A Prediction Market About the Past? Sure, Why Not!

Would you put money on whether Covid-19 originated from a lab? How about whether some of the footage from the Apollo 11 moon landing was actually filmed on Earth?Verifact Markets, a new startup that bills itself as a “prediction market for disputed facts,” is betting that people will be eager to weigh in on questions like these. The company’s premise is so quirky it sounds like something a couple of philosophy and economics majors dreamed after too many bong rips in their dorm room: Instead of wagering on the future, why not trade on stuff that already happened?When Verifact Markets launched on Friday, some of the initial topics traders could take a position on included whether Jeffrey Epstein died by suicide and whether insurance behemoth State Farm “intentionally delayed” claims related to the 2025 Los Angeles wildfires. The featured market during beta testing was, indeed, about the origins of Covid-19. (As of writing, the market is still open, with “true” priced at 76 cents and “false” at 32; the majority of participants had put money on the pandemic beginning at Wuhan Institute of Virology.)Verifact Markets is being funded and incubated by Positron Capital Management, the family office of tech investor Peter Wokwicz. He envisions the startup as a way to settle debates over hot-button issues like the amount of energy consumed by AI data centers. “I’m excited, because nobody’s done this before,” Wokwicz says. “We’re not going to shy away from controversial markets.”In a regular prediction market, participants buy financial instruments known as event contracts, which are pegged to whether a specific event will take place in the future. Topics range from which team will win the Super Bowl to what the price of bitcoin will be in 15 minutes to whether the US and Iran will reach a nuclear deal. Someone who buys a “yes” contract on Polymarket that the Bears will start Case Keenum next week will make money if that happens. Similarly, someone who bets “no” on Kalshi that it will rain in Miami tomorrow will lose money if there’s a downpour.Each prediction market has its own rules about how it resolves events, and sometimes things can get messy, like when Polymarket bettors tussled over whether Ukrainian leader Volodymyr Zelensky actually wore a suit, or when Kalshi traders revolted over how the platform settled a market on whether Iran’s supreme leader would leave power.Verifact Markets’ setup is even messier. That’s by design, since the platform focuses specifically on scenarios where people disagree on what took place. It lists markets for past events that it considers “disputed” and lets its customers wager “true” or “false” on whether they really happened. People can also submit “evidence” for or against their position, and the company plans to offer rewards for credible documentation that helps resolve markets. If Verifact Markets determines that there’s enough evidence to make a call, it does so. If it still can’t tell, the company will “expire” a market and pay out users based on its calculation of the odds at the time.According to Verifact Markets chief executive and cofounder Rodrigo Aquino, the markets themselves won’t determine whether something is true or false. That means even if all of the customers in a given market voted “true,” that won’t necessarily make it so. Trading prices will be factored in alongside other evidence and documentation that is submitted to the company by users. It is also planning to launch its own research system, which Aquino describes as “patent pending.” When I ask Aquino how the system works, he keeps the answer impressively vague: “We are analyzing, multi-dimensionally, a multitude of data points,” he says, noting that the process is “very mathematical, very quantitative” and also “very secretive.”When I point out that credibly determining how the Covid pandemic started would be a massive news story, resolving a mystery that has eluded scientists for years, Aquino remains upbeat. “It’s doable,” he says.Verifact says that it is currently in talks with market makers about providing liquidity. Right now, the project is so small that it is being bootstrapped by Positron Capital Management. There are a number of ongoing lawsuits in the US over whether prediction markets should be considered financial instruments or gambling, but it’s hard to discern how Verifact would factor into that debate because of its rather odd business model.For the time being, the company is only offering its markets to people outside of the United States as it looks for the most viable legal path forward domestically, as it is not a licensed exchange in the US. But Wokwicz claims he purchased a regulated financial exchange in the last year and intends to roll Verifact into it when he can. Like Polymarket’s decentralized product, Verifact Markets is “on-chain,” and participants can make trades with stablecoins, a class of cryptocurrencies tied to the price of the US dollar and other fiat currencies.Verifact Markets is part of a wave of startups interested in resolving the facts about disputed news and historical events. One of the most recent entries was the short-lived Peter Thiel–funded project Objection (later rebranded as The Primary), which aimed to determine whether specific media stories were accurate. But before the truth-adjudication stuff really got off the ground, The Primary pivoted to publishing news and a scoreboard for ranking journalists.For now, there are very few details about how Verifact Markets will ultimately determine whether something is true or false, even though its entire value proposition rests on the idea that it’s uniquely positioned to do so. It's an extremely tall order, made even taller by all the other details that haven’t been worked out yet, like how the project will make money—it doesn’t plan to charge fees at launch. Wokwicz isn’t focused on that sort of thing, at least not yet. “What I'm looking forward to most is just some of the very unique evidence that people are going to dig up,” he says. “We're going to bring out truth—what is true and false.”Some prediction market veterans say they are intrigued by Verifact Markets, even if there are plenty of remaining questions about how it will work. “I'll probably join just so I can keep making money off of the 2020 election for the rest of my existence,” says prominent prediction market trader Caleb Davies.