Formation Markets External research programme
Seeing Like
a Market
The Formation Markets team has been at the forefront of market formation and institutional risk transfer using event contracts and perpetual futures.
Our work includes the first papers dedicated to institutional risk transfer through modern prediction markets, the first company KPI app and the first live SMB hedging app.
Featured in Fortune.
Institutional risk transfer and frontier capital markets
Alex Gheorghe’s analysis discusses Formation Markets’ approach and credits Lauris with the “frontier capital markets” framing.
Blanket and event-market risk management The State Risk PremiumCites original SLAM and discusses its empirical pipeline.
Interactive research
The Formation Markets team builds tools for market structure, business hedging and company KPI derivatives. Explore Statebook, Blanket and Hedgebook.
Statebook
Markets organised by terminal payoff.
Statebook makes the Formation Markets team’s payoff architecture explorable. Compare direct claims with constructed routes, inspect the residual exposure and see how separate contract books connect through the payments they deliver.
Blanket
The first live SMB hedging app built around prediction markets.
We built Blanket so businesses can describe a risk, find relevant live Kalshi contracts and model the remaining exposure. Its market-gap view shows where demand calls for new contracts.
Hedgebook
The first interactive app for company KPI derivatives.
We built Hedgebook to connect company operating performance with live event contracts. Explore company dossiers, KPI definitions, contractual payoffs and traditional-market analogues—and inspect how each claim fits the underlying business exposure.
Working papers
Four papers from the Formation Markets team on market structure, matched exposure, public pricing and legal claim formation.
Markets for All States of the World: Market Structure Organized by Terminal Payoff
We propose market structure organised by terminal payoff, allowing interval claims to trade without their own order books. The paper connects payoff construction to execution, funding, regulatory access and offsets that survive close-out.
Event Contracts and the Cost of Matched State Exposure
Event contracts and conventional derivatives can deliver closely matched terminal exposure through different routes. We define the Matched-State Wedge and compare execution, funding, operating and settlement costs using a fixed June 2026 comparison.
The Observability Wedge: Public Addressability and Relational Integration of State Prices
A claim can have a public quote before another instrument independently prices its payoff. The Observability Wedge separates public addressability, independent pricing routes and participants willing to trade.
From Exposure to Claim: The Formation of Frontier Financial Markets and ISDA
Institutions may have capital and a reason to trade yet lack a claim they can use. Through compute rental protection, company sales and GPU financing, we examine how parties negotiate usable claims under ISDA, and how software agents could reduce the work of developing and reusing them.
Event Contracts
and Market Topology
The Formation Markets team’s original SLAM paper established the programme’s institutional risk-transfer thesis. Presented at the inaugural Kalshi Research Conference in March 2026, it connected prediction markets to the wider architecture of derivatives markets.
The original Explorer’s 87 event contracts.
Execution cost · Wedge · Asset class
Discuss the research
with Formation Markets.