Weekly Roundup 10/30/26 (Prediction market election hiccups, Hyperliquid onshoring, pubcos push back at tokenization, agents are using stables) (EP.747)

Prediction markets and polls both missed elections in Brazil and Israel: Bolsonaro lost by a wide margin despite market expectations, while Netanyahu won after being priced as a major underdog. The hosts said Brazil could have been an unlikely outcome rather than proof the market was wrong, but they lacked key information about who traded and how much they risked. At recording time, Polymarket put Democrats’ chances of winning both chambers of Congress at 67%, the House at 93% and the Senate at 68%. The hosts said polls would have to be badly wrong for Democrats not to sweep, while noting that U.S. polls are commonly thought to underrate Republicans and that it was uncertain whether that pattern would hold.

The hosts warned listeners not to use Polymarket after a reported exploit through a third-party service provider drained user balances, with about $2.6 million reportedly taken. They also discussed the unresolved fight over whether the CFTC or states can regulate event contracts, and one host expected the dispute to reach the Supreme Court. Kalshi reportedly raised $1 billion at a $40 billion valuation, with Sequoia, Wellington, Tiger Global and Dragon among its investors. Utah charged Kalshi and its founders with 13 felonies, the second state to bring criminal charges; the CFTC sued Utah to defend federal jurisdiction. The hosts expected Kalshi might be unable to operate in the state.

TradeXYZ said ICE is investing in the company and will help launch a U.S. exchange and clearinghouse for 24/7 Hyperliquid-based perpetual futures. Offering the product to U.S. customers depends on CFTC approval. TradeXYZ also announced an investment by Stanley Druckenmiller, and Hyperliquid was reported to have risen substantially following the announcements. The proposed exchange would bring a U.S.-regulated route to this product, but its availability remains contingent on regulatory approval.

A Wall Street Journal full-page ad warned public-company CEOs that crypto firms could tokenize their shares on unregulated venues. The hosts said the venues discussed operate under an SEC exemption and face volume limits, so they are not yet scaled competitors to the New York Stock Exchange. The American Bankers Association was among the donors to the conservative-leaning 501(c)(4) that organized the ad. About 30 companies had reportedly opted out of tokenized stock venues, and Nasdaq was calling customers to encourage them to do so. Under the process described, companies receive physical notice and have 30 days to opt out. The hosts said companies may decline because they do not want to manage new-market operations or data feeds, and they did not expect major price dislocations.

Y Combinator continues to solicit crypto startups and says tokenization could extend beyond dollars and stocks to startup equity and micro-securities. Instinct added stablecoin-denominated payments through a Stripe integration. The hosts said software agents may make smaller, more frequent payments than people, potentially making stablecoins useful for machine-to-machine transactions and tiny, real-time digital services where payment finality matters. That use case depends on agents actually needing to transact at this scale, but the payment pattern could differ materially from ordinary consumer payments.

Google unveiled an MPC custody product for financial institutions, which one host said could support stablecoin and tokenized-real-world-asset transfers. The host said the product did not appear to be post-quantum and that post-quantum MPC across blockchains would be complicated. Speakers also said current quantum hardware is not an imminent threat to Bitcoin.