Markets on numbers. Designed for apps, desks and traders.
Joined May 2025
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Check out @justigor discussing why all numerical events will eventually live on @functionspaceHQ
Also:
- How builders will benefit from better infrastructure to construct the next wave of market products
- Why a complex core is needed to build simple trader products
- What's already built and how you can go trade live today
Prediction Markets and Numerical Outcomes: Igor Sonkin on functionSPACE and Building Your Own Payoff
Shoal Signal Ep. 22 with Igor Sonkin (@justigor), Co-Founder at @functionSPACEHQ, hosted by @zaddycoin
We cover markets on numbers instead of yes or no, swapping a stack of binary order books for one pricing function across the whole probability curve, letting traders construct their own payoff, agents as market participants, and why builders should look beyond binary event contracts.
0:00 Intro
0:29 Catching an identity fraudster inside the bank
2:34 What numerical outcome markets are
3:54 The next derivative, not just a prediction market
4:36 Makers price the curve, takers build the payoff
6:27 Why binary markets split liquidity into buckets
7:51 One pricing function across the whole curve
9:53 Impermanent loss and protecting the maker
10:33 Pregame vs. in-game information flow
12:29 What PMF looks like for an infrastructure layer
13:22 Underdog and room to innovate in sports
14:17 Set your own line, construct your own lottery ticket
16:59 No shortcuts to simplicity
17:24 Entertainment, forecasting or economic tool
17:52 Starting from Dave White's distribution markets paper
19:10 Builders as the customer
21:23 Pre-TGE markets and hedging DeFi yields
22:19 Agents as market participants
26:35 Where the edge comes from if every agent knows the same thing
29:01 Time horizons: some things just take time
30:30 Why Augur didn't become Polymarket
32:19 Alpha: forecasting books and design space beyond binary contracts
functionSPACE retweeted
Construct your own lottery ticket
functionSPACE co-founder Igor Sonkin explains how traders can set their own line on any numerical outcome
“You can create these like fun two click experiences.”
“If he hits exactly 51, I'm getting my like 200X etc.”
Prediction Markets and Numerical Outcomes: Igor Sonkin on functionSPACE and Building Your Own Payoff
Shoal Signal Ep. 22 with Igor Sonkin (@justigor), Co-Founder at @functionSPACEHQ, hosted by @zaddycoin
We cover markets on numbers instead of yes or no, swapping a stack of binary order books for one pricing function across the whole probability curve, letting traders construct their own payoff, agents as market participants, and why builders should look beyond binary event contracts.
0:00 Intro
0:29 Catching an identity fraudster inside the bank
2:34 What numerical outcome markets are
3:54 The next derivative, not just a prediction market
4:36 Makers price the curve, takers build the payoff
6:27 Why binary markets split liquidity into buckets
7:51 One pricing function across the whole curve
9:53 Impermanent loss and protecting the maker
10:33 Pregame vs. in-game information flow
12:29 What PMF looks like for an infrastructure layer
13:22 Underdog and room to innovate in sports
14:17 Set your own line, construct your own lottery ticket
16:59 No shortcuts to simplicity
17:24 Entertainment, forecasting or economic tool
17:52 Starting from Dave White's distribution markets paper
19:10 Builders as the customer
21:23 Pre-TGE markets and hedging DeFi yields
22:19 Agents as market participants
26:35 Where the edge comes from if every agent knows the same thing
29:01 Time horizons: some things just take time
30:30 Why Augur didn't become Polymarket
32:19 Alpha: forecasting books and design space beyond binary contracts
Our friends at @perpdotcity are onto something.
Will AI destroy the internet before saving it?
$IMI is now live on Perp City, a perp market on the internet’s cybersecurity risk.
functionSPACE retweeted
We should see event contracts as a bet on an end state i.e. who wins, or where the number lands at resolution.
In between, the market's posting prices as information arrives, and in most PM's you can trade it the along the way.
Leverage ties you to the path.... your liquidation price is set against the mark which jumps every time new information lands.
You were right about the end state and got taken out by the path.
So leverage in these markets asks you to be right twice, once about the outcome and once about the path the market takes to get there.
Leverage is a useful and probably necessary feature for building deeper markets.
One lens is that people asking for leverage want more exposure to being right on outcome i.e. a bigger payout relative to the funds they're putting at risk.
We get this property inherently on @functionspaceHQ markets as there's a native way to express something similar through a tighter range - i.e. precision.
Rather than increasing your exposure to a broad outcome through borrowed capital, you can narrow the range of outcomes you're willing to bet on.
There's no liquidation price. Your payoff at resolution depends on where the outcome lands, independent of the path prices took to get there.
Both forms of exposure have a place in prediction markets. Leverage makes the path itself part of the trade. Precision lets you express a more concentrated belief about the destination.
Both can produce higher risk and higher returns, but they're fundamentally different trades.
I think there's something interesting about being able to dial up your risk by being more specific about that end state.
Leverage for Prediction Markets will never be big.
At best it's a niche product.
Each dot is a type of Polymarket trader with 5x leverage, priced so the lender breaks even. Further right = more of them end up better off. Higher = the lender makes money on them. Bigger = more of the volume.
No group reaches 50%. In every one, most traders end up worse off with leverage than without.
Now look at the two dots furthest right, pros and sports bettors. Both are below zero: the lender loses money on them.
The highest dots? Retail and bonders, the people who want leverage most and get hurt by it.
And the giant dot is whales, almost three-quarters of all the money. They're sitting on cash. They don't need a loan.
So it loses money on the traders it helps and makes money on the ones it hurts. That's a niche, not a market.
The audience for leverage is thin / no in the market yet.
Full case study in comments
functionSPACE retweeted
Key takeaways from the Thought Leader Summit hosted by @Maven11Capital and co.
• We’re early.
• Are we all competing for the same customers? No. The pie is huge, and PMs are still focused on net growth. Almost any event can have a market. Liquidity will keep growing.
• Major unlock for institutions: how do we free up capital from full collateralization?
• Permissionless builder codes show where PMs can go as liquid market layers. Think Phantom x Hyperliquid.
No where but up.
Check out our friends over from @overdotcomputer
Introducing perpetual prop trading for stocks on over.computer.
Get instantly funded to trade tokenized stocks with up to $50k on @solana and soon on @Seeker
We rebuilt risk model from ground up. Fewer trading restrictions. No evaluation. No daily max loss. No trading fees. 3 days to trade. Get paid.
Built with the best @privy_io @Helius @PhoenixTrade @ritualnet
Season 1: The Human Benchmark is live.
over.computer get in.
docs.over.computer read how it works.
functionSPACE retweeted
Arbitrum just enabled Programmable Markets
Blockchain-based protocol @functionspaceHQ goes live on @Arbitrum.
The protocol is creating an on-chain primitive to engineer programmable markets for any metric measurable in the physical world or cyberspace.
With this architecture, developers can integrate custom prediction and outcome-settlement functionality into consumer apps, games, and company interfaces without requiring users to navigate third-party exchanges.
The technology utilizes the scalability benefits of Arbitrum’s rollup solution, ensuring constant liquidity and instant settlement for customized event contracts.
functionSPACE retweeted
NEW PRIMITIVE ALERT
Welcome @functionspaceHQ to Arbitrum
functionSPACE lets teams build programmable markets around any measurable outcome and bring them directly into their apps
functionSPACE is launching on @arbitrum!
Join the waitlist for what youre interested in:
🔵 culturespace: Trade on what's trending. → culturespace.exchange
🟠 fanspace: Trade fantasy points, pick the range. → fanspace.exchange
🟢 propspace: Call the number on player props. → app.propspace.fun
Stay tuned 👀
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the functionSPACE team will be attending @token2049! We'll also be hosting a prediction markets night with @MoiraiResearch.
Please reach out to our team on telegram if you are attending the conference.
Luma link to event below ⬇️
