XO Market has successfully secured $6 million in seed funding to position itself against market leaders by offering users the ability to create personalized prediction markets.
This funding round attracted support from Coinbase Ventures, 20VC, Picus Capital, and Venture Together, alongside notable angel investors like Australian cricket captain Pat Cummins.
The startup aims to be the “YouTube of prediction markets,” differentiating its approach from competitors such as Polymarket and Kalshi, which have teams making decisions about market listings.
“Current major platforms like Kalshi and Polymarket function similarly to Netflix,” co-founder Ali Habbabeh shared with CoinDesk during an interview. “They determine which markets are available. Our model is completely inverted—users are in charge of creating their own markets.”
XO empowers individuals and organizations to launch their own markets, establish parameters, set fees, and facilitate trading, which the startup believes can expand the variety of tradable events and inspire innovative ideas.
“We are convinced that the future of prediction markets lies in user generation. The most compelling markets originate from the community, not a centralized platform,” Habbabeh stated.
Since its mainnet beta launch in mid-November, the platform has already seen impressive engagement, generating over $150 million in trading volume and attracting more than 30,000 users along with over 600 user-generated markets. The initial testnet was launched back in April 2025.
“The statistics are promising because the incentives are well-aligned,” Habbabeh noted. “If users create appealing markets, trading flourishes; otherwise, they fade away.”
Prediction markets have seen substantial growth recently, with total industry volume surpassing $60 billion in 2025, a steep increase from approximately $15 billion to $16 billion the previous year.
Polymarket has played a significant role in driving that growth, with monthly trading volumes soaring from $54 million at the beginning of 2024 to over $2.6 billion by November.
However, XO’s user-generated model confronts challenges regarding liquidity and market activity. Other platforms that rely on user-generated content have had difficulties scaling, and established players might hesitate to adopt this method due to infrastructure limitations and the necessity for maintaining liquidity across diverse events.
The company is also set to unveil “XO Vaults,” a feature designed to increase market-making participation by enabling users to pool resources and earn returns by providing liquidity.
“On platforms like Kalshi and Polymarket, liquidity is primarily managed by a few dominant market makers,” Habbabeh explained. “With XO Vaults, virtually anyone has the opportunity to become a market maker.”
This product aims for annual yields of about 8% to 10% and will offer users strategies focused on specific categories like sports or politics.
“It’s akin to copy trading, but for providing liquidity,” Habbabeh added. “We’re aiming for yields in the vicinity of 8% to 10% annually, consistent with what market makers typically garner.”
The company is also innovating with a feature called “XO Stories,” which is set to enable more intricate, multi-outcome structures, going beyond conventional parlays.
“It’s not just a direct replication of sportsbook parlays into prediction markets,” Habbabeh remarked.
Amid increasing regulatory focus in various markets, XO is banking on its onchain and permissionless framework to offer a competitive advantage over more centralized platforms.
“Everything on XO is transparent and built onchain,” Habbabeh claimed. “This distinction places us in a different league compared to centralized setups.”
As it grows its ecosystem, the company remains committed to enhancing its user-driven model.
“The internet has demonstrated that the finest content arises from users, not centralized studios,” Habbabeh concluded. “We anticipate prediction markets will evolve similarly.”