent agreement then fell apart). In March, a cabal of YES holders tried again. They waited for a time when all Polymarket employees would be out of the office, and when not too many people would be voting on the decentralized resolution oracle, then spammed it with calls to resolve to YES based on an argument that the February agreement had qualified after all. The YES holders and not-particularly-plugged-in oracle voters pushed the vote towards YES. Then, with two minutes to spare, a Polymarket employee showed up and said that Polymarket’s opinion was that it should be NO. This was technically framed as a recommendation to oracle voters, but it is so effective in establishing the Schelling point that it’s practically always followed. However, in this case, there were only two minutes left, which wasn’t enough time for the voters to change their mind. Seeing that the resolution was trending towards yes, the Polymarket representatives, not wanting to break their streak of always establishing the Schelling point, changed their own opinion to YES, and the final vote was YES 99%. Domer: How many people watched the Oscars on 3/5/25?: Kalshi’s resolution criteria for this market said they would resolve it when a major news source published Oscar viewership numbers. A few minutes after the Oscars, NYT published preliminary viewership numbers, without any caveats saying they were preliminary. The next day, they published another article saying that actually, the real viewership numbers were higher. Kalshi decided that the letter of the resolution criteria was met when NYT published its first article, and that NYT changing its opinion didn’t imply that Kalshi should change the resolution. Traders who bet on the later (ie correct) numbers were unsatisfied with this decision. NYPost: Will America invade Venezuela? On January 3, the US bombed Venezuela, sent in a Special Forces team that successfully captured President Maduro, and announced that they would thenceforward “run the country” (a claim they later walked back). Does this qualify as an “invasion”? Polymarket’s resolution criteria defined “invasion” as “a military offensive intended to establish control over any portion of Venezuela”. It didn’t seem like the US was trying to establish control over Venezuelan territory, exactly, so they resolved NO. Traders who bet on YES were unsatisfied with this decision. With one exception, these aren’t outright oracle failures. They’re honest cases of ambiguous rules. Most of the links end with pleas for Polymarket to get better at clarifying rules. My perspective is that the few times I’ve talked to Polymarket people, I’ve begged them to implement various cool features, and they’ve always said “Nope, sorry, too busy figuring out ways to make rules clearer”. Prediction market people obsess over maximally finicky resolution criteria, but somehow it’s never enough - you just can’t specify every possible state of the world beforehand. The most interesting proposal I’ve seen in this space is to make LLMs do it; you can train them on good rulesets, and they’re tolerant enough of tedium to print out pages and pages of every possible edge case without going crazy. It’ll be fun the first time one of them hallucinates, though. …And Miscellaneous N’er-Do-Wells I include this section under protest. The media likes engaging with prediction markets through dramatic stories about insider trading and market manipulation. This is as useful as engaging with Waymo through stories about cats being run over. It doesn’t matter whether you can find one lurid example of something going wrong. What matters is the base rates, the consequences, and the alternatives. Polymarket resolves about a thousand markets a month, and Kalshi closer to five thousand. It’s no surprise that a few go wrong; it’s even less surprise that there are false accusations of a few going wrong. Still, I would be remiss to not mention this at all, so here are some of the more interesting stories: Fhantombets: Who will win the 2025 Nobel Peace Prize? Twelve hours before the announcement, someone placed a large Polymarket bet on Venezuelan opposition leader Maria Corina Machado, bringing her probability from 4% to 73%. When Machado later won, observers suspected insider trading. But an account named fhantombets claims to have interviewed the winning trader; although he did not reveal his exact strategy, the interview better matches a story where he was good at navigating WordPress directories, and found that the Nobel team put a draft of the announcement up early in a nonpublic part of their WordPress site. He won about $70,000. LuishXYZ: Will the Russians capture Myrnohrad? This is a small town in Ukraine that the Russians obviously were not going to capture; the Polymarket price trended toward zero. The resolution criteria named maps by the well-regarded Institute For The Study of War as canon. A few hours before resolution, ISW updated their maps to show the the town captured by Russia, which was definitely false. Polymarket resolved to YES, and the fictional Russian advance disappeared. The Institute then issued a statement saying the map update was “unapproved”, and fired one of its staffers who had presumably been involved. The cheater’s exact winnings are unknown, but based on the size of the market are probably mid-6-digits. TechCrunch: What words will be used in Coinbase’s earnings call? Coinbase CEO Brian Armstrong delivered the company’s “earnings call”, ie a speech to investors about its recent progress. At the end, he said “I've been tracking the prediction market about what Coinbase will say on their next earnings call, and I just want to add here the words Bitcoin, Ethereum, Blockchain, Staking, and Web3 to make sure we get those in before the end of the call”. Armstrong is worth $10 billion and doesn’t need to manipulate a $50,000 market for the money - he later described his comments as “trolling”. Other crypto executives condemned the move, with one saying that “you need your head examined if you think it’s cute or clever or savvy that the CEO of the biggest company in this industry openly manipulated a market.” I might need my head examined, because I think it’s at least kind of funny. Forbes: Who will rank highest on Google Search volume this year? A trader called AlphaRaccoon got 22/23 of these Polymarket questions right, and has a history of implausibly good performance on Google-related questions. They basically have to be a Google insider, but (since all of this is done through crypto) nobody has a good way to figure out who. They made $1 million. NPR: Will Maduro be captured? Just before the secret operation that captured Maduro, someone placed a mysterious $32,000 wager on YES. Was this insider trading by someone in the administration or military? Nobody knows, since the profits go to an anonymous crypto wallet. But the article mentions that the crypto wallet appears to be cashing out through regulated KYC-compliant US exchanges, which suggests they’re not very worried about their identity getting discovered. Maybe they just got lucky after all. AlanMCole: How long will Karoline Leavitt speak at the White House briefing? Karoline Leavitt is Trump’s press secretary. On January 7, she held an ordinary press briefing. Kalshi had its usual market about how long the briefing would last, divided into bins of greater than vs. less than 65 minutes. At the 64:24 mark, Leavitt ended the conference in what appeared to be a sudden manner, and the “less than 65 minutes” bin shot from 2% to 100%. A viral tweet convinced many people that Leavitt must have been insider trading, but Cole counterargued that Leavitt could only have won about $4,000 from the market, which probably isn’t enough to risk one’s job as White House Press Secretary. Sometimes people just end press conferences at weird times. Cole concluded: Now, some opinions and generalizations, as someone who looks at prediction markets plenty (I’ll probably write something about my own experience with them at some point.) 1. This market, like many of them, is pretty stupid. I like substantive markets; this isn’t substantive. 2. The major prediction markets have a wildly undisciplined comms strategy where any attention is good attention, and they love implying all sorts of crazy wild west stuff is going on to get attention. 3. People do bet on things potentially subject to manipulation or insider trading. But usually the markets like that (such as duration of press conference, or stupid “what will be mentioned” markets) are small, especially relative to the wealth of key decisionmakers. 4. Losers in markets are huge whiners, and the more frivolous and tiny their bets, the more likely they are to whine. Sometimes in sports it’s pretty egregious. They’ll get mad at a team for running out the clock when ahead but under some spread they bet on. 5. Lower-quality financial news often doesn’t pay much attention to quantity. (For example, dumb stories about how a decisionmaker has a conflict of interest because they’re invested in an index fund which is 3 percent comprised of some company.) 6. Given the platforms’ undisciplined social media strategy of “promote prediction market chatter no matter what kind of chatter it is,” I don’t think this tweet rises even to the status of “lower-quality financial news.” Kalshi’s team, whatever their faults, are extraordinarily efficient at getting batched approvals of many near-identical markets with slight parameter variation; I’ve seen Tarek speak about this on Odd Lots. The result is they’ve got TONS of them, for better or worse. You’re gonna see 1-in-100 upsets on tiny Kalshi markets for as long as this regulatory equilibrium holds, even if nothing unusual is going on, simply because they’re publishing hundreds (thousands?) of markets per day. There’s a saying that you can’t con an honest man. This isn’t exactly true. But it’s easier to con people who are playing in a “what words will Brian Armstrong say today” market than people who are trying to do something useful, and I have trouble feeling sorry for these people when Brian Armstrong says silly words. Conditional Markets: A Modest Proposal Conditional markets (“decision markets”) are the strongest case for prediction markets potentially being revolutionary. The idea is - you may want to base a decision (like which candidate to elect) on an outcome (like how they’ll affect the economy). So you make two markets: If the Democrat gets elected, will the economy be good four years later?
Inline links: UMA Oracle, Keynesian beauty contest, Will Zelensky wear a suit?, calls this, told Wired, Will Ukraine agree to the US mineral deal?, How many people watched the Oscars on 3/5/25?, another article, Will America invade Venezuela?, stories about cats, Who will win the 2025 Nobel Peace Prize?, claims, Will the Russians capture Myrnohrad?, a statement, What words will be used in Coinbase’s earnings call?, described, Who will rank highest on Google Search volume this year?, Will Maduro be captured?, How long will Karoline Leavitt speak at the White House briefing?