XO Market has successfully raised $6 million in a seed funding round, aiming to disrupt the traditional prediction market landscape by empowering users to create their own markets.
This funding round saw participation from notable investors including Coinbase Ventures, 20VC, Picus Capital, and Venture Together, alongside angel investors like Pat Cummins, the captain of the Australian cricket team.
Positioning itself as the “YouTube of prediction markets,” XO Market differentiates its approach from competitors such as Polymarket and Kalshi, which rely on internal teams to curate market offerings.
Co-founder Ali Habbabeh explained in an interview with CoinDesk, “Current leading platforms like Kalshi and Polymarket function more like Netflix, determining which markets are available. We have completely reversed that model; on XO, users are the ones who create the markets.”
XO enables individuals and organizations to establish markets, define parameters and fees, and facilitate trading, thereby expanding the variety of tradable events and fostering innovative market ideas.
“We believe the future of prediction markets lies in user-generated content. The most engaging markets arise from the community, not from a platform’s decision,” Habbabeh noted.
Since its mainnet beta launch in mid-November, XO has seen significant engagement, with over $150 million in trading volume, more than 30,000 users, and upwards of 600 user-created markets. An initial testnet was introduced in April 2025.
“The metrics are promising because the incentives align well,” Habbabeh stated. “If you create an appealing market, it attracts trades. If it’s not compelling, it will naturally fade away.”
The prediction market sector has experienced rapid growth, with total industry volume surpassing $60 billion in 2025, a significant increase from the $15 billion to $16 billion range in the previous year.
Polymarket has played a crucial role in this growth, with monthly trading volumes escalating from $54 million at the beginning of 2024 to over $2.6 billion by November.
However, XO's model encounters challenges related to liquidity and market activity. Other platforms that rely on user-generated content have faced difficulties in scaling, and established players may be hesitant to adopt this model due to infrastructure limitations and the necessity to maintain liquidity across diverse events.
The company is also set to introduce “XO Vaults,” a feature aimed at enhancing market participation by allowing users to pool resources and earn returns from liquidity provision.
“On platforms like Kalshi or Polymarket, liquidity is managed by a few large market makers,” Habbabeh remarked. “With XO Vaults, anyone can step in as a market maker.”
This product aims for annual yields of approximately 8% to 10%, allowing users to invest in strategies linked to specific areas such as sports or politics.
“It’s akin to copy trading, but focused on liquidity provision,” Habbabeh explained. “We’re aiming for annual returns of around 8% to 10%, similar to what market makers typically achieve.”
Additionally, the company is working on a feature named “XO Stories,” designed to facilitate more intricate, multi-outcome structures that go beyond conventional parlays.
“This isn’t just a straightforward replication of sportsbook parlays into prediction markets,” Habbabeh clarified.
Despite facing increasing regulatory scrutiny in various markets, XO is optimistic that its on-chain and permissionless framework will give it an edge over more centralized platforms.
“Everything on XO is transparent and operates on-chain,” Habbabeh stated. “This positions us distinctly compared to more centralized alternatives.”
As it continues to grow its ecosystem, the company remains dedicated to scaling its user-centric model.
“The internet has shown us that the best content originates from users, not centralized studios,” Habbabeh concluded. “We believe prediction markets will evolve in a similar manner.”