Burgeoning prediction market platform XO Market has announced it has raised $500,000 in pre-seed funding, led by investors Delphi Ventures and Cyber Fund. Self-described as a “permissionless conviction” marketplace, where users create their own markets, XO Market will open its alpha testing phase this week.
XO Market co-founder Ali Habbabeh shared the news of the raise on LinkedIn, writing:
“Today, I’m proud to share that XO Market has raised its pre-seed round, led by Delphi Ventures and cyber•Fund, with participation from some of the sharpest minds in web3. We’re not just improving prediction markets, we’re moving beyond them. We call it a Conviction Market: A platform where anyone can trade what they believe, create their own markets in seconds, and get rewarded for driving attention and insight. It’s fast, social, expressive, and built on its own sovereign rollup powered by Celestia Labs.”
Other tech- and crypto-focused investors boost XO Market
Venture capital firm Delphi Ventures commented on its latest investment on X, saying they were “proud to back (Habbabeh) and the (XO Market) crew in their mission to make prediction markets more expressive, accessible, and creator-driven.”
User-created conviction markets are here.
Have a contentious topic in mind?
Spin up a market, seed it with minimal liquidity, share with friends. Liquidity builds as people trade, and you earn fees. Simple.Fast AI resolutions, with human juries only if needed.
We’re proud to… https://t.co/ewHwhu3gY8
— Delphi Ventures (@Delphi_Ventures) July 2, 2025
On the XO Market blog, the company says the funding will help its alpha testing. Invite codes are being given out by XO Market via Zealy, Discord and X. Habbabeh says invitees will get test tokens to use and points earned will carry over when the platform launches to “shape their future standing in the XO community.”
Other ways the funding will be used include:
- Increase product and engineering staffing
- Invest in improving UX and infrastructure
- Develop strategic partnerships
The pre-seed funding round was also supported by other tech- and crypto-focused investors, including:
- Binary Builders
- SunDao Ventures
- Tea-club by Echo.xyz
- IYKYK Syndicate
Angel investors participating in the pre-seed funding include ex-Binance investor specialist Batux and Enso Finance founder Connor Howe, as well as Nick White and Ekram from Celestia, the modular blockchain network upon which XO Markets is being built.
In the wake of the funding news, White praised XO Market’s innovative approach on X, writing, “Prediction markets are due for an upgrade.”
Prediction markets are due for an upgrade
XO Market will enable anyone to create their own markets, trade with any token, and benefit from AI powered market resolution, all powered by Celestia underneath. https://t.co/ZghkgUmfEa
— Nick White 🦣 (@nickwh8te) July 1, 2025
A ‘decentralized alternative’ to traditional prediction marketplaces
XO Market was created as a decentralized alternative to big-name prediction market exchanges like Polymarket, which XO says act as “gatekeepers” that restrict the creation of markets to “centralized administrators.” Habbabeh says he felt traditional prediction markets were “boring,” limited to major events only and prone to potentially unfair market resolution, an issue that has plagued Polymarket and others on occasion.
Habbabeh wanted to create a prediction platform that was “social, emotional, and fair,” a space where users could create their own markets, no matter how niche, similar to what free-to-play prediction market platform Manifold offers.
XO lets users create markets quickly with AI assistance, allowing them to set outcome criteria and specify their fee tier. AI is also used for fast market resolutions, determining outcomes based on the creator’s parameters (human intervention is instigated if necessary), and you can also use an AI agent to trade for you.
Market creators earn more as trade volume increases, providing an incentive to create interesting markets and attract participants.
Here’s a market example featured on the XO Market blog:
“Imagine you’re convinced that your favorite game will release a new update by the end of this month. You create a conviction market titled ‘New feature coming out this month.’ Other people who share or disagree with your belief can then buy or sell shares in the outcomes you added to this market. As they trade, the price of shares in each outcome changes in real-time to reflect the crowd’s consensus.”
Additional financial incentive could draw traders
When the XO Market beta phase launches, users will be able to deposit and withdraw funds using fiat currency or a variety of crypto tokens.
By letting users create their own markets, XO Market will let everyday people turn their “hot takes” on questions perhaps previously limited to internet discussions and debates into a chance to earn real money.
The ability to profit not only from trades, but also market creation, could help attract traders from traditional platforms, particularly those who trade using crypto.
