From Hayek to Polymarket to TurboFlow: A Century of Evolution from Prediction Markets to Event Contracts

How does a society know what it knows?

From weight guessing at the market to political prediction markets, and now to short-term Event Contracts that can be participated in on-chain at any time, event contracts have undergone a continuous evolution spanning over a century. The core remains unchanged: transforming people's differing judgments about the future into prices, which are then settled by the outcomes. What has changed are the events covered by the market, the barriers to participation, the trading cycles, and the infrastructure.

Looking back along this line, Polymarket has made prediction markets a global internet product, while TurboFlow has further brought event contracts into on-chain trading scenarios aimed at ordinary traders. The stages and product forms of the two are different, but they have jointly propelled the "trading future" from an economic experiment to a mainstream product.

I. 1907---1945: From "Collective Wisdom" to Price Discovery

The conceptual starting point of event contracts can be traced back to 1907. British statistician Francis Galton observed that when a group of people independently estimated the weight of an ox at a market, their collective judgment was very close to the actual result. This story was later summarized as "the wisdom of crowds": when participants possess different information and their judgments can form relatively independently, the aggregated result is often closer to the truth than that of any individual.

Later, economists began to ponder further: if market prices can aggregate information about the supply and demand of goods, can they also aggregate information about future events?

In 1945, Friedrich Hayek systematically explained the informational function of price mechanisms in "The Use of Knowledge in Society." Knowledge in the real world is dispersed among countless individuals, and market prices can compress these dispersed judgments and information into continuously changing signals. Following this line of thought, markets can not only price goods but also aggregate participants' judgments about future events through trading.

Event contracts apply this logic to future outcomes. Suppose a contract for "an event will occur" has a current price of $0.62, with a settlement of $1 if the event occurs and zero if it does not; then $0.62 can generally be understood as the market's probability signal for that outcome. Participants are responsible for their judgments with their funds, and new information continuously enters the price through trading.

Prices are still influenced by liquidity, participant structure, market sentiment, and trading rules, so they are better viewed as real-time market judgments rather than absolute probabilities. This principle has run through the subsequent development of event contracts.

II. 1988: Iowa Electronic Markets Turns Theory into Experiment

The important starting point for modern prediction markets appeared in 1988. Researchers at the University of Iowa created the Iowa Political Stock Market, which later evolved into the Iowa Electronic Markets (IEM), testing whether the market could improve prediction quality through contracts linked to the results of U.S. presidential elections.

The early market was small in scale, and the amount of participation was strictly limited. It proved an important point: even with a limited number of participants, as long as they were willing to trade based on new information, prices could form collective judgments of reference value.

In 1992, IEM received a "no-action letter" from the U.S. Commodity Futures Trading Commission (CFTC), allowing it to continue operating under small, research-oriented conditions. For the first time, event contracts had a relatively stable institutional space. For many years afterward, IEM's prices were often compared with polls, pushing prediction markets into the mainstream view of economic research.

III. 1999---2013: Intrade Proves Commercial Value but Exposes Regulatory Boundaries

After academic experiments, commercial platforms began to emerge. TradeSports and Intrade expanded tradable events to elections, economics, entertainment, and international situations, opening up to a broader user base.

Intrade's value gained attention during multiple U.S. elections. Media, researchers, and the public began to view market prices as another signal beyond polls. More funds and participants brought more active price discovery, bringing prediction markets closer to mainstream internet products for the first time.

Regulatory issues soon magnified. In 2012, the CFTC charged Intrade with providing unregistered commodity options trading to U.S. users. The platform subsequently ceased operations and closed in 2013. The experience left by Intrade was clear: event contracts have real demand, and long-term development requires compliance, clearing, and market infrastructure that match trading scale.

During the same period, event contracts also touched on ethical and public interest boundaries. In 2003, the Policy Analysis Market project, funded by the U.S. Defense Advanced Research Projects Agency, attempted to predict political and security changes in the Middle East through the market. The project was quickly canceled due to public controversy. This incident reminded the industry that whether contracts can be traded also depends on the design of the underlying assets, public interest, and social acceptance.

IV. 2014---2020: Restricted Markets Continue, Crypto Infrastructure Begins to Mature

After Intrade's closure, IEM and restricted markets like PredictIt continued to provide trading for political events. They preserved the research and product spark of prediction markets, but user scale, single transaction amounts, and market numbers were constrained.

On the other hand, stablecoins, smart contracts, on-chain wallets, and automated market-making gradually matured. Event contracts began to have a new technological foundation: global users could trade in a unified network, rules and settlement processes could be written into smart contracts, and markets could operate around the clock.

This laid the groundwork for the next round of growth. Prediction markets began to shift from "websites maintained by a single institution" to composable, verifiable on-chain markets.

V. 2020---2025: Polymarket Takes Prediction Markets Global

Polymarket launched in 2020, providing event markets around themes such as politics, macroeconomics, technology, sports, and culture using stablecoins and blockchain infrastructure. Users trade "Yes" or "No" shares, with prices changing according to supply and demand, and settlements completed once event outcomes are determined.

The changes it brought are first reflected in the distribution method. Prediction markets transformed from regional products to global internet products, and market prices could be quoted in real-time by media, researchers, and social platforms. During the 2024 U.S. presidential election, Polymarket gained unprecedented public attention, and event contracts became a high-frequency data source in global news discussions for the first time.

Polymarket's development also accompanied compliance adjustments. In 2022, the CFTC reached a settlement with it regarding the provision of unregistered on-chain event contracts and required it to address non-compliant markets. Since then, Polymarket has continued to build a path into regulated markets.

In 2025, the parent company of the New York Stock Exchange, Intercontinental Exchange (ICE), announced an investment of up to $2 billion in Polymarket and plans to distribute its event-driven data. This collaboration is symbolic: event probabilities formed by market trading are beginning to be viewed by traditional financial infrastructure as data products that can serve institutional clients.

Polymarket has completed an important migration in the history of event contracts—from academic research, vertical communities, and gray areas to the global mainstream financial and media landscape.

VI. Kalshi and the Expansion of Regulated Markets in the U.S.

Parallel to the on-chain path, Kalshi chose to start from a regulated exchange. It became a designated contract market registered with the CFTC in 2020 and launched event contracts around economic data, weather, politics, and sports outcomes.

In 2024, a U.S. federal district court overturned the CFTC's ban on Kalshi's election contracts. In May 2025, the CFTC withdrew its appeal, concluding the related case. This propelled the rapid expansion of the U.S. event contract market and brought new discussions on federal and state regulation.

Entering 2026, event contracts have formed multiple parallel paths: regulated centralized markets, on-chain prediction markets aimed at global users, and short-cycle products designed around price changes. Different products correspond to different types of information, participation methods, and risk structures.

VII. From "Predicting Public Events" to "Trading Market Outcomes"

The product boundaries of event contracts are expanding. Early markets mainly answered questions like "Who will win the election?" or "Will a certain policy pass?"; new products can also answer questions like "Will the BTC price be above or below the current level after a specified time?" Both types of contracts transform uncertain outcomes into clear conditions and settle according to pre-announced rules after expiration.

The information they aggregate is different. Political and macro event markets absorb news, research, and public information, with cycles typically longer; short-cycle price events absorb real-time quotes, volatility, order flow, and traders' directional judgments, making them closer to high-frequency market trading.

This evolution has made event contracts a universal product structure. Users do not need to deal with complex position parameters and can express their views around clear outcomes. The product experience has thus extended from "finding a worthy event to predict" to "quickly expressing directional judgments in familiar markets."

VIII. TurboFlow: Event Contracts Enter Retail On-Chain Trading Scenarios

The event contract market is evolving along different paths: one type of platform emphasizes institutional building and regulatory frameworks to enhance market credibility; another type emphasizes global accessibility and on-chain execution, using open and transparent mechanisms to reduce regional and infrastructure limitations; while another type is beginning to explore shorter cycles and event products closer to trading scenarios to lower participation thresholds and improve capital efficiency.

TurboFlow represents the third type of exploration. It is an on-chain trading platform aimed at global retail users, integrating Perpetuals, Event Contracts, and Prediction Markets within the same trading ecosystem, attempting to make professional trading products simpler and more accessible.

In TurboFlow's event contracts, users can make judgments about the price direction of assets like BTC, ETH, and gold after a specified period. Participation starts at just $2, with a trading round completed in as fast as 30 seconds. Clear directional choices, defined expiration times, and pre-displayed potential outcomes lower the understanding and operational thresholds.

TurboFlow also integrates event contracts into a complete trading ecosystem. Users can choose short-cycle Event Contracts based on market views or use perpetual contracts to manage longer-term directional exposures.

At the market infrastructure level, TurboFlow introduces professional market makers to provide liquidity and supports a more market-driven trading experience through on-chain transparent execution. Its product direction continues the price discovery logic emphasized by Hayek: the judgments of different participants enter the market, and prices and odds change with supply, demand, and information.

TurboFlow and Polymarket showcase two typical scenarios of event contracts. Polymarket allows users to trade public events in politics, economics, and culture, while TurboFlow further covers short-cycle market outcomes and connects event contracts with perpetual contracts. As a result, event contracts have a broader time scale and reach more users with different experiences.

IX. After Event Contracts Go Mainstream, What Remains Important

Looking back at this history, the long-term value of event contracts comes from three elements.

First, rules need to be clear. The underlying assets, observation times, data sources, and settlement conditions should be clearly presented before trading.

Second, markets need liquidity. The number of participants, market-making quality, and order depth will affect whether prices can timely absorb information and will also impact users' actual trading experiences.

Third, risks need to be correctly understood. Binary outcomes mean that gains and losses concentrate at the settlement point, and short-cycle trading will amplify the impact of volatility and timing judgments. Market prices and odds express the judgments formed by traders under specific rules and liquidity environments and cannot be taken as guarantees of outcomes.

These principles connect IEM, Polymarket, Kalshi, and TurboFlow. While technology and interfaces continue to change, credible rules, transparent execution, and sufficient liquidity remain the foundation for event contracts to scale further.

Conclusion: From Information Markets to Everyday Trading Entry

From the crowd guessing in 1907 to Hayek's explanation of price mechanisms; from the Iowa Electronic Markets in 1988 to Polymarket bringing prediction markets onto the blockchain, and then to TurboFlow integrating short-cycle Event Contracts with perpetual contracts on the same platform, event contracts have completed a long-term evolution from ideas, experiments, markets to products.

This history also reveals the reasons for the continuous growth of event contracts: people always need a simple way to express their judgments about the future. Today, event contracts can cover political outcomes months in advance and can also cover market directions in 30 seconds. The time scale has shortened, participation methods have become lighter, and the logic of price discovery continues to persist.

If traditional prediction markets mainly aggregated participants' judgments about the future through medium- to long-term event trading, today's short-cycle event contracts further extend this mechanism to shorter time frames and higher frequency trading scenarios. For TurboFlow, this evolutionary path points to a more specific goal: to enable more ordinary users to participate in transparent, understandable, and on-chain trading supported by real market liquidity.