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Summary: Prediction markets can allow traders to legally put in real money, if the withdrawals are then routed to charities.

This was our application to the FTX Future Fund. Due to time constraints, we haven’t collected as much feedback as we would have liked; please let us know what you think about this proposal!

Your project

Does this proposal fall under one of the areas in our "Areas of Interest" page? If so, what area does it fall under? (It's fine if the answer is no.)

Epistemic Institutions

Please describe your project in under 100 words.

Prediction markets work best when people can wager something they value. But past attempts at real-money prediction markets have been shut down by the CFTC.

Manifold Markets is building a charity prediction market (CPM). People can place bets using real money, but are required to donate all proceeds to charity. Since the money never returns to users, CPMs allow real-money betting while being consistent with financial regulations.

FTX Future Fund can allow us experiment with CPMs by providing a matching pool for user donations. This will increase participation in prediction markets, provide a testbed for real-money prediction markets, and boost charitable donations.

If the project has a website, what’s the URL?


Please describe what you are doing very concretely—not just goals and long-term vision, but specifically what you are doing in the next few months.

Manifold Markets is launching its first CPM next month with the goal of assessing demand and working out technical details. People will be able to use Manifold dollars to place bets and send winnings to their preferred charity from a pre-selected list. Manifold dollars will be converted into donations at face value (so $1 USD = $1 sent to charity). Additionally, we will subsidize these contributions using a matching quadratic funding pool of $10,000.

After running this CPM for roughly one month, we will increase the amount of prize money, offer a larger set of approved charities, and experiment with other questions and matching mechanisms.

After the second round of prize money is used, Manifold will solicit partnerships with charitable organizations, allowing them to match user donations in exchange for decision-relevant forecasts.

By subsidizing charitable donations, we hope to vastly increase the number of people who participate in prediction markets. After working out the difficulties of managing a large, active prediction market, we will explore the applications of prediction markets for institutional decision making, impact markets, and information bounties.

What’s the case for your project?

The primary reason to fund charity prediction markets is that they allow people to legally trade on prediction markets using something they value. Other reasons CPMs could be a good idea:

  1. Prediction markets reward people for being right about the future. People who are often right about the future may be good at deciding which charities are good.
  2. Prediction markets can help charities make better decisions. For example, the AMF may post a question like “Will there be >600k malaria deaths in 2022”, or more specifically “Will AMF’s follow-up survey show that 40% or more of bednets are still in use after 3 months?”
  3. Prediction markets can act as donor lotteries. Donors who win have more reason to carefully research where to send their money; donors who lose can save time deciding among charities.
  4. Prediction markets are fun! Donors may donate more to have fun, compared to what they would have donated otherwise.
  5. Donors can invest money back into the CPM platform, to fund development or offer donation matches to new traders.
  6. Donations to charity are less subject to diminishing marginal returns compared to personal wealth. For example, I’d personally prefer a guaranteed $5k rather than a coin flip between $0 and $10k, but I’m ambivalent about which of these gets donated, according to expected value theory
  7. Prediction markets can train donors to get into the mindset of putting down probability estimates on beliefs, and thinking rigorously about the future.
  8. Donors may not have to pay taxes on earnings in a CPM, the way they don’t for any earnings in a donor advised fund.

[optional] If you have further materials for us to read (e.g. documents you've written for other potential funders), you can link to them here. You can also upload them below.

Sam’s original writeup on charity prediction markets

If you have further materials for us to read (e.g. documents you've written for other potential funders), please link to them here. You can also upload them below.

Manifold Market’s Seed Round Memo (WIP)

How long have you been working on this project, and how much has been spent on it?

We have been working on Manifold for the last 4 months, and this specific project for 1 month. We have not spent any money on it yet, but have set aside $50k for initial subsidizing of CPM’s. This comes out of an early $200k grant made from EA Funds’s Long-Term Future Fund.

What has been achieved so far?

We have determined how to implement CPM’s on the Manifold platform, written materials to introduce CPM’s to a general audience, and spoken to several people working in charitable organizations such as OpenPhil and Rethink Charity to assess the relevance of CPM’s to the grantmaking process.

Do you have any reservations about your project? Is there any way it could cause major harm? If so, what are you going to do to prevent that?

Scaled up, CPM’s may become a focus for political groups. In the best case, this would draw money out of politics and into charity. In the worst case, CPM’s could direct more money towards divisive charities. However, the first few tests of CPM’s will avoid this problem by using a pre-approved list of charities.


How much funding are you asking for?

$1-2 million

[optional] It can be helpful to provide a budget range: a minimal, mainline, and maximally ambitious version.

  • Low - $500k
  • Mainline - $1 million
  • Ambitious - $10 million

Can you provide a rough budget? (Either in text, or as a linked spreadsheet.)

Iteration 1: 3 rounds, 50k/round (150k total) to test different subsidy mechanisms. Each round would last ~1 month.

Iteration 2: 2 rounds 100k/round (200K total) to assess demand and identify technical problems with more users. Each round would last ~2 months.

Iteration 3: 1 round of $1 million over a longer period, to assess market properties at scale. This would last ~6 months.

Conditional on ambitious funding:

Iteration 4: 10 rounds, $1 million/round researching the use of CPM’s for institutional decision making, impact markets, and information bounties.

Is this a non-profit or for-profit?


If this is a for-profit, please explain the terms of the investment. (We’d strongly prefer that you keep it simple by using a standard YC SAFE. More complicated structures may take longer to review and/or be held to higher standards.)

We’ve already separately secured funding via the Future Fund Regranting Program, as a for-profit investment in Manifold’s main operations.

By when do you intend to have spent the money?

In roughly one year.

Will you ask for more money at that point? If so, how much might you ask for?

Yes. Assuming users are enthusiastic about CPM’s, we would ask for $5-10 million to distribute the following year.

What will it look like if your project has gone poorly / just OK / well at that time?

Austin notes: this is the section I'm least certain about; would especially appreciate feedback here.

Poorly: Few people use the matching funds, few new users join in order to participate

Just OK: People use the matching funds, users join in order to participate, but users cash out quickly rather than try to grow their donation via good forecasting.

Well: People use the funds, many new users join, and people actively bet in an attempt to increase their donations.

The metrics we’d track, along with our goals:

  • Number of users participating: 1k for our first round; 10k in a year
  • Amount of money donated by users: $10k for our first round; $1m in a year
  • Enthusiasm of users: Such that users would be vocally upset if we stopped supporting this
  • Effectiveness of user donations: Comparable to decisions made by OpenPhil
  • Public press: Familiarizing charitable donors with prediction markets, and prediction market enthusiasts with effective causes

How much $/yr could this project plausibly productively use at maximum scale down the road? Please explain your answer.

Once technical details are worked out, CPM’s are only limited by the total amount of charitable giving (~$500 billion/year) and the number of users interested in participating.

Even in the short term (~3 years), CPM’s could quickly become relevant for EA organizations and donors, and direct a significant fraction of EA funding, on the order of $100 million/year.

In the longer term, CPM’s will likely increase the volume of money directed towards charitable causes. In addition, CPM’s can be used to identify new charitable causes and reward work in these areas. With this combination of increased giving and better giving opportunities, it seems plausible that CPM’s could direct $1 billion/year, within 5 years.

About you

Who is applying? Please list your name(s) and location(s), as well as your LinkedIn(s) or personal website(s), if you have them. If this is a new project, please include this for all founders.


Austin Chen, San Francisco, CA. https://www.linkedin.com/in/austinch/

James Grugett, Austin, TX. https://www.linkedin.com/in/james-grugett/

Stephen Grugett, Austin, TX. https://www.linkedin.com/in/stephen-grugett


Sam Harsimony, US. Writes the eponymous blog Harsimony https://harsimony.wordpress.com/

Sinclair Chen, San Francisco, CA. https://www.linkedin.com/in/clarity-chen/

What, if anything, is your involvement with the effective altruism community? (50 words only)

Austin has taken the GWWC pledge; after taxes and rent, donations are his biggest expense. He reads the EA Forum obsessively and posts occasionally.

Sam has been active in the effective altruist community for several years. He posts regularly on the EA Forum, and has written for GWWC.

If this project is less than one year old: for each of the people listed on the project: what’s the most impressive thing you’ve done? (50 words each, only)

Austin honestly thinks Manifold is pretty impressive (it’s only been 4 months since we started!); if he had to choose something else, going from outside consultant to tech lead at Streamlit in 3ish months.

Sam uses his blog to highlight original, impactful ideas. He invented CPM’s, was the first to use the term “retroactive public goods funding”, and has proposed a simple, politically feasible approach to land value taxation which avoids the use of complicated appraisal systems.


If you had any other ideas you considered applying with, please list them — we might be interested in them, too. (100 words only)

We’d like to build Impact Certificates (aka Retroactive Public Goods Funding), natively in Manifold Markets. Public goods projects (e.g. open-source software; high-quality blog posts; speculative research) could issue shares on our platform. Investors could buy these shares, in expectation of a future payout from a philanthropist or community oracle.

See also: https://manifold.markets/Austin/will-manifold-implement-retroactive

Is there anything else we should know?

We’re still sad to have been rejected from the FTX EA Fellowships. Can we visit y’all in the Bahamas anyways?

Sorted by Click to highlight new comments since:

I am skeptical.

The market will mainly attract altruistic traders as you can only make altruistic gains. Further, prediction markets are for unusual people[1]. So we will end up with unusual altruistic donors.

I see two motivations for such donors: contributing to the information generating system and distributing money to grantmakers with better judgment.

Re: infogain. I am fairly skeptical about low-volume prediction markets being competitive to similar (in the number of participants) prediction pools. See https://bit.ly/arb-prediction-markets-vs-opinion-pools. But I am excited to try it and compare forecasts to predictions pools on other platforms?[2]

Re: allocation. For unusual altruistic donors, the upside feels small: the system reallocates the money of other unusual donors, so donated earnings are not fully contafactual. While money goes to people with better judgment, it's unclear that their returns/earnings would be higher than on other platforms like Polymarket, where money is non-altruistic.[3]

Lastly, I think the externalities are quite big for prediction markets (as opposed to prediction pools): markets require constant vigilance as with every update, you win/lose. Active traders will spend a lot of attention on their trades. This is especially bad given that traders are altruistically minded.[4]

(At the same time, I am fairly excited to see more experiments in the space.)

(I have/had a CoI as I applied/received a FF grant for work on epistemic institutions.)

  1. Even donor lotteries do not attract broad participation despite a strong case for using them. ↩︎

  2. Happy to collaborate message me here or preferably at mike.yagudin@gmail.com ↩︎

  3. This is another issue; even on fairly liquid Polymarket, a lot of things seem mispriced to me. Nuño and I bet there, so hopefully, these are not empty words. ↩︎

  4. Cf. donor lotteries. One of their aims is to cut research costs for donors. These costs are highest for donors with good judgment as their opportunity costs are the highest. ↩︎

Austin replied to the earlier version of the comment (my bad), which is similar in substance on the relevant market: https://manifold.markets/Austin/will-the-ftx-future-fund-decide-to

Thanks for your comment, Misha (and congrats on the FF grant)! I've been a huge fan of your work, especially your report on Prediction Markets in the Corporate Setting https://forum.effectivealtruism.org/posts/dQhjwHA7LhfE8YpYF/prediction-markets-in-the-corporate-setting

  1. Agreed that the marginal dollar moved between different weird altruistic donors is less impactful than winning a bet on Polymarket; but there are a host of usability issues in Polymarket (crypto onboarding, market availability, UX design) that we think we solve much better in Manifold. Over time, the long-term vision of this would be to draw in more charitable dollars from outside the EA community as well.

  2. The externalities of demanding constant vigilance are a good point, and something we do take seriously; I'd like to work out an interface/design a mechanism that allows a trader to input a true probability and be rewarded, without needing to check in on their position constantly. Maybe this just is being a prediction pool!

  3. I think prediction pools are quite promising, though I'm not sure if a good (easy-to-use, incentive-aligned) mechanism has been worked out; do you have any pointers to setups/implementations/designs of prediction pools that you think are good? I'm especially curious if these are framed in a way that allow a normal person (aka not superforecaster) to understand the system and meaningfully contribute.

Would love to chat more; happy to discuss in this thread, or feel free to find a time on https://calendly.com/austinchen/manifold !

(I am out of funds to reply to them there :P, this should be seen as foot voting for their platform as a whole.)

re: 1 — agree, MM is nicer than Poly. And I view UX as a very important issue for adoption (think of Robinhood).

re: 2 — would be great if you'd work that out!

re: 3 — I think just using the proper scoring rules (like log or Brier) is good enough; what are the problems with these? Smart aggregation (based on track-record and some other info) would allow leveraging non-superforecasters (likely through putting weight on prospective superforecasters). I think another way to participate in prediction pools and markets is to bring new information and considerations, this can be rewarded through Reddit's karma, r/changemyview deltas, or with StackOverflow upvotes (one interesting challenge is to figure that out).

Thanks for the kind words!

Donor lotteries are a good case study; they seem great (I sent my donations last year to the EA Funds lottery) but also very underutilized, which should be a warning sign for other kinds of weird altruistic schemes. I'm wondering how much of this is lack of promotion, and how much that the arguments in favor are too hard to grok. I'm also hopeful that the "skill" aspect of a prediction market makes it more attractive than a straight lottery.

3 -- There's two kinds of incentive alignment, I think?

First, there's "do I win the most points for putting down accurate prediction", and I think both proper scoring rules & prediction markets do a reasonable job of this? Possibly proper scoring rules do even better than markets here.

Second, there's "why do I care about points", which afaict is much harder to get right outside of prediction market settings. (This might be not standard usage of "incentive-alignment", for which I apologize). Metaculus, for example, is a positive-sum system, and it's not obvious how to pay people for good predictions through that. Metaculus does run cash tournaments on specific topics; my vague understanding is that the tournament structure encourages high-variance bets, in order to have a better shot at top prizes?

As a novice to the forecasting space, I'm sure I'm missing a lot of options; I'm very curious about which forecasting incentive structures work well in your experience!

Cool, I considered a project in this space before in 2020! You mention "Prediction markets can allow traders to legally put in real money." Are you aware that the CFTC has permitted Kalshi to operate a real-money prediction market? I ended up considering launching a second version of Kalshi for real-money forecasting for impactful areas (including various paths to either go through the CFTC or bypas it with various mechanisms), so people would have a direct financial incentive to participate. This mechanism is one of several I considered if someone wanted to get a real-money prediction market spun up with greater ease than going through the CFTC, and subject to less restrictions. I am currently working on other projects, but if anything related to real-money prediction markets is something anyone is interested in discussing, feel free to reach out!

Oh cool! Yeah, we're familiar with Kalshi - we've had a chance to chat with one of their founders!

Curious, was there any reason you ended up not pursuing either the CFTC or the charity route?

Sweet! So originally I was trying a non-CFTC mechanism to launch a real-money prediction market, but then Kalshi got CFTC approval, and then it felt less impactful to launch a second real-money market whether via the CFTC or via other methods I was considering. Although Kalshi might not be launching markets around social impact questions so there’s probably still a social impact opportunity there.

Also, I looked into the costs and complexity, and it seemed pretty high. I wasn’t sure if I wanted to commit to doing it and ended up deciding on working on other projects that also seemed impactful like “GiveWell for Impact Investing.”

Is there any way it could cause major harm?

Another concern is that subsidizing Manifold Markets with a lot of money could change the incentive landscape for forecasters in general, e.g. causing people who used to forecast on Metaculus to spend much less time there and more time on Manifold instead.

That could be the case! Although, this would only be harmful if 1) Metaculus provides really good forecasts 2) in a way Manifold could not. I'm curious which parts of Manifold feel less good for forecasting compared to Metaculus, and would love to see how we can improve.

I actually think the products are mostly aimed towards different segments, just due to the nature of complexity of the products; superforecasters will probably enjoy the power of modeling a specific probability distribution in Metaculus, while more everyday users will appreciate the simple buy YES/NO choices in Manifold.

Manifold feels like it has a lot of bad or mediocre questions, which are annoying to sort through. This is in part due to how anyone can submit any question. But even for the questions that try to be good, they often aren't as good as they would be if they were subject to the community feedback period that Metaculus has (allowing users to suggest wording improvements, better operationalizations, or improvements to the resolution criteria, etc.).

I don't like that even when I think the market price is wrong, it usually doesn't make sense to spend more than the M$ 20 loan on buying shares (due to how it can tie your money up for a long time). And it's hard to make money time-efficiently making only M$ 20 bets, so that usually means it's not worth spending time evaluating questions that you know it won't be worth betting more than M$ 20 on anyway. (Or if you don't care that much since it's not real money, on most questions you'll just be making quick, low-information M$ 20 bets.)

I also don't like that I can't easily tell with high confidence whether a given question will be reliably resolved accurately in a timely manner (due to resolution being done by the question creator without any other oversight).

The top trader leaderboard rank still doesn't seem like a very useful indicator of forecasting skill, which is what I think a leaderboard should try to signal. Metaculus's ranking over-weights participation in my view so it isn't great either, but it still seems a lot better than Manifold currently. (Manifold probably also over-weights participation.)

Hi - I think this synergises well with my idea that I've just posted here https://forum.effectivealtruism.org/posts/qFPQYM4dfRnE8Cwfx/project-a-web-platform-for-crowdsourcing-impact-estimates-of

Using real donated money instead of fake internet points would make the idea a lot cooler.

Yup, it's a really cool idea! If you'd like to chat more, please reach out: https://calendly.com/austinchen/manifold

I'm certainly curious to see how it goes! 

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