X Cooperating with Polymarket, Musk is one step closer to the "Everything App"

Author: shu, BlockBeats

The division battle between Musk and Trump is still continuing.

A few days ago, Polymarket founder Shayne Coplan announced that Polymarket has become the "official forecasting market partner" of social media giant X and its artificial intelligence team xAI. The collaboration combines X platform data with Grok's analytics capabilities to provide millions of Polymarket users around the world with immediate context and data-enabled insights.

Currently, Grok is using Polymarket’s data to predict uncertain events in the real world. However, it is not clear how this collaboration will change the user experience for X users.

The collaborative promotion happened just the day after Musk and Trump publicly confronted each other on social media. Just two weeks ago, X Platform had once been in contact with Kalshi with similar cooperation matters - it is worth noting that Trump's eldest son, Donald Trump Jr., is a senior adviser to Kalshi.

Considering the connection between Kalshi and the Trump family, this cooperation not only has product-level significance, but is also interpreted as another in-depth test of Musk's reconstructing political relations, expanding financial infrastructure, and promoting the vision of "super application".

According to a press release released by Polymarket, the two parties will launch a series of jointly developed integrated features and unique experiences.

The protocol content shows that X will provide data-driven insights to Polymarket, and the prediction results of Polymarket will be back-feeded to the X platform, combining real-time interpretation from Grok and related X posts to achieve an "interpretable predictive data flow".

X CEO Linda Yaccarino said the collaboration will bring more value to X users who already use Polymarket: “Polymarket achieves extremely high transparency through the forecast market and has become an important source of real-time information for many X users. We are excited to partner with Polymarket and bring our data and technology to their users through a range of innovative product integrations.”

Currently, Polymarket’s monthly trading volume has gradually increased after the election.

Why Polymarket?

Although Polymarket is one of the most popular forecasting market platforms right now, it is still banned in the United States. In January 2022, the CFTC found it illegally operated an unregistered trading platform and fined it $1.4 million.

Vincent McGonagle, acting director of law enforcement at the CFTC, said: "Party participants (such as Polymarkets) should actively communicate with regulators to ensure that the market remains sound and transparent, and provide customers with protection under the Commodity Trading Act and relevant regulatory regulations." The CFTC also sent a "stop and terminate" letter to Polymarket, making it unable to operate legally in the US market. This also makes X's cooperation with Polymarket particularly eye-catching - especially considering that Kalshi has been approved to legally operate the forecast market in the United States.

The breaking continues

The current conflict between Musk and Trump is obviously difficult to separate from this new cooperation. As mentioned earlier, Trump's eldest son, Donald Trump Jr., is a senior adviser to Kalshi, and the platform has previously discussed similar cooperation with X.

Although such a large-scale collaboration is usually impossible to finalize within a day or two, Kalshi’s potential collaboration with X did have “official announcements—cancellation” within a day.

In May this year, Bloomberg reported that Kalshi was negotiating a cooperation with xAI, including leveraging xAI's capabilities to provide Kalshi with "customized AI insights." At that time, Kalshi CEO Tarek Mansour said on social media: "I am very excited to announce that Kalshi will soon cooperate with xAI to accelerate the forecast market's mainstreaming."

But this joy was fleeting, and the relevant statement was deleted on the same day, and there has been no follow-up so far.

This made X decisively turn to Polymarket, which has not yet obtained US compliance license, which is full of symbolism in both public opinion and political contexts. Against this background, why did Musk choose to cooperate with Polymarket in an "illegal" state?

In the short term, this may be just a counterattack on Kalshi's "turning to Trump"; from a long-term perspective, this may be a step for Musk to challenge the existing regulatory paradigm and build a "borderless financial instrument" for X. He obviously does not want his super application path to be slapped by the rhythm of traditional financial compliance.

X's financial ambitions: From payment systems to forecasting markets

In fact, X has a long history with financial services. As early as 1999, Musk founded X.com, trying to build an online center for global financial transactions. The company later merged with Peter Thiel's Confinity to give birth to PayPal. Although Musk was expelled from the board of directors and PayPal eventually became the main brand, he never gave up on the concept of "X". In 2017, he bought the X.com domain name from PayPal, saying it is "emotional value". Five years later, he acquired Twitter and integrated it into X Corp to restart his former vision.

"If you just want to be a niche payment system, PayPal is more suitable; but if you want to take over the global financial system, it's a must." This is what Musk left in "The Legend of Musk". He never concealed his ambition to build X into "Western WeChat" - a super platform integrating social, payment, content, information and identity.

Predicting the market is a new puzzle for X to move towards this goal. Polymarket's data structure and user behavior are highly complementary to the real-time public opinion of the X platform, the AI ​​analysis engine Grok, and the possible future XPay payment system. Musk obviously hopes that after incorporating Polymarket into the ecosystem, it can capture social trends, public opinion tendencies, and even market sentiment from user-generated data, and form commercial and actionable financial products.

The collaborative release clearly states that Polymarket prediction results will combine Grok AI's semantic understanding capabilities to generate "interpretable predictive data flows" to provide X users with real-time context data insights. This provides a practical sample for the long-term narrative of "AI×financial×social".

At the same time, X is also accelerating its expansion at the product level. On June 1, Musk announced the launch of the XChat system, focusing on end-to-end encryption, automatic information destruction, file transfer in any format and cross-platform audio and video calls, and claimed that it adopts the "Bitcoin encryption" architecture and is developed by the Rust language. Evolving from social messaging tools to integrated platforms, X is rapidly approaching the structural prototype of WeChat.

Combined with the previously launched content creators' income sharing mechanism, protests against Apple's in-app purchase commission policy, and providing advertising rebates to Twitter Blue users, it can be seen that Musk is building a closed ecosystem "from content to payment". The forecast market is expected to become one of the earliest data product lines in this ecosystem to achieve profitability.

Musk once stated that "the cryptocurrency of X will never be issued", but this does not prevent him from continuing to promote the testing of on-chain financial functions. From the perspective of payment logic, the combination of prediction market and crypto assets has natural advantages - trustless, quantifiable, and combinable, which is consistent with the Web3 toolchain. If X launches a system similar to XPay in the future, Polymarket may also become part of the embedded functional module, which is also complemented by the trend of the macro environment gradually being crypto-friendly.

Polymarket can be hyped

As a blockchain-based prediction market platform, Polymarket has not yet issued native tokens, which makes many users of the crypto community look forward to its future launch of tokens and airdrops.

UMA

At the same time, the market is also looking for direct hype targets related to this. UMA is the core oracle of Polymarket, used to settle the results of the market. Polymarket relies on UMA's Optimistic Oracle to ensure the fairness and reliability of market results.

X's partnership with Polymarket may significantly increase the transaction volume and user base of Polymarket, thereby increasing UMA usage and demand. As transaction volumes on Polymarket grow, demand for UMA oracles will increase, which may drive stake and governance demand for UMA tokens, further pushing prices up.

Polycule

After the recovery of trading volume in Polymarket, derivative projects have emerged around it.

Polycule is a streamlined Telegram trading bot designed to simplify trading on the Polymarket forecasting market platform. On June 8, Polycule founder krish announced on the X platform that he received a $560,000 investment from Alliance.