a16z Advisor: Predicts that only 1.3% of political contracts in the market have liquidity, recommends introducing AI agents to provide liquidity

Odaily Planet Daily reports that Stanford Graduate School of Business professor and a16z & Meta advisor Andy Hall posted on X platform stating that his team has developed a new dataset focused on political prediction markets, liquidity, and settlement rules. The research found that the vast majority of political contracts in prediction markets lack activity, with only 1.3% of contracts having sufficient liquidity. Kalshi and Polymarket rarely list contracts with identical rules, leading to further fragmentation of liquidity.

Andy Hall proposed four improvement suggestions: first, list contracts on core issues and collaborate with independent organizations to define markets of social concern; second, pay market makers to inject initial liquidity into political markets; third, introduce AI agents to trade in areas where humans do not participate, generating price references needed by society; fourth, establish unified definitions and settlement rules across platforms. Andy Hall believes these measures will attract traders seeking to hedge political risks and turn prediction markets into the truth machines society needs.