XO Market bets on user-generated prediction markets to rival Polymarket and Kalshi

Total industry volume jumped roughly fourfold to more than $60 billion in 2025, up from about $15 billion–$16 billion the year before, with platforms like Polymarket driving much of that growth.

On Polymarket specifically, monthly trading exploded from just $54 million at the start of 2024 to over $2.6 billion the following November, helping push cumulative volume past $9 billion in a single year.

XO Vaults

Alongside its core platform, XO is preparing a new product aimed at "democratizing" another key part of the ecosystem: market making.

The forthcoming “XO Vaults” will allow users to pool capital into strategies that provide liquidity across prediction markets, something traditionally dominated by professional firms.

“On platforms like Kalshi or Polymarket, liquidity is controlled by a handful of large market makers,” Habbabeh said. “With XO Vaults, anyone can become a market maker.”

Users will be able to create vaults tied to specific strategies or categories, such as sports or politics, and earn fees by supplying liquidity. Others can invest in those vaults, effectively gaining exposure to market-making returns without actively trading.

“It’s similar to copy trading, but for liquidity provision,” Habbabeh said. “We’re targeting yields of around 8% to 10% annually based on what market makers typically earn.”

The product, expected to debut within weeks, could introduce a new yield primitive in decentralized finance, blending prediction markets with passive income strategies.

“Not everyone wants to bet on outcomes,” Habbabeh said. “Some people just want to earn from the activity around those markets.”

Parlays

The XO team is also developing a feature it says could reshape how parlays work in prediction markets.

“It’s not your typical copy-paste of sportsbook parlays into prediction markets,” said Habbabeh.

The feature, tentatively named “XO Stories,” aims to give users more creative control by linking multiple outcomes beyond traditional parlays. Though details remain limited, the team says pricing will be dynamic, offering a new take on prediction markets.

Built on XO Vaults, the system is meant to support complex, multi-outcome structures without simply aggregating existing trades. Habbabeh shared few details, but suggested it could reshape how users think about and use parlays.

The best content comes from users

Despite increased regulatory scrutiny around prediction markets, particularly in the U.S., Habbabeh said he believes XO’s onchain, permissionless design could offer advantages.

“Everything on XO is transparent and onchain,” he said. “That puts us in a different category compared to more centralized platforms.”

For now, the focus remains on growth and product expansion.

As XO builds out its ecosystem, Habbabeh is confident the user-generated model will continue to differentiate it.

“The internet showed us that the best content doesn’t come from centralized studios, it comes from users,” he said. “We think prediction markets will follow the same path.”

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