The Future of Prediction Markets and the Japanese Market: Insights from Limitless CEO at WebX2026

At the Limitless stage of WebX2026, CJ Hetherington, CEO of the prediction market platform "Limitless," spoke with Asif Hinza from the Asia Web3 Alliance Japan as the moderator. They discussed the background of the growth of prediction markets, regulatory responses in the United States, and prospects for the Japanese market.

CJ Hetherington is the CEO and co-founder of the prediction market platform "Limitless," built on Base, which has recorded a monthly trading volume of $1.6 billion and annual revenue of $20 million. He also oversees "Limitless Research," an independent research and analysis desk aimed at public education on forecasting.

The session began with CJ Hetherington sharing the story behind the founding of Limitless. In 2023, he was living in Ukraine. Following the outbreak of war, he initiated a nonprofit fundraising campaign that raised $10 million in humanitarian aid. Before starting Limitless, they had developed a consumer app called "Reface," which became a massive hit in 2020, reaching number one on the App Store and Google Play in over 100 countries, with downloads reaching 300 million. During a lunch with the CTO of Reface, he expressed a desire to create an economic system where autonomous AI agents compete to determine the truth of information on the internet.

The mechanism involves high-accuracy AI agents receiving capital returns like investment funds, while those with low accuracy or attempting to manipulate the market are eliminated as they cannot recover their computational costs. Upon hearing this, CJ Hetherington realized that prediction markets are the optimal foundational infrastructure to realize this mechanism.

In recent months, the notional trading volume has reached approximately $1 billion, including filtered transactions identified as fraudulent wash trades. Other exchanges typically do not perform such filtering, but our monitoring system excludes transactions identified as suspicious from public endpoints. Last month, the filtered trading volume, excluding wash trades, was about $600 million, with a cumulative total in the tens of billions of dollars in notional terms.

Many contracts traded in the global market involve short-term predictions about Bitcoin prices and stock and commodity prices. Sports, particularly soccer, are also covered, with excitement around England's victory heightened by the World Cup. The eSports category is also experiencing rapid growth.

Currently, the U.S. market is undergoing a 180-day review period by the CFTC (Commodity Futures Trading Commission). It is undergoing strict scrutiny regarding the technology's mechanisms, monitoring systems, compliance, methods for monitoring and preventing insider trading, anti-money laundering measures, and customer management. Limitless is not currently available in the U.S., but when it receives approval to launch, it plans to focus on products for institutional and qualified investors, emphasizing hedging and risk transfer rather than retail.

Limitless has not yet entered the Japanese market. Currently, it is focusing on "Limitless Research," which provides analysis, forecasting functions, and educational content related to prediction markets, but it is not operating a product in Japan. As the regulatory environment develops, they aim to engage in dialogue with regulators and companies to find ways to bring value to the market. They believe that prediction markets are a very powerful tool for hedging and risk transfer. The Japanese financial industry is large, but traditional risk transfer products like interest rate swaps and credit default swaps are complex and difficult to price, with significant reliance on back-office operations and intermediaries. Most transactions are over-the-counter (OTC) without exchanges. If there were simple and clean risk transfer methods like prediction markets, they could fill gaps in portfolios and protect assets from sudden market changes.

CJ Hetherington noted that there are two main modes for prediction markets. One targets general consumers with smartphone-based prediction products. The other is for institutional and qualified investors to hedge gaps in their portfolios that cannot be addressed by existing stock and commodity markets using binary prediction markets as a risk transfer tool. He believes starting with regulatory sandboxes and proof of concept (PoC) through industry consortia is a realistic approach in Japan.

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