The ambitions of Kalshi, MTS, and a16z

Core Viewpoint

The Chronicle of the Spirit of Prediction Markets

The product of prediction markets is quite simple (at least it appears so on the surface); it transforms the object of a binary option bet into any event and information. However, the core spirit behind it has undergone several periods of change.

The earliest discussions about prediction markets actually originated from Hayek. In his view, the distribution of knowledge is uneven, and the market, as a coordinating mechanism, mobilizes information from various corners of society. From vendors to experts, different people's judgments about the future converge into a price on the order book in prediction markets.

This discussion is the oldest but also the most frequently referenced. When you see terms like "probability aggregation market" or "truth machine" in marketing articles, they all stem from Hayek's "The Use of Knowledge in Society," written nearly a century ago.

After Hayek, the torch was passed to Robin Hanson, who is still actively engaging on Twitter and battling with digital currency enthusiasts. His main contribution was designing a mechanism called the Logarithmic Market Scoring Rule (LMSR), which incentivizes those who know the truth to speak it. This design essentially laid the foundation for the current design paradigm of prediction markets.

With such an incentive mechanism in place, information holders from all corners are motivated to contribute their information and participate in the market. Extrapolating further, it seems that such markets could also be used for public governance, opening a market for every future issue where people can vote with real money, thus constructing the future landscape through changes in odds on the order book. This utopia is called Futarchy, composed of "future" and the suffix "-archy" representing governance.

Foundational Work: "Logarithmic Market Scoring Rules for Modular Information Integration"

The above belongs to the official history, something that would be covered in university microeconomics lectures. However, I believe that metaphysical discussions about prediction markets after this point are largely meaningless until a16z's gaze fell upon this field.

Presence and New Media

In 2024, a16z engaged with the prediction market company Kalshi, and then invested in a $5 billion round in August 2025. Whether there was a discount is currently unknown, but Kalshi's valuation has already reached an astonishing $22 billion, being called the fastest-growing company (in valuation) aside from AI companies.

After building their position, a16z began to activate its media machine, writing a series of long articles explaining why Kalshi is one of the most important companies of this era. To be honest, while the exchange and casino business is enticing, due to potential compliance pressures and moral hazards, it will never achieve a high PE multiple in the market. Clearly, a16z's vision extends beyond this.

So, what exactly makes Kalshi, or the entire prediction market sector, important? a16z's answer is "presence."

At this point in time, the interaction between people and the world is actually separated by a layer of plastic film, akin to only being able to browse the front end of a webpage while being completely unaware of the backend structure. You can consume the front-end audiovisual experience, narratives, and even "real feelings," but you cannot change or be present.

Not to mention, it is evident that in the not-so-distant future, even the transformation of the real world will gradually be outsourced to agents. So where does humanity's role in the historical process lie? It seems to be reduced to crying into light-colored sheets after being well-fed.

However, prediction markets offer a way to intervene, called prediction. It requires you to bet real money, and then, like buying a ticket to enter a stadium, you participate and observe the fluctuations of probabilities throughout the process, willingly bearing the theta decay, and taking screenshots of the prediction market probabilities to share in all groups, loudly declaring your positions and the views behind them.

This feeling is very anti-cynical; in an instant, the infinite distance, countless people, the selection of cardinals, the thickness of snow in New York, the rise and fall of crude oil within five minutes, and even whether Jesus will return in 2026 all relate to you. All the uncertainties and feelings of powerlessness in postmodernity collapse under your powerful predictions. You are no longer a gambler; you are a distinguished super observer, a prophet of your tribe, a calm spectator of history.

When enough people start to use, discuss, and rely on this medium, the authority of the market itself will begin to rise. Kalshi will provide the ultimate authority on the event's: 1. authenticity 2. importance. This is undoubtedly a key element in the new media empire envisioned by a16z.

An image explaining Charlie Kirk's assassination

Case Study: MTS

Finally, let's talk about this new media defined by a16z. From the first generation of a16z and YC advocating In-house Media, to the second generation represented by 20VC and Not Boring Capital, which emerged from media into VC, and finally to media like TBPN being acquired by companies and institutions, the power of media has been continuously shifting and decentralizing. The battleground of public opinion has moved from blogs and television programs to Twitter and podcasts.

Now, saying that VCs should also create content and build brands to help founders with distribution is already unoriginal in 2026. However, the new media that a16z talks about is a full-spectrum project, encompassing everything from upstream narrative setting, midstream product financing and promotion, to downstream customer acquisition, all within range, and at a speed far beyond what traditional media and agencies can comprehend.

What used to take 3-6 months to complete a project can now be done in a few weeks with new media, including founder podcasts, short video clips, AI-generated release videos, newsletters about company spirit and development plans, etc., releasing information with extreme intensity in an extremely short time. They call it "taking over the timeline."

Perhaps various self-media and AI-generated information are too noisy, so we have to be a bit louder. And our noise is more important than yours.

MTS (short for "Monitoring The Situation") embodies this philosophy, providing 24/7 news live coverage on Twitter, allowing a series of political figures, tech company founders, and key individuals in hot news to speak, then slicing and disseminating the content. They claim to only report the most important things in the world until something even more important happens.

MTS interviews Robinhood

Looking back at Kalshi, it feels like everything aligns perfectly. With just the volume and a16z's endorsement, media like MTS can certainly survive, but their influence outside a16z's spotlight remains limited, more like a fraternity media or campus club publication. But prediction markets are different; the trading volume and positions are real money, seemingly possessing a certain independent third-party coldness and persuasiveness.

Imagine if you are a staunch MAGA supporter and, during the midterm elections, you see that the market for Republican victory on Kalshi has reached billions in trading volume, yet the price for the YES option has dropped to $0.1. Would you momentarily waver—did the folks on Capitol Hill already know the outcome? Has a fair information market already provided a glimpse of the future?

This may be the core reason why Kalshi is valued at $22 billion, this reality-distorting force field is rarely acquired by a private company in human history.

TBPN New Media Landscape