The internet revolutionized the free flow of information. Crypto enabled the frictionless transfer of value. Yet despite these transformative technologies, a key piece has been missing: an efficient marketplace for exchanging information in return for some form of value (and systematically eliciting valuable information at scale). With this global primitive in place, Aalps Protocol reimagines market efficiency at a whole new level.
To understand Aalps' approach, it's important to recognize the proven effectiveness of prediction markets. By allowing open trading on future outcomes, prediction markets incentivize the aggregation of information and have a track record of producing remarkably accurate forecasts. We’ve seen time and time again prediction markets fairly pricing in new information.
In the crypto era, perpetual futures have emerged as a particularly powerful prediction market design. Perpetuals, in essence, are rolling prediction markets with margins. At $t=0$, you make a conviction bet on the price of the underlying index price at $t=1$ either as a 3x leveraged long or 2x short. You can keep your positions open on a rolling basis as long as you pay (or receive the funding fee) every eight hours (1 hour in others). You can read more about perpetuals at [Aalps Research 01] What Is Perpetual Futures? (ELI5 with Intro Resources)
However, even the most advanced prediction markets today still primarily rely on public information. The truly valuable insights - real-time, private knowledge held by industry insiders and experts - remain largely untapped. This is the next frontier that Aalps aims to conquer.
Efficient markets are rarely hard to achieve, that’s why there are different levels of “efficient” market for the original Efficient Market Hypothesis — check out our previous post about efficient markets: [Aalps Research 05] The Path to “Efficient Markets”.
Using crypto as a coordination layer, Aalps is constructing a decentralized network where information sellers can directly connect with buyers and monetize their private insights for the first time.
Imagine an oil executive who learns of a major new discovery, a tech entrepreneur who sees signs of a breakthrough product gaining traction, or a farmer who detects ideal weather conditions for a bumper crop. On Aalps, they can easily report this information and auction it to interested buyers, earning income while making the broader market more efficient.
Information design is a key here, and our research team is dedicated to explore a incentive-compatible tendoring mechanisms to make sure the protocol provides a post-facto way that suites various preferences of information buyers and sellers. For example, maintaining a review system for keeping track of the credibility of informants (e.g. using zkTLS) could be a potential design.
By turning these real-time information streams into tradable products, Aalps is creating a global information marketplace. Private insights that were previously siloed and untradeable can now be efficiently priced and disseminated. The result is a step-function change in market intelligence and efficiency.