I always like the TikTok market. I've liked it for like a year or two now. The TikTok ban — yeah, it just keeps flipping, and you know, they keep fighting over it, and you know, it's been part — it's been really volatile, and it's one of those sort of unique — I mean, the election, a lot of people, you know, obviously get excited about the election because everybody cares, and you know, but there's a lot of resources that are put into sort of forecasting elections for better or worse. But something like TikTok ban is something that you just really couldn't price before. I mean, it's just really one of those things that was really left to a dinner table at Thanksgiving, and it's like, you know, your uncle's opinion was the only thing you had to rely on for this. So I really like these sort of markets that like are truly out of — I mean, they're very important. Like this is something that is actually really important. I mean, you have a whole swath of the economy that could just get eradicated on the other side, you know, if the other side is right, like our kids are being manipulated by China. So like it's something that's pretty important that we didn't have any sort of gauge of what was going to happen before, and so I like this market a lot.
Yeah, a few things. I mean, it's like super different, but I mean, we'll start sort of a little bit of the history. But I went to MIT. We both — Lana, my co-founder, and I — we're not the sort of entrepreneurial product type. I mean, Ethan, I don't know, you started a company at 18, 17, looks like it's crazy. I thought I was young, started mine at 22. So, you know, that was cool outside of this room, I guess. But like, we were not product builders or entrepreneurs, or even trying to — we were just going to go into trading. That's the thing that was exciting. I was like a math geek. In some ways I still am. But you know, when I spent time at Goldman, I spent time at Citadel, and the thing that I was naturally gravitating to — so I liked trading, but I found myself obsessing more over things like, why are we even trading this thing? You know, I found it fascinating that you could walk in — and I encourage anyone to do it. If you haven't walked into a trading floor, you should do it. It's kind of a weird experience where you walk in and you see like hundreds of people that are getting paid, you know, something like seven-figure salaries to trade something called swaps. Like, it's so — like, how do you even get here? What even is a swap? So like, it was interesting, and then I really liked thinking about like, what was financial history? How do we get to things being the way they are, and how do we develop all these financial instruments? Why are we even trading them?
And then number two, and you know, this example I always like to give: in 2016 I was an intern, I was very young, so, you know, pretty naive, kind of asking all these questions. And the thing I noticed at the trading desk that we were in is like all these clients — the sort of hedge funds, institutions, you know, kind of these what you consider very fancy traders, so it's not like average retail individuals — they didn't have a view on the instruments, on the financial markets like you would traditionally think about, like equities or credit or bonds or whatever. They had a view on whether Brexit was going to happen or not. So that was a big chunk of people, and then they had a view on Trump, whether he was going to win or not. And it was these sort of discrete events, and they wanted to either get exposure to those events — so, you know, bet on these events — or hedge against them. And so what we would do as like a typical investment bank is like we would sell them a bundle that was super expensive, very opaque, and kind of not really fit for purpose, but we'd sell it very well so they'd buy it. And so a lot of people — one example, very simple one, is like we'd sell these sort of option structures that were effectively a short an S&P — it's like, if Trump wins you should short the S&P. Obviously Trump won, so they were right, but then the S&P, you know, rallied, so they all lost money.
And so there was this sort of simple idea, which is like, you know, what if we sort of built a financial market for the thing that they're asking about — like this simple question, like, will Brexit happen? You know, that you could actually price that. And if you structure that market and like people get paid $1 if it does and zero if not, then effectively the price at which it's trading — like let's say that people are buying at 50 cents — is actually the forecast, the probability, the chance that this event happens. And so we got really excited about this idea because one, if you could build that, it should in theory be one of, if not the largest financial market, because it's the broadest. It's capturing the largest universe of things. And two, it would also be very useful because then you have this notion of you're aggregating the wisdom of the crowds and you're having people with real skin in the game being paid to forecast the future. So it's just making us all smarter about the future, and that felt like a very worthwhile thing to build. So we decided to do it. It was illegal at the time, and we can talk about that. But...
