The Rise of Asymmetric Returns

People love the lottery, and even prediction markets—where users pay to vote on probabilistic outcomes of future events, with winners taking the losers' stakes—have now surpassed it in trading volume (US sports betting hit $13.7 billion in a year, while prediction markets have already reached $10 billion in just one month).

The root cause of the prediction market boom is societal anxiety and despair.

(1) The wealth-transfer mechanism has broken down. Getting rich through regular work is becoming increasingly unlikely. Wage growth lags behind consumption growth, personal debt is rising, and while asset prices (stocks, gold, real estate) are also climbing, only those who already own assets benefit. For poor people who can't afford to allocate capital into these assets, they simply grow poorer.

(2) The traditional life script has also broken down. The old model was: join a big company, show up on time every day, work hard, stay loyal, and you'd be rewarded after years of service. You'd get promotions and bonuses, plus a pension in retirement. That model no longer works. Companies now operate with short-term horizons, and few firms survive 20 years—let alone guarantee your job. Lose your current position, and re-employment becomes very difficult; past experience often holds little value.

(3) AI has accelerated both trends. AI compresses time. Previously, you might have had five years to build something; now it feels like you must deliver results in one year, or it's already too late.

(4) Social media ensures people are never satisfied with their current situation. In the past, your reference group was limited to the people around you. Now it's the entire world. Every day you see high-income earners, people making money easily, and luxurious lifestyles—and no matter what you've achieved, it always looks like your life isn't good enough.

(5) The result is that more and more people lose patience. They no longer believe in long-term commitment or the fantasy that years of grinding will lead to a fulfilled life. Society doesn't reward patience either—why struggle for 20 years for a promotion that might not even exist in 10? What people want is a fast track out of daily hardship, and越快越好 (the faster, the better).

In this mindset, people's risk tolerance shifts. To escape their situation quickly, taking a shot at a riskier option seems like the more rational choice.

The odds of failure are high, but you only lose a small amount of money. The odds of success are low, but if you win, the payoff is huge. Simply put: small losses, massive gains.

This is asymmetric return, and products built on this model may become the next major breakout opportunity.

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