Polymarket

I get the enthusiasm for prediction markets as a way to get at decentralized truth. But isn't there going to be noise from people wanting to hedge their position rather than betting an outcome will happen?

Is the hope just that the hedging volume will be relatively low and too small to dilute the predictive signal?

The only problem is externality pricing.

Building https://negationgame.com

A subsidy would help, but not sure how much it would mitigate this. E.g. trader might have good info that Kamala is likely to lose but still buy "win" on the prediction markets as a hedge

Root of the problem is a trader's primary goal is to make money, not to provide signal to a market, and you don't get to see all the trader's "off-balance sheet" items

Ooh really great line of thinking.

A Robin Hanson type would call this a “subsidy” for first order traders. Basically it prices the value of information 

But in the context of what Hanson would call multimodal markets (I.e. self-fulfilling prophecies) I’m not sure what the effect would be