XO Market has successfully raised $6 million in seed funding, led by 20VC, Picus Capital, and Coinbase Ventures, among others. The startup aims to revolutionize prediction markets by allowing users to create and manage their own trading opportunities, moving away from the centralized models of existing platforms.
Co-founder Ali Habbabeh described XO as the “YouTube of prediction markets,” contrasting it with established services like Kalshi and Polymarket, which dictate the markets available to users. “On XO, users create the markets themselves,” he explained. This shift empowers individuals and organizations to define market parameters and fees, fostering a more diverse trading environment.
Since launching its mainnet beta in November, XO has reported over $150 million in trading volume and more than 30,000 users participating in over 600 user-generated markets. Habbabeh noted that the platform’s success stems from a natural selection process: markets that attract interest thrive, while those that do not fade away.
However, the user-generated model does come with challenges. Competing platforms have struggled to maintain liquidity, leading to inactive markets. Habbabeh indicated that larger platforms like Polymarket and Kalshi are unlikely to adopt user-generated models due to the complexities involved in managing liquidity across numerous markets.
The prediction market sector is gaining traction, with a significant increase in trading volumes. In 2025, the overall industry volume surged to over $60 billion, compared to about $15 billion the previous year. This growth is attributed to the rising interest from both retail and institutional traders, who seek alternative methods for assessing uncertainty.
In addition to its core platform, XO is set to launch a new product called “XO Vaults,” designed to democratize market making. This feature will enable users to pool capital and engage in liquidity provision, traditionally dominated by professional firms. Habbabeh explained that this approach allows anyone to become a market maker, potentially earning returns of 8% to 10% annually.
Another innovative feature in development is “XO Stories,” which aims to enhance how parlays function within prediction markets. This feature will allow users to link multiple outcomes creatively, offering a more dynamic pricing model compared to traditional parlays.
Despite increasing regulatory scrutiny in the U.S., Habbabeh remains optimistic about XO’s permissionless, on-chain design, which he believes offers transparency advantages over centralized platforms. As the company focuses on expanding its ecosystem, Habbabeh is confident that the user-driven model will continue to set XO apart.
“The best content comes from users,” he stated, drawing parallels to the evolution of the internet. “We think prediction markets will follow the same path.”
XO Market has raised $6 million to empower users in creating their own prediction markets, diverging from traditional centralized platforms. With innovative features like XO Vaults and XO Stories, the startup aims to reshape the landscape of market making and trading dynamics.