WEBVTT - Taking Bets on the Future 0:00:15.316 --> 0:00:22.676 Pushkin. I could turn on the news right now and 0:00:22.796 --> 0:00:26.076 find someone making a prediction about the future. They might 0:00:26.116 --> 0:00:28.436 be saying there's no way Congress is going to pass 0:00:28.516 --> 0:00:31.236 some particular bill by the end of the year, or 0:00:31.516 --> 0:00:34.476 maybe they'd be dead certain that the US economy is 0:00:34.516 --> 0:00:37.716 about to start shrinking, And you know, I could try 0:00:37.756 --> 0:00:41.196 to parse the logic and assess the evidence behind the arguments. 0:00:41.236 --> 0:00:43.956 I could try to figure out whether these forecasters have 0:00:44.036 --> 0:00:47.716 some ulterior motive. But I mean, come on, I don't 0:00:47.716 --> 0:00:50.476 have time to do a research project on every claim 0:00:50.596 --> 0:00:53.476 some pseudo expert makes in the news. What I want 0:00:53.596 --> 0:00:57.796 is some source that will aggregate all these different predictions 0:00:57.836 --> 0:01:00.316 about the future. I'd like it if this source could 0:01:00.316 --> 0:01:03.836 give more weight to people who have higher conviction about 0:01:03.876 --> 0:01:08.396 their views. And ideally this source would force the people 0:01:08.476 --> 0:01:11.316 making prediction to put something on the line, to put 0:01:11.396 --> 0:01:14.156 some skin in the game. I want the people predicting 0:01:14.196 --> 0:01:17.076 the future to gain if they're right and lose if 0:01:17.076 --> 0:01:23.756 they're wrong. I'm Jacob Goldstein, and this is What's Your Problem, 0:01:23.836 --> 0:01:26.676 the show where entrepreneurs and engineers talk about how they're 0:01:26.716 --> 0:01:29.476 going to change the world once they solve a few problems. 0:01:29.876 --> 0:01:33.756 My guest today is Luana Lopez Laura, co founder of 0:01:33.876 --> 0:01:38.556 Calshe dot com. Alshi dot com. You gotta spell it 0:01:38.676 --> 0:01:42.436 every time I do. It's a hard name. Calshe is 0:01:42.476 --> 0:01:45.716 an exchange kind of like a stock exchange, but when 0:01:45.796 --> 0:01:48.716 people use Calhee, they don't make bets on stocks. They 0:01:48.756 --> 0:01:51.196 make bets on what's going to happen in the world, 0:01:51.676 --> 0:01:54.396 everything from what bills Congress is going to pass to 0:01:54.636 --> 0:01:58.516 what's going to happen with inflation. Calshe's problem, Luana's problem 0:01:58.756 --> 0:02:01.556 is this, how do you become the New York Stock 0:02:01.596 --> 0:02:07.156 Exchange of real world events. It turns out that in 0:02:07.196 --> 0:02:09.876 the United States, if you want to let people bet 0:02:09.916 --> 0:02:13.036 on real world events that are not sports, you have 0:02:13.076 --> 0:02:17.676 to get the approval of US financial regulators. Last year, 0:02:17.996 --> 0:02:22.036 cal She became the first major prediction market to get 0:02:22.076 --> 0:02:25.316 that approval. Their site went live and started taking bets 0:02:25.316 --> 0:02:28.916 from ordinary people. Last summer, Louno, inter co founder, went 0:02:28.956 --> 0:02:32.956 to MIT and in the summers they did internships on 0:02:32.996 --> 0:02:36.116 Wall Street trading desks. That was where they got the 0:02:36.196 --> 0:02:39.116 idea for calsh But it wasn't what the traders did 0:02:39.156 --> 0:02:41.756 for work that inspired them. It was what they did 0:02:41.796 --> 0:02:46.396 for fun. Constantly placing these tradeable bets with each other 0:02:46.516 --> 0:02:49.196 on everything that was happening in the news. They called 0:02:49.196 --> 0:02:51.676 it the market maker game. So we used to do 0:02:51.716 --> 0:02:54.836 that like all day and the jobs video like just 0:02:54.876 --> 0:02:57.396 turned around. Then you make a market on this news 0:02:57.436 --> 0:03:01.316 going up on the TV, and and it was pretty 0:03:01.356 --> 0:03:02.916 much the whole day. Because it's a lot of like 0:03:02.996 --> 0:03:05.116 just trading stocks, this kind of behaves the same way, 0:03:05.196 --> 0:03:06.836 right if it gets low and you want to buy 0:03:06.916 --> 0:03:09.756 low sell high, you think there's a fair value. And 0:03:09.836 --> 0:03:11.756 we did that all the time. So how did that 0:03:12.236 --> 0:03:15.796 lead you to start the company? Right, So this is 0:03:15.836 --> 0:03:17.436 one part of it. I think the other part that 0:03:17.556 --> 0:03:21.556 was pointing us more into this prediction market route was 0:03:21.596 --> 0:03:25.356 really that through our trading experience and fro our Finest experience, 0:03:25.356 --> 0:03:28.076 we really realized that most trading is just based on events. 0:03:28.516 --> 0:03:31.396 I think the best one example of this is, for example, Brexit. 0:03:31.556 --> 0:03:33.516 Right like when my co founder was a Goldman, a 0:03:33.516 --> 0:03:37.396 lot of different firms were calling up like his exotics 0:03:37.396 --> 0:03:39.156 trading desk a Goldman and being like, I want to 0:03:39.156 --> 0:03:41.596 get exposure to Brexit. So they would come up with 0:03:41.636 --> 0:03:45.636 this very complicated type of bundles of like volatility swaps, 0:03:45.636 --> 0:03:48.436 effects and things like that. So it's basically investors are like, well, 0:03:48.436 --> 0:03:50.596 I think Brexit will affect the market in a bunch 0:03:50.636 --> 0:03:52.636 of different ways, and I want to either make a 0:03:52.636 --> 0:03:55.596 bet or hedge some risk that I have. But there 0:03:55.676 --> 0:03:58.316 was no way you could just say give me money 0:03:58.356 --> 0:04:00.436 if Brexit happens, or I will give you money if 0:04:00.476 --> 0:04:02.796 Brexit happens. You couldn't just bet on the event. No, 0:04:03.596 --> 0:04:06.956 and yeah, And for us, when we saw this like 0:04:07.076 --> 0:04:11.756 repeated in many different experiences and coupled with like how 0:04:11.836 --> 0:04:13.796 much we saw people just like to trade on things, 0:04:14.476 --> 0:04:16.836 it was just nagging on our head. Why is there 0:04:16.836 --> 0:04:19.716 no direct way that people can just trade on what 0:04:19.756 --> 0:04:21.956 they think is going to happen, trade directly on events 0:04:21.956 --> 0:04:25.396 to get direct exposure. So we decided to that if 0:04:25.436 --> 0:04:27.196 someone was going to do it, it it should be us, 0:04:27.236 --> 0:04:29.876 and we embarked on this crazy journey for the past 0:04:29.876 --> 0:04:31.356 three years and a half. But that was kind of 0:04:31.356 --> 0:04:33.756 the start. If the question is why doesn't a market 0:04:33.796 --> 0:04:35.676 like this exists, Why isn't there a place where people 0:04:35.676 --> 0:04:38.556 can just bet on events happening or not happening. What 0:04:38.716 --> 0:04:42.276 was the answer why didn't it exist? The answers planning 0:04:42.316 --> 0:04:46.756 clears was regulation. Basically, the background is events are deemed 0:04:46.756 --> 0:04:51.316 as commodities and commodity derivatives trading are regulated by the CFTC, 0:04:51.436 --> 0:04:54.236 which is a Commodity Future Trading Commission, a US regulatory 0:04:54.276 --> 0:04:57.996 agency that never sees things like what oil futures and 0:04:58.116 --> 0:05:00.596 wheat futures and lots of things like that right now, 0:05:01.236 --> 0:05:05.196 giant markets, right yeah, So huge big regulator, big market, 0:05:05.236 --> 0:05:07.956 and it clearly falls under their jurisdiction. So you decide 0:05:07.996 --> 0:05:10.756 you want to do this, You realize that you have 0:05:10.796 --> 0:05:13.156 to get the approval of this big US regulator, the 0:05:13.236 --> 0:05:17.236 commadi's Futures Trading Commission, yep, and then you just go 0:05:17.276 --> 0:05:19.716 to them and say, can we do it? No, not 0:05:19.756 --> 0:05:22.756 at all. I said my background before, but I'm a 0:05:22.756 --> 0:05:25.196 computer sciences I have nothing to do with I don't 0:05:25.196 --> 0:05:27.636 know anything about the law. But we knew regulation was 0:05:27.636 --> 0:05:29.236 a big thing, and we also knew we didn't know 0:05:29.236 --> 0:05:31.276 anything about it. So the first day of what we 0:05:31.316 --> 0:05:33.596 did is we just created a spreadsheet of like sixty 0:05:33.676 --> 0:05:35.996 names of possible lawyers that we could call. You knew 0:05:36.036 --> 0:05:38.276 you needed a lawyer, We knew I needed a lawyer. 0:05:39.636 --> 0:05:41.996 So we went like one by one and really like 0:05:42.036 --> 0:05:44.196 everyone was saying no, it's not even worth your time, 0:05:44.276 --> 0:05:46.436 like you need ant same amount of money, and they're 0:05:46.436 --> 0:05:48.396 gonna say no, Like they're gonna say no, They're gonna 0:05:48.436 --> 0:05:49.876 say no, They're gonna say no, they're gonna say now. 0:05:49.956 --> 0:05:51.676 So you're calling all these lawyers on the list and 0:05:51.716 --> 0:05:54.676 people are like, don't bother. Bad idea, not gonna work. 0:05:54.676 --> 0:05:57.756 And then what happens, right, And then I had a 0:05:57.796 --> 0:06:00.396 friend who went actually to Harvard Law school, and then 0:06:00.436 --> 0:06:02.276 she had another friend who had a friend who had 0:06:02.276 --> 0:06:05.516 a friend and then like for fourth degree connection, we 0:06:05.556 --> 0:06:08.396 got connected to this law firm in New York and 0:06:08.436 --> 0:06:11.196 then that law for New those lawyer that works with 0:06:11.276 --> 0:06:13.156 us too today. His name is Jeff Ben. Then he 0:06:13.196 --> 0:06:17.876 was an x XCFTC official. Okay, and he said maybe 0:06:17.996 --> 0:06:19.996 let's think about it, and we're like, look, we're gonna 0:06:19.996 --> 0:06:22.036 take anything we can get it and maybe it's better 0:06:22.036 --> 0:06:25.396 than know. And then it's just a huge long engagement 0:06:25.436 --> 0:06:28.156 of like present to them, you send certain materials, They 0:06:28.156 --> 0:06:30.516 give a lot of feedback on what they think is bad, 0:06:30.516 --> 0:06:33.596 which is always massive list, and then you go back 0:06:33.636 --> 0:06:36.196 to them and they are like, okay, these ones maybe 0:06:36.236 --> 0:06:38.556 and then like this one's was still concerned about this 0:06:38.636 --> 0:06:40.516 and now we have all these other concerns. How long 0:06:40.516 --> 0:06:42.716 did you think it was gonna take when you started, Um, 0:06:42.956 --> 0:06:45.956 we initially very very optimistic and thought it was gonna 0:06:45.996 --> 0:06:49.676 take around six months. And then and it was four months. 0:06:49.716 --> 0:06:51.836 We were like, we were crazy to think it six months. 0:06:51.836 --> 0:06:54.076 It's probably like a year. And then it's nine months. 0:06:54.116 --> 0:06:56.156 We're like okay, and many mum, a year and a half. 0:06:56.196 --> 0:06:58.716 And they kept going, and I remember when it passed 0:06:58.716 --> 0:07:01.556 through the two year mark, we were like, what are 0:07:01.596 --> 0:07:04.436 we doing? Like we just you know, graduated from my team. 0:07:04.476 --> 0:07:06.596 We should like be making some money, have a job, 0:07:06.636 --> 0:07:09.276 and we're just here, like, you know, fighting through this 0:07:09.356 --> 0:07:12.516 thing and like nothing launched, no contract traded, nothing. If 0:07:12.556 --> 0:07:14.236 I told you from the beginning, we knew what was 0:07:14.276 --> 0:07:16.076 going to happen, and we knew it was gonna work, 0:07:16.116 --> 0:07:17.916 and it would take this amount of time that'll be 0:07:17.956 --> 0:07:20.436 a lot. We knew. We didn't know anything, honestly. So 0:07:20.596 --> 0:07:22.436 is part of the case you have to make to 0:07:22.476 --> 0:07:26.356 the CFTC why your exchange is useful and not just 0:07:26.436 --> 0:07:29.676 a casino? Yeah, so what is that case? Simply, what's 0:07:29.676 --> 0:07:33.836 the simple version of why calcy is useful. Well, there 0:07:33.836 --> 0:07:36.756 are people have a lot of risks that they don't 0:07:36.756 --> 0:07:41.596 have access to hedging for nowadays, Like normal people cannot 0:07:41.596 --> 0:07:44.636 hedge mortgage rates going up or things like gas prices 0:07:44.876 --> 0:07:47.036 or things like taxes going up. And these are real 0:07:47.156 --> 0:07:51.316 risks a normal everyday American face, and it's the job 0:07:51.356 --> 0:07:54.116 of the CFTC to regulate the way for them to 0:07:54.356 --> 0:07:56.436 also get access to this hedging things that the big 0:07:56.476 --> 0:08:00.836 guys can do. I will say, it's not clear to 0:08:00.876 --> 0:08:05.756 me that regular people would on average be able to 0:08:05.796 --> 0:08:08.636 hedge in a useful way using prediction markets. I feel like, 0:08:09.396 --> 0:08:13.676 to me, what seems like a more interesting possible case 0:08:13.716 --> 0:08:17.596 for the utility of Kelshe is sort of a wisdom 0:08:17.596 --> 0:08:21.396 of crowds idea, right, like the idea that people go 0:08:21.436 --> 0:08:23.956 on the news or whatever and say things about the future, 0:08:24.116 --> 0:08:26.556 but like they might be lying, they might be wrong, 0:08:26.636 --> 0:08:28.516 They might be saying something because they have an investment 0:08:28.516 --> 0:08:30.676 they're not telling you about. But when people are betting 0:08:30.676 --> 0:08:32.956 their own money on something that's going to happen in 0:08:32.956 --> 0:08:34.916 the future, I am more inclined to believe them. Right. So, 0:08:34.956 --> 0:08:37.636 if there's a big, well functioning market where lots of 0:08:37.636 --> 0:08:39.636 people are betting lots of money on something that's going 0:08:39.636 --> 0:08:43.476 to happen in the future. That seems like useful information. Absolutely, 0:08:43.556 --> 0:08:46.116 we call this like the tax on bullshit, right, It's yeah, 0:08:46.156 --> 0:08:49.076 it's so cheap to just go on Twitter and look 0:08:49.076 --> 0:08:51.956 at inflation. Right last year everyone is like, oh inflation, 0:08:52.036 --> 0:08:54.876 it's nothing. Oh we're going to see hyperinflation. And if 0:08:54.916 --> 0:08:56.716 you just have a market where people can put money 0:08:56.756 --> 0:08:59.396 where their mouth is and actually be like, I actually 0:08:59.396 --> 0:09:01.716 bought this position, this is what I believe in, you 0:09:01.796 --> 0:09:04.156 really take out a lot of like the bullshit, a 0:09:04.156 --> 0:09:07.076 lot of the you know, just exaggeration for like hype 0:09:07.076 --> 0:09:08.876 and things like that. So let's actually look at it. 0:09:09.476 --> 0:09:11.916 Signed up for Kelsey a couple days ago and I 0:09:11.916 --> 0:09:14.276 put one hundred bucks in my account, and I want 0:09:14.316 --> 0:09:16.396 to I want to make a bet. I'm not supposed 0:09:16.396 --> 0:09:17.636 to call it a bet, right, What am I supposed 0:09:17.636 --> 0:09:19.636 to call it a prediction? To take a position? Yeah, 0:09:19.636 --> 0:09:21.996 I trade the prediction anything. You want to call it 0:09:21.996 --> 0:09:23.836 a tanne. It feels like a bet to me, I'm 0:09:23.836 --> 0:09:26.836 gonna call it a bet. Um. So okay, So I'm 0:09:26.876 --> 0:09:30.276 looking now, So it looks like there's a lot there's 0:09:30.276 --> 0:09:32.476 a lot of econ stuff, like you'd expect what's going 0:09:32.556 --> 0:09:36.676 to happen with fed interest rates? What's gonna happen with inflation? Weather? 0:09:36.956 --> 0:09:39.756 The weather in New York, the weather in Chicago. It's 0:09:39.796 --> 0:09:42.996 like the weather tomorrow, right. Yeah? There are some some 0:09:43.156 --> 0:09:45.956 of our users like a crazy satellite data to trade 0:09:45.956 --> 0:09:50.556 on these markets. Interesting yea? And how big are they? 0:09:50.556 --> 0:09:52.516 I'm seeing numbers here, but it's hard to know exactly 0:09:52.516 --> 0:09:55.916 what they mean. Like how much money are people betting here? Um, 0:09:55.956 --> 0:09:58.596 I think we're doing around like more than two million 0:09:58.716 --> 0:10:01.236 dollars a week. I think two point five million dollars 0:10:01.236 --> 0:10:03.356 a week. By the way, what's is there a limit 0:10:03.396 --> 0:10:08.596 on how much people can bet or invest or steak? Yeah? 0:10:08.676 --> 0:10:11.116 Right now, we have a twenty five thousand dollars limit 0:10:11.156 --> 0:10:13.156 on how much you can lose, so not in how 0:10:13.236 --> 0:10:14.836 much you can win. So you can win up to 0:10:14.916 --> 0:10:17.116 I guess two point five million if you get the 0:10:17.676 --> 0:10:20.516 one percent long shot, but you can lose up only 0:10:20.596 --> 0:10:23.196 up until twenty five k at the moment. Okay, why 0:10:23.196 --> 0:10:26.116 why that limit? Did that come from the CFTC. No, 0:10:26.316 --> 0:10:29.276 that's actually came from us. We wanted to, you know, 0:10:30.156 --> 0:10:32.476 start slow and make sure we're not breaking things. I 0:10:32.476 --> 0:10:34.316 think we worked very hard on the regulatory piece, so 0:10:34.356 --> 0:10:36.516 we want to make sure we keep everything going the 0:10:36.596 --> 0:10:39.956 right way, slow and don't break Facebook zactly. We are. 0:10:40.276 --> 0:10:43.356 We are the anti Facebook for sure. So we started 0:10:43.396 --> 0:10:45.796 this way. I think that we are going to have 0:10:45.836 --> 0:10:48.556 to raise the limits going forward, especially as we grow 0:10:48.716 --> 0:10:51.476 to bigger players and bigger institutions. We're here, so let's 0:10:51.516 --> 0:10:55.636 pick one. Um, So here's one permanent daylight saving time 0:10:55.636 --> 0:10:59.596 bill becomes law. Yep uh. It's a fun one, like 0:10:59.956 --> 0:11:02.076 I kind of care about it. It's a little bit silly, 0:11:02.236 --> 0:11:03.716 like I want to I want to bet on that one. 0:11:03.716 --> 0:11:04.956 I want to take a position on that one. Okay, 0:11:04.956 --> 0:11:06.556 So I'm going to click on it, and it says 0:11:07.556 --> 0:11:11.476 and it's by the end of the year. Basically, it 0:11:11.596 --> 0:11:17.116 says buy yes sixteen cents, buy no eighty seven cents. 0:11:17.476 --> 0:11:20.396 So what does that mean? That means right now you 0:11:20.436 --> 0:11:23.356 can buy a yes position for you said sixteen cents, Yeah, 0:11:23.396 --> 0:11:26.156 sixteen cents, So you would walk in sixty cents to 0:11:26.196 --> 0:11:28.516 be able to get eighty four. So if you're if 0:11:28.516 --> 0:11:31.276 you buy a yes, you're you're locking in sixteen to 0:11:31.356 --> 0:11:34.116 get eighty four. If you're right. Okay, great. So so 0:11:34.196 --> 0:11:37.276 it's like, uh, what is that five to one or so? 0:11:37.476 --> 0:11:39.796 I think so around that yeah, math on a math 0:11:39.796 --> 0:11:44.596 on a podcast, and so just I mean the context 0:11:44.636 --> 0:11:46.956 on this one. The Senate passed a bill earlier this 0:11:47.036 --> 0:11:49.076 year that would make daylight saving time permanent, and now 0:11:49.076 --> 0:11:51.116 it's kind of stalled out, and so the market is 0:11:51.116 --> 0:11:53.516 clearly saying this is probably not going to happen. Yep. 0:11:54.036 --> 0:11:55.836 But it's not like it's not one hundred to one 0:11:55.876 --> 0:11:58.636 shot that it won't happen. It could happen, right, And 0:11:59.076 --> 0:12:00.996 I mean I want kind of a long shot, right, 0:12:00.996 --> 0:12:03.236 I don't want to win ten bucks? Who cares? Right? 0:12:03.596 --> 0:12:05.676 And the fact that it says buy yes or sixteen, 0:12:05.716 --> 0:12:07.676 does that mean someone is offering to sell it for 0:12:07.756 --> 0:12:11.076 that price some other market participant. Yeah, someone's willing to 0:12:11.076 --> 0:12:13.356 buy the note for eighty four. Okay, so that's why 0:12:13.356 --> 0:12:15.476 you can buy the yes for sixteen. And it's Calci 0:12:16.116 --> 0:12:19.236 in the middle on this. Are you just taking a fee? No, 0:12:19.516 --> 0:12:21.836 we are in exchange, so we just match people on 0:12:22.196 --> 0:12:23.916 both sides. So we just matched the yes in the No. 0:12:24.476 --> 0:12:25.996 Let me take a small fee. So okay, so I'm 0:12:25.996 --> 0:12:27.836 gonna beat one hundred bucks right now, I'm just gonna 0:12:27.876 --> 0:12:30.036 do it. I'm gonna wild own. This is big for me. 0:12:30.076 --> 0:12:32.236 I'm not much of a much of a gambler trading 0:12:32.236 --> 0:12:34.596 for contract amount, okay. So I just type one hundred 0:12:34.596 --> 0:12:38.036 bucks one hundred okay, So for my hundred bucks, if 0:12:38.036 --> 0:12:41.316 I'm right, I'm gonna win four hundred and fifty five dollars. So, 0:12:42.556 --> 0:12:44.756 so it says fees five dollars and fifty one cents. 0:12:44.796 --> 0:12:47.876 It's about five percent, is what you're taking on this trade? Yes? Yeah, 0:12:47.876 --> 0:12:49.876 that's why we take a calci. Okay, and what are 0:12:49.916 --> 0:12:53.636 your fees? Just on average on average reaction at point 0:12:53.636 --> 0:12:57.516 eight percent? Wow? So I got hose. Yeah, because you 0:12:57.596 --> 0:13:01.236 were taking a position you actually paid. So so when 0:13:01.236 --> 0:13:02.996 I sell, when I get out, I don't have to pay. 0:13:03.036 --> 0:13:05.316 You won't pay anything. Okay, Well that's right. So it 0:13:05.676 --> 0:13:07.716 takes the sting off a little. Right If if you're 0:13:07.756 --> 0:13:09.836 building limit orders, if you say adding up price or 0:13:09.836 --> 0:13:11.396 saying I want to buy or I want to sell 0:13:11.436 --> 0:13:13.996 out this price, you pay no fee. So oh interesting, Okay, 0:13:13.996 --> 0:13:17.236 because I'm bringing liquidity to the market, okay, Okay, I'm 0:13:17.236 --> 0:13:21.036 submitting the order. Okay, So now I own it. Yeah, 0:13:21.036 --> 0:13:24.876 that's it. Now. The thing that's interesting to me is 0:13:25.076 --> 0:13:27.836 I don't have to wait and see if this thing happens, right, 0:13:27.876 --> 0:13:32.316 I can sell to somebody else who wants to take 0:13:32.356 --> 0:13:35.196 a position. Absolutely. So if you go to if you 0:13:35.316 --> 0:13:37.836 click sell on the screen and you go to a 0:13:37.876 --> 0:13:41.396 limit order, okay, so I'm gonna sell for forty cents 0:13:41.396 --> 0:13:44.236 and I'll get paid back two hundred and twenty two 0:13:44.236 --> 0:13:47.716 dollars if it happens. Yeah. So like maybe I feel 0:13:47.716 --> 0:13:52.196 like for that if some powerful person in Congress just says, yeah, 0:13:52.316 --> 0:13:54.476 maybe we're gonna do this right, it's in the news. 0:13:54.916 --> 0:13:57.476 If there's one little blip, maybe the market will move 0:13:57.516 --> 0:13:59.716 my way and then you just sell automatically. You just 0:13:59.836 --> 0:14:02.916 made two hundred dollars yea, and that can made one 0:14:02.996 --> 0:14:06.156 hundred bucks one hundred year, and that can happen any 0:14:06.156 --> 0:14:07.876 time between now and the end of the year. Yep. 0:14:08.076 --> 0:14:10.596 So like I got some action now, yeah right, And 0:14:10.676 --> 0:14:12.996 I do feel like, I mean, you know, people have 0:14:13.036 --> 0:14:16.596 different feelings about gambling, but like I'm definitely gambling here 0:14:16.676 --> 0:14:18.276 and it's okay, right, Like I'm a grown up. I 0:14:18.316 --> 0:14:20.956 have a hundred bucks. Yeah, no, it's I mean, any 0:14:21.036 --> 0:14:24.876 futures market has speculators and has headers, right, Like obviously, 0:14:24.916 --> 0:14:27.116 even if you look at the grain market, like the 0:14:27.356 --> 0:14:29.796 big firms on Wall Street that has the entire desk 0:14:29.876 --> 0:14:33.236 dedicated to shading grain, they are not hedging, like they're 0:14:33.236 --> 0:14:36.156 not worried about their farm production, and they are also speculating, 0:14:36.156 --> 0:14:38.836 but they're speculating it with a lot of data and research. 0:14:39.316 --> 0:14:42.156 It's just degrees of speculation. And like price discovery is 0:14:42.156 --> 0:14:44.796 a useful function of markets, right, ABU tells the world 0:14:44.956 --> 0:14:47.196 what people betting a lot of money think is going 0:14:47.236 --> 0:14:50.916 to happen about important things. Absolutely, with inflation, our markets 0:14:50.916 --> 0:14:53.596 predicted inflation will get this high and actually beat the 0:14:53.596 --> 0:14:56.556 Bloomberg forecast six out of the seven past reading is 0:14:56.596 --> 0:14:58.876 just because again, if you put money where your mouth is, 0:14:58.996 --> 0:15:02.036 and if you have an actual market dictating the probability 0:15:02.076 --> 0:15:04.636 of things where it's just you know, people going out 0:15:04.676 --> 0:15:06.436 and saying, oh, I believe this is going to happen, 0:15:06.836 --> 0:15:09.476 you get like way better data and this data, so 0:15:09.756 --> 0:15:12.236 I think it's so important for especially the world are 0:15:12.276 --> 0:15:14.996 in now Okay, well let's talk about inflation. That maybe 0:15:15.036 --> 0:15:17.276 the big one right now, right in terms of the economy, 0:15:18.116 --> 0:15:21.436 what are traders on CALCI predicting about inflation for the 0:15:21.516 --> 0:15:24.236 next oh what for the rest of the year. Say, yeah, 0:15:24.316 --> 0:15:27.236 so this month now June, it's predicted to be around 0:15:27.436 --> 0:15:30.676 one to one point one percent the month over month CBI, 0:15:30.756 --> 0:15:34.196 and for the whole year between eighty nine percent. I 0:15:34.196 --> 0:15:36.156 think the markets do think it is going to start 0:15:36.196 --> 0:15:38.756 going down, but I guess not at the rate that 0:15:38.836 --> 0:15:41.716 everyone wants to. How big is the calcie market for inflation? 0:15:41.716 --> 0:15:43.596 How much money are people betting in that market? It 0:15:43.636 --> 0:15:46.716 goes around like two hundred three hundred a per per month. Okay, 0:15:46.756 --> 0:15:49.796 so small, that's very still small. Yeah, you know, as 0:15:49.796 --> 0:15:52.436 I'm looking over the things you can bet on here, 0:15:52.476 --> 0:15:54.556 I mean I want there's a couple of questions come 0:15:54.596 --> 0:15:56.996 to mind, right, Like one, what are things you're not 0:15:57.436 --> 0:15:59.996 allowed to make markets in or that you don't make 0:16:00.036 --> 0:16:04.076 markets in. There are certain notorious cases, right like war 0:16:04.436 --> 0:16:08.276 or terrorism or assassination, and I assume you wouldn't do that. 0:16:08.476 --> 0:16:11.556 Oh no, not at all. And these actually are explicitly 0:16:11.636 --> 0:16:15.236 You're you're completely right, like more assassination, terrorism, these are 0:16:15.236 --> 0:16:18.156 actually explicitly cut off. And are there people who are 0:16:18.236 --> 0:16:23.076 prohibited from trading like can insiders trade. No, yes, there 0:16:23.116 --> 0:16:25.916 are people who are prohibited from trading. Insiders cannot trade. 0:16:26.076 --> 0:16:28.476 Let me ask you this. Members of Congress sort of 0:16:28.556 --> 0:16:31.676 notoriously are allowed to trade on the stock market, even 0:16:31.716 --> 0:16:33.716 if they have inside information about what Congress is going 0:16:33.756 --> 0:16:37.676 to do. There are on your market. There are things 0:16:37.756 --> 0:16:40.116 is Congress going to pass this law or that, including 0:16:40.156 --> 0:16:44.476 the daylight savings law. Can members of Congress trade on Kelsey? No, 0:16:44.556 --> 0:16:47.956 they cannot. They can trade on markets that are not 0:16:48.076 --> 0:16:49.676 on the ball of this market. So if they want 0:16:49.676 --> 0:16:52.916 to trade on I don't know the weather in New York, 0:16:52.916 --> 0:16:55.676 they can do that. But no, no congress person or 0:16:56.516 --> 0:16:58.756 or their staffers can trade on the Funnily enough, we 0:16:58.796 --> 0:17:02.276 have this market on whether the stock trading band for 0:17:02.356 --> 0:17:05.116 Congress is going to happen this year because it was 0:17:05.276 --> 0:17:09.396 very big news and we opened the market us to 0:17:09.396 --> 0:17:13.116 be clear, members of Congress can still trade stocks, but 0:17:13.156 --> 0:17:16.476 they cannot trade the CALCI contract on whether they are 0:17:16.476 --> 0:17:19.916 going to ban themselves from trading stocks. I'm pretty sure 0:17:19.956 --> 0:17:22.436 that's a metaphor for something, but I don't know what 0:17:22.556 --> 0:17:26.076 it is. In a minute, the problem CALC has to 0:17:26.116 --> 0:17:28.676 solve to go from being a little site that almost 0:17:28.716 --> 0:17:31.356 nobody has ever heard of to being the New York 0:17:31.396 --> 0:17:42.996 Stock Exchange of event trading. That's the end of the ads. 0:17:43.436 --> 0:17:46.396 Now we're going back to the show. So what do 0:17:46.436 --> 0:17:49.516 you want to do that you're not doing now? I 0:17:49.596 --> 0:17:52.636 think for us that the biggest thing is growing roading. 0:17:52.716 --> 0:17:55.356 What we have our vision is to be like the 0:17:55.396 --> 0:17:57.396 New York Stock Exchange for events. And we really think 0:17:57.436 --> 0:18:00.196 that events have the capacity to grow and be like 0:18:00.236 --> 0:18:04.436 a mainstream and you know, boring commonplace asset class. And 0:18:04.516 --> 0:18:06.476 our dream is to get there and really like be 0:18:06.756 --> 0:18:09.636 the exchange and help you the environment around it. So 0:18:09.716 --> 0:18:12.796 for us, it's always about innovating and releasing new contracts 0:18:12.836 --> 0:18:15.556 that are very relevant and then hopefully growing the pipe. 0:18:15.556 --> 0:18:18.476 But we want to integrate with for example, biggest other 0:18:18.516 --> 0:18:21.636 parts of all streets are getting brokers to offer our markets, 0:18:21.676 --> 0:18:24.796 getting marketmakers to come and provide liquidity. So our goes 0:18:24.796 --> 0:18:28.396 to really like buel this exchange up with more contracts 0:18:28.396 --> 0:18:31.236 and more more liquidity, more people and I mean your 0:18:31.876 --> 0:18:34.396 customers now our retail. Right, they're just people like me, 0:18:34.516 --> 0:18:37.556 just like ordinary people, which I would not have guessed. Right, 0:18:37.636 --> 0:18:41.516 there's another universe where what you start with is institutions, right, 0:18:41.556 --> 0:18:45.316 big companies working through investment banks betting not one hundred 0:18:45.316 --> 0:18:47.356 bucks but you know, one hundred thousand bucks or a 0:18:47.356 --> 0:18:49.516 million dollars right like that in a way seems like 0:18:49.556 --> 0:18:52.276 a more I don't know logical place to start. Yeah, 0:18:52.316 --> 0:18:55.836 our goal is to have these guys and institutions also 0:18:55.876 --> 0:18:58.556 come to Kaushi. I think our strategy was pretty much 0:18:58.596 --> 0:19:01.036 like on the liquidity building. We thought it was easier 0:19:01.036 --> 0:19:04.556 to start with retail and then built some base of 0:19:04.596 --> 0:19:09.236 retail users, then bring in specific marketmakers who provide liquidity, 0:19:09.396 --> 0:19:11.516 and then with the market makers who bring brokers. That 0:19:11.556 --> 0:19:13.996 will increase a number of users and then more liquidity. 0:19:14.356 --> 0:19:16.836 The issue with starting in exchange with very big players 0:19:17.516 --> 0:19:20.076 is that the level of liquidity you need is very 0:19:21.316 --> 0:19:23.396 For somebody to take a big position, you need a 0:19:23.396 --> 0:19:26.956 ton of money on the other side, and with a 0:19:27.036 --> 0:19:30.476 very new asset class like hours, it's very hard to 0:19:30.516 --> 0:19:32.116 find the person to be on the other side. We 0:19:32.196 --> 0:19:34.796 thought it would be a better strategy to kind of 0:19:34.836 --> 0:19:38.716 like do beauting up versus like trying to to start 0:19:38.756 --> 0:19:40.316 from from that side, because then we would need like 0:19:40.556 --> 0:19:42.876 hundreds of millions of dollars on the other side. Very 0:19:42.876 --> 0:19:45.236 complicated to to start from there. For us, now, it's 0:19:45.236 --> 0:19:48.876 really about bauting liquidity, right. It's it's about having what 0:19:48.996 --> 0:19:51.916 we have that's working and making this a massive scale. 0:19:51.956 --> 0:19:53.596 Like you know, when you think about stocks, you're like, 0:19:53.636 --> 0:19:57.276 you can buy almost any amount in any price, yeah, 0:19:57.676 --> 0:20:00.836 tiny spreads. Right, it's really exactly easy and efficient to 0:20:00.876 --> 0:20:03.356