Luana Lopes Lara: Youngest Self-Made Woman Billionaire on Kalshi, Bitcoin & Beating the Feds

All we could do is we're going to decide if we're going to sue the government to be able to bring these markets. And we had one month and I remember that conversation we had. Guys, it's going to be the most intense month of our lives and we have to just like literally give every single thing that we have. It was a very tough like one to two weeks to decide, are we being stupid? And this is never going to work. Well, you were named the youngest self-made female billionaire. It's very surreal. And it's just another way to look at how big the company got. Hey, everyone, welcome back to the show. I am so honored to have with me in person today, Luana Lopez Lara. She is the co-founder of Kalshi. And as we know, prediction markets are all the rage right now. They're sort of converging with crypto. So Luana, it's great to see you. Thank you so much for being here. Of course. Thank you so much for having me. I'm excited. I would love to start with your fascinating and very inspiring backstory because you went from professional ballerina in Brazil to MIT, very impressive, to working on Wall Street to founding Calchi, which is the first federally regulated predictions market, right? Right. And it's kind of a big deal. The valuation is pretty huge. It's done incredible things for your life. So take me back to the start. Yeah. So everything says it's very random. my background for sure of where I've been. But yeah, in Brazil, it's actually very common if you're like a very young girl, like two years old, your parents put you to ballet classes and she's very normal. I was extremely lucky that I just loved it from the very start. It was like when I was very little, I just like, I want to do more classes and more classes. And why do I start taking tap classes and jazz classes and all those things? But that always kind of coexisted with school. I always want to be number one. I always wanted to be the best one uh in literally like i would before so the school year in brazil is january to december so because of the season is the opposite than here and we would get all the the list of books for the year like end of november maybe like when we end and then we'd start back in in february the day that the list would come out my mom would take me to the bookstore would buy every single book for the year and i would read all of them wow before the classes would start so for me it always the two sides of like ballet i wanted to i loved it so much and i wanted to be so good but school was just so important to me and i was always very ambitious like when i when i was little i had this paper next to my bed that everyone cool that i would learn about in school i would write the name down so i would learn about churchill or alexander the great i would write their name and be like you know one day maybe i i would try my best to do something that's even remotely similar to what they do. So I was always a weird child in that way. But I've been motivated by always trying to be at the best spot that I could be for what I wanted to do. I went to the professional ballet school. It's called the Bolshoi Ballet, which is the biggest ballet in Russia. They only have one school outside of Russia. It's in the south of Brazil. So I moved there. I was training really like eight hours a day. My routine was insane because I would wake up at probably around like six, I would go to school from seven to 12. Then I'll go to ballet school from like 1230 to 9pm. Then I'll go home and I'll have to study for like SATs and all those things. I wanted to come to the US. And it was a similar thing. Like I want to, I love ballet. That's the thing I love doing the most. But I had higher ambitions and I wanted to be at the best school. And that was in the US. So let me apply to try to go there. And everything worked out. And yeah, and it was from there. Just curious, was this kind of ambition and belief in yourself instilled in you from your parents? Do you think it's something that you always had? Oh, not at all. I think it was kind of born like this. My parents were almost the opposite. I used to get so stressed with not doing well in school that my parents would be like, if you don't get an 100 and you don't cry, we're going to go to dinner and do something nice. you're gonna get a gift and i would like still not do it i'll get like a 9.9 and be like very upset um and and all like that so i think it's very much for me i was kind of always very i think i was just always very competitive and and like you know i just always wanted to be like the best i could be to today so fascinating okay so did you always want to go to mit and when you went there you met your co-founder right yeah not really i mean i didn't really know about any of these schools when I was in Brazil. So I obviously everyone knows Harvard. So that was kind of like the one that everyone's like, Oh, that's, that's the best school in the world. And I think I first heard about MIT in that movie, I think 21. Okay. And I thought it was, it seemed like the best school in the world. It seemed amazing. But when I was applying, actually, there's, there's this places in Brazil that help you apply to colleges in the US, because obviously, I think that year, it were only was only me and another girl from my entire state that were applying to school in the u.s so it's very rare to apply and so they were helping they were kind of helping and they said there was no chance that i was going to get in any of my top choices because it's so hard mit so hard you need to have international gold medals to go and uh and whatever um so at the time i even though i kind of mit was kind of like my dream school i was trying to be realistic and be like everyone's telling me there's no chance I'm gonna get in um but when I got in I think when I was choosing between different schools MIT made the most sense for me because I thought it was gonna be the school that would put me most out of my comfort zone because when I was studying like eight hours a day ballet right you have also like art history and it's just basically like a liberal arts education um and I thought MIT would force me to or I'd get very very good at math or you know probably just not work out at all um so i think it was kind of a forcing function i chose to like go for the biggest challenge and yeah and i met tarik at the very start um like because i'm i'm from brazil like born and raised right so i was international orientation he's actually born in california but he grew up in lebanon so he was also in international orientation and we met and became friends there and we liked the exact same thing so we worked together at citadel we worked together five rings capital which is a small prop shop downtown um and and yeah and i think it wasn't it wasn't one day we woke up and we're like let's start this company together it was a very organic like we we were very close friends we liked the exact same things we were talking to each other about problems all the time and we started talking about the scholarship problem we started talking about wow isn't it weird that you know bridgewater has a research division and then there's two other departments of the company that all they're trying to do is figure out how to put that thesis into the market. So the research division would say there's going to be a recession in Germany. Then they have portfolio construction. They would get that and try to figure out how to actually put that position in the markets. And then the traders would actually figure out how to best execute it. So you have these like, and then he would be like, yeah, that's weird. Like at Goldman, I'm here trading and people are calling, trying to get exposure to Brexit and exposure to Trump winning. And we're also coming up with these weird portfolios of like shorting the S&P and doing this. And the idea of Couch became really clear. We just wanted to let people kind of take out all that problem and let people trade directly on what they had an opinion on and what their thesis actually was. And it was over the course of three years during college that we were talking to each other, talking about prediction markets and all those things up until we eventually we made the jump. 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But when you see the numbers and the math, trends and patterns come out that you can sort of read, right? So can you talk to me just about the journey of building it? Because I've seen so many founders talk about the early struggles, right? Like you share the idea, no one wants to fund it. Tell me what the experience with Kalshi was like. Right. We were very lucky on the fundraising side. So that was never an issue for us. But on the building the company side, that was extremely hard. because when we learned about it and we're like okay we put the name to what we're trying to do these are prediction markets and we started researching more about what it was and it was like okay sounds like the problem here is regulatory seems like there's some legal issue in the us so we're like all right we're gonna solve this legal issue there's a spreadsheet of 65 names of lawyers uh you take 32 you take 33 and and just call everyone and in one day we called the entire list and not a single one of these lawyers said that this was doable. They were like, well, it is CFTC jurisdiction, but they were never going to let you do it. Don't waste your time. Or it's like, no, not even. It was variations of impossible. Sorry, what's the big deal? I mean, what's the problem with the idea of saying that the people can guess, essentially, is it going to be Trump who wins or is it going to be Biden who wins? I mean, it doesn't seem like that big of a deal. Right. I agree with you. And I think that the problem at the time is that the CFTC, and I think the government in general, they're very used to and are okay with going extremely slow on anything that is new. And it kind of squashes all innovation, which I'm sure in the crypto world you're very familiar with. But also on the other side, I think there's event contracts that just never really developed in the US. I think they're very used to commodity futures and thinking about leverage and margin and all those very traditional instruments. And when people brought kind of the concept of prediction markets, they got concerned about, are these easy to manipulate? How are you going to place for insider trading? How is this, you know, who is actually going to be hedging this? What's the economic impact? Which actually is interesting because when you see a lot of the press coverage that we get now on Kaoshi, a lot of it are the actually exact same concerns that the CFTC had back in 2020, 2019. And we actually worked with them to address all of them. So now it's very easy for us when people are worried about insider trading and we're like well we bent it and we've built systems to bend it and detect it for seven years and now we're actually able to do that very well but i think the cftc's concerns really came from like first of all not understanding what was going like understanding the market not really understanding um and just general slowness and then we had to work with them on all of that which was very hard because how it actually works is the government sends you a list so to backtrack so like after the 65 lawyers, what we did is through a connection over connection over connection over connection, we got one lawyer that said, I will get you one meeting with the CFTC. And what you do in that meeting is up to you. And we were like, wow, okay, we got in and we went. And that when this started that they are like this is our list of 20 concerns And we would take the concerns and be like okay this we can solve and prove by a data analysis model looking at this event and proving that it's not easy to manipulate this we can write policies for this we can analyze analyze the law for and we did it for 20 we go back to them and they're like we are okay with one of your answers and follow-up questions on this and we completely disagree with these and we'd come back and like write like find up a new plan and write everything again and do all the analysis and go back to them and that took three four years wow of just going back and forth and back and forth and back and forth and it was very hard because in if you think about most companies that take so long to be able to launch they're basically uh if you get the approval you get instant product market fit right with the fda approval if you figure out a way to you know cure headaches you take a long year like many years to get approval but after you get approval you're good to go you're gonna make billions of dollars with us our approval was just to allow us to start building a product to try to get product market fit so then it was kind of like it was a step function to then start hopefully finding that exponential curve and it was very hard for us to be like how does this make sense like how does us waiting three four years to do this all of our our competitors were going offshore trying to do it kind of like not follow the law and all of that um so it was very very tough and the company really just started working two years ago with the election so what an incredible story i mean you touched on the concerns about insider trading and things like that can you clarify like how do you prevent people from getting some kind of information right especially if they work in powerful positions or in the government from actually using that on one of these markets to be able to gain an advantage that the public doesn't have? Right. That is a great question. Insider trading is, there are multiple layers to this, right? I mean, the first one is what's the legal definition of insider trading and what we actually absolutely have to bend. And that is if you use information that you don't have the rights to disclose. So for example, if I sign an NDA because I joined the Federal Reserve and I signed an NDA as my employment, I cannot use that information to tell my friends or I cannot use that information to make money on the markets, which is basically the same thing as, you know, divulging that information. So that's layer one of like, that's absolutely a federal crime. And it's a federal crime. If you look in the stock market, if people are doing that and they work at Facebook and they're thinking, you know, talking to people about their earnings, that's inside of trading, same thing here. So if you're also like a dancer in the Bad Bunny concert, when you sign an agreement to say that you're going to be a dancer there, there is an NDA, right? There is all these things that you have to follow. And that legal contract makes it absolutely illegal for you to participate on couch. So that's number one of what the kind of like federal standard is. But we actually go way deeper than that. On top of it, we have like trading prohibitions. So on top of not just the people that can't legally trade on it, we also prohibit a lot more people from trading. So people that are, you know, have access to it from a friend or people that, you know, for example, with sports, like coaches and players and people that are in the drafts and people. We prohibit a lot more people. And with that, it's like if you violate that, you're violating an exchange rule and you can also be prosecuted, DOJ jail, all of that. And then the last layer that we do, and we're the only ones that do this, even the stock market doesn't do it, is that for some classes of users, you're not even able to try to trade. So we block it from the start. So for example, politicians, if you try to trade on your markets, you're not even going to go through, which no one does that. In the stock market, you trade and then they try to figure out what's going to happen. I'm glad you do that. Yeah. No, and in the past seven years, like a lot of what we've done is build the systems that can look at all the trade data, look at all the information because we have name, address, social security, all that. So look at all that and find anomalies in trading so that we can actually, we had a couple of cases come out of like a California governor that was trading on himself and was trying to do that. That's one of the reasons we are now doing this kind of california's governor like newsom no like what candidate a candidate sorry yeah interesting so uh yeah no and some people are always like why are they doing that the other one was a mr beast editor oh he's an editor he was trading on a market about mr beast and we're like it's so clear why would you do that what's the most interesting thing you've watched play out on the platform because there are some really interesting like future predictions most interesting i would actually say the tiktok ban market was very exciting okay because it was so hard there was nowhere else in the world where you could get that type of information on this question you could kind of track facebook stock and be like is it going up or down but i think that like looking at that and tracking with the news was very like exciting and like just proving the proving it but i have to say the most fun the most interesting and fun we've ever had was the election market in 2024. Yeah, talk to us about that, because that's where you guys really landed on the map. And everyone, all of a sudden, it became a household name, and it changed your life. It did. So what happened with the election market that was very interesting was after we were able, we took the three to four years to get regulated, spent another one to two, like one year kind of like growing, but growing slowly. But the moment we got regulated, the first thing that we did is start going to CFTC and saying, we want to do election markets. Those are the holy grail of prediction markets that's what really proves the the importance of these markets the data all of this and they said no in in like it took two years of them saying no and pushing back but but not a good reason really they were just like they just didn't want these markets because they were worried about political reasons and it got to a point that we lost we didn't list the 2022 midterm elections and it got to a point in 2023 after multiple rounds of public comment and all that that all we could do it was a very hard decision all we could do is we're going to decide if we're going to sue the government to be able to bring these markets and that was a very hard decision i'm i love risk i'm i'm a risk taker my co-founder is really not he's like he's he's risk he's he's he's stressed and i think that's how we work well so well together is because we have this kind of like yin yang kind of energy um and i really wanted to sue because one the markets were too important. It's like the market that we need. And the other one is that we were right on the law. And I was like, there's no way a judge is going to look at this and not side with us. And we ended up winning one month before the election. Fascinating. And we had one month and I remember that conversation we had with everyone in the office. It was like, guys, it's going to be the most intense month of our lives. And we have to just like, literally give every single thing that we have to grow this market because our competitors were growing outside the US for over a year. So they were kind of compounding their name, their brand, and the election market is so easy to compound on that. And we only had one month to compound close to the same amount or not, if not more. So we took a lot of very big bets on marketing and all of that stuff. And it ended up ending out and it was awesome. The election night was like one of the best nights of my life. So it sounds like you kind of always knew that this was going to take off and work. yeah yeah i think yes it's just if you ask me why i'm not sure but i did just your gut in a lot of ways yes i think it's but it's such like a public phenomenon you know people are guessing on things it also seems more affordable right because you look at stocks and people are like well i'm behind they look at bitcoin they're like it's too expensive they don't know that they can have a fraction and then you see these bets and it's like a couple cents oh i could do that exactly it's it's a lot cheaper and easier to get started also it's very like it's it's very safe because you're not trading you're trading against other people right so like you don't you don't have don't have to be worried about predatory behavior all of that stuff you're just trading against other people on what's going to happen in the future and you can start with as little as a dollar to just we have a lot of people that are using couch as kind of validation for their own opinions so less about like obviously we have a lot of people they're trying to make a lot of money but we have people that are more like the things I think about and I think I might be right on I put a position so I have a real-time view of how right and accurate I am and I think people are doing that with like a couple dollars and it's just very cool to see that too do you have a sense of demographics like are women trading as much as men or is this more of like a guy like a crypto bro type of phenomenon well i'm we're unfortunately not 50 50 yet i hope to get there we hope to get there soon i think it's around like almost 30 percent women though okay which is a lot higher than if you look at surprising like other brokerages and and you know and all the similar platforms it's a lot higher and we've been talking to a lot of women and i think that the big the thesis that we have right now of why the hypothesis of why that's happening is because we have so many more markets that women and other kind of not not just women we're seeing like just a way more diverse user base in general uh from a lot of other groups as well it's because now they think they can actually is a game that is not rigged against them and they can actually make money because it's like it's intimidating to look at the stock market like i don't yeah you don't really know what's happening you don't really know who's pricing right you know these things who are you trading against and and these markets they're somewhat intuitive you're like you understand what's happening you understand the topic of the conversation you understand politics right and women are trading a lot on politics and entertainment and you just see them getting excited about this is the first time it's a game that i feel like i have an edge on and i can actually win um and we're seeing a lot of that so it's a basically diversity of markets just bring a more diverse uh user base which we think is going to be very strong like a very very big power of ours going up have you yourself been an investor like a trader personally in the markets somewhat somewhat i'm like i because i put i deal with cow she has my you know very risky volatile stock holding um but i have like smp and treasuries and stuff like that and i have a little bit of bitcoin so you do okay well i was gonna ask later but please share your bitcoin story it started at mit right right so i was a freshman in college and i got an email saying the mit bitcoin club i think was the name where Bitcoin lab had a hundred dollars of Bitcoin of anyone that would just like sign up to Coinbase. There were three wallets and it was just like Coinbase and just redeem your hundred dollars in Bitcoin that I think was like 0.3 of a Bitcoin at the time. And I was like, freshman in college, had no money. I was like, oh, yes, I'm going to get this a hundred dollars and see how it goes. And then I lost my password. So very good because I didn't sell. And now I hold this till today. And it's just great. It's like this is one of the main benefits of like a school like MIT, right? It was just so if only I had paid more attention to it, but more Bitcoin, I would have had a lot more money now. Wait, but you lost your passcode to it? No, but then I but then I found it again. I was helping me out like I've been senior year. I figured out how to get it back. And then because I had started my account in Brazil, it was kind of a mess on like where my password and account were. But we were able to find it. Well, I have read that you can certainly afford to buy a lot of Bitcoin. you were named the youngest self-made female billionaire i know sometimes it's like uncomfortable to talk about like no one wants to talk about how much money they have right but like this is this is a headline in your life what is that like um i mean what does it make you feel or when you get asked are you like i don't want to talk about this it's it's very surreal and the reason it's real it's because i think it's a testament of just how big the company it's just another way to look at how big the company got and you know this was the dream all along the dream not not you know what the money i have but the dream was to get calcio to be as big as it is now and and you know as mainstream as it is now and we have such a long way to go and i and it's just like a all of it is a testament to the work that the entire team put in like i we would if it was just tark and i would be very very far from where we are now it's just we have such an amazing team and but nothing really changes I think a lot of people expect like oh like did your life change and it didn change at all I in the office you know 12 to 16 hours a day working all the time I absolutely love working so it just like my favorite favorite thing It should be at my desk working And so nothing really changed And I think for the company it was just more of a, this is a milestone to, you know, be worth like, I think above 10. It was like a very cool milestone for us. But what really mattered was the revenue we're making, the users that we were growing, the users are so much happier. We were actually checking that our MBS every two weeks is higher than it's ever been. It's just been like really, really growing. And that's the stuff that really like gets us very excited. It's not a big number. Speed opened the door to digital money, Bitcoin. Now with Speed Wallet, users can also access other digital assets like stable coins and digital gold all in one app. Once it's in your wallet, you can send it, receive it, or instantly swap between assets, including Bitcoin. You can even spend it on gift cards from brands you already use. And if you're a business, you can accept Bitcoin and stable coin payments with Speed. They're already powering brands like Steak and Shake, accepting Bitcoin across all their locations. So whether you're investing, spending, or running a business, Speed does it all. 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Choose a traditional IRA to defer taxes or a Roth IRA for tax-free withdrawals when you retire. Take control of your future with Bitcoin IRA. Head to bitcoinira.com slash Natalie for up to a $1,000 funding bonus. Well, you're such a source of inspiration, especially because you've accomplished so much at a young age. So what advice do you have, especially for young women that are watching you and seeing what's possible. But, you know, we don't always feel like that in our lives, right? Especially today. So many people have it so hard and they look at someone like you and it's like, you know, they probably wonder, oh, I probably can't do that. But you seem to have this mentality that anything's possible. Yeah, I really think like the biggest advice that I got, the main advice I got that I think really helped the company was when Tariq and I were in YC and we were in that middle of like calling lawyers all day and all of that and we sat down with Michael Seibel from from YC he's the founder of uh he was the founder of Twitch and he was CEO of YC at the time and we were like all these experts are telling us this is impossible this is impossible this is impossible and he told us like don't listen to the experts they're people just like you whatever they're experts on you can become an expert on as well and they're just people everyone that's done anything that's impressive it's just a person just like you it's not that different and I think it really ties a lot of how I think about things it's like at the end of the day you should just believe in yourself and take risks especially if you're younger you have kind of like the United States such a great country for people to take risks being from like in Brazil it's so much harder to just try to start a company and bet on yourself and here's it's easy it's obviously not easy but it's easier and i think that there's just so much opportunity and i mean it's easy to talk yourself into believing it's not the right time and and it's kind of like almost sabotaging yourself in a way because you believe it's not the right time or you believe it's the what's the term it's like basically i see a lot of like people oh i need a lot more experience for this and it's like no we started out of college and and you sometimes just have to go for it and remember that people are just like you. It's just other people that have done like Apple and Tesla and all of these amazing companies were started by people just like everyone else. And everyone can do it if they just work hard. I mean, you're really the embodiment of the American dream. And it comes at an interesting time because so many people, even folks I've talked to on my show, they've sort of lost hope in the American dream. They think it's broken. And I would love for you to share why they're wrong. I mean, because you guys did this in the last couple of years. You're both, you were born in a foreign country. Tarek has ties to a foreign country, right? And you made it happen here. Right. Well, I think pretty clearly I'm a firm believer that the American dream is so very alive. And looking back of where I grew up in Brazil and I was a middle-class family and we had come to the US to go to Disney World and all of that, but that's kind of the extent of it. um and i really think the us is a it's a great country that if you believe if you work really hard and you believe in yourself you obviously need a lot of luck and all those things things just it's better than anywhere else for things to work out and i think that it's obviously the the big question is how do you expand the american dreams more people i think that very few people are able to have that jump and i'm extremely fortunate to have been you know lucky enough to getting to MIT to get funding that we got and getting to these programs and all of that. I'm extremely, extremely fortunate. And we know it's not everyone that has access to that. But I think the question is less about if the American dream is alive, but more how do you expand American dream to more people? How do you make it so that you don't need to go to a top 10 school for you to get funding from these things? And how do you make it easier for people to take a bet on themselves, but they have somewhere to land? And all of those things, I think it's, but I think there's so many examples of the American dream out there. I think it's like, yeah, when I was little, if you asked me if I would live in the US, I'd be like, oh, that's amazing. That'll be the dream. And that I'm here, able to have my company and pursue all my dreams and having studied where I did, I think it's just surreal. It's very, very grateful. Yeah, I love that story. And you're right. I think people have self-limiting beliefs and they tell themselves that they can't do it or they have it so hard that they don't even try. And you have to try. You have to apply to the schools. You have to go out there. You have to practice. If you guys would have you know given up after the third or fourth lawyer we wouldn't be here today right you wouldn't have gotten the ultimate approval from the cftc you have to keep knocking on the doors yeah and that's like a huge lesson learned right right and i think that ballet is very good at this because it teaches you that failing is completely normal like you're only going to get to do like the three you know pirouettes or whatever the three turns if you try to do one and you fail a hundred thousand times and then you get to one and then you get to two and and being okay with the concept of like with ballet you're like you're trying and the downside is actually pretty bad because if you fall you hurt yourself you might break your foot or something but you still have to try and do it and understand it takes time and takes practice and i think that it kind of instilled in my brain that it's you have to be trying trying to do things and not kind of um selling and i think it's just important to to keep that in mind and i think it's important for the world to try to you know, help the people that want to bet on themselves and take risks. I think it's like not everyone needs to do that. But the people that do want to do that, they should have the support. I love that. Okay, so I've seen on CalShe predictions about Bitcoin's price, which obviously I love to watch that kind of stuff. Can you share with me a little bit about how the digital assets world is sort of converging with prediction markets? Right. It's converging a lot. I think it's interesting because when we started the company, actually so this is a fun fact i don't know a lot of people i don't think a lot of people know this we started the company before going to yc we went to the yc hackathon okay which was basically our first like let's not say no to these high paying jobs yet let's you know go to three days and see see how it goes and we ended up winning the hackathon but it was a like blockchain and i don't remember it was like a like stable coin type of like payment thing and it was in crypto and the initial idea really was to figure out how to do that uh using blockchain because that's what we were learning in school and all that but when we got to the point of the regulatory fight we were we were kind of faced with like a choice of which battle to pick and at this at that point we were like we really really like and what we are really about is prediction markets and we should fight that battle we're also the only people fighting that battle there are way bigger people fighting the crypto battle like coinbase and we should let them then figure that out and with that we kind of reduced everything to a single vector which was how do we get prediction markets and event contracts approved um but we're going more and more like we have a lot of partnerships in the crypto world we're on coinbase now if you ask me five ten years from now i think it's very unlikely that kaoshi won't be on chain uh but i think we need a lot more of the regulatory work to get to to that um side but i think with us going more in that direction obviously polymarket is very, very big prediction market as well. They are on chain internationally. There's a lot of other prediction market projects are in crypto. It's just growing a lot. I think there's just so much synergies between the two. Tell me a little bit more about your interest in Bitcoin. Do you find it interesting? Like, do you want to learn about it? I do. I actually remember, I think it was my 6033 class, which was my systems class that we actually read the Bitcoin white paper. Oh, the white paper, yeah. Yes, back in 2016, maybe. 2016 2017 i don't remember when i took the class but uh i think it's it's very interesting i won't claim at all that i'm i'm an expert on this because i'm really not uh but but i think it's very interesting i think the the crypto world and i think bitcoin has taken the world by storm and i think especially in like places like brazil it's growing so much because yes it's just so hard like inflation and you know interest rates all those things are so chaotic in brazil that i think that Bitcoin kind of really brings that alternative to people that kind of want more stability and kind of more access to kind of a global system. It's very hard in Brazil to be like, okay, if you're going to buy dollars, you're just going to hold these dollars. What are you going to do with them? You can't really do anything, transact with them. It's hard to sell. The fees are so high. But with Bitcoin, you actually solve a lot of these issues. And I think in the US, maybe you don't notice it as much. But when I go back home, you just see kind of the adoption of crypto being so high, especially Bitcoin, because of all the problems in the economy. Yeah, I'm glad you mentioned that because in Brazil, they have the largest Latin American treasury company. And a lot of people are turning to Bitcoin as a hedge to the inflation and just a way to save. Are they also in Brazil investing in the prediction markets? We started growing internationally now. and we just announced our first partnership in brazil actually with the biggest brokerage in brazil to start bringing our our products there growing internationally is very important for us it's like it u.s is obviously very important we are right now i think over 90 market share in the u.s okay um we still think we can grow an insane amount in the u.s so that's kind of our number one priority but international i think is really the next step for us so we're focusing a lot on Latin America, Southeast Asia, and trying to find the right countries. Obviously, the kind of structure and culture we have in the US, which is we want to do things regulatory first and legal. That's the most important thing. We are also doing that outside of the US. But we just think it's... When we see Kaoshi 10 years from now, maybe as I said, maybe on chain, but 10 years from now, a lot of the... What we see Kaoshi has is this massive liquidity pool that can price anything extremely fast. So you can be in Brazil and you're trading against people in India, you're trading against people in the US on hundreds of thousands of markets, hundreds of thousands of structures and markets. And everyone trades with everyone and you have all this liquidity concentrated on CaloShi. So that's why it's very important for us to grow internationally, but keep the same liquidity pool that we have here. So instead of doing like a lot of companies like Binance do this, it's like the US version and then the outside the US version we are going our plan is to have one single version everywhere Well you answered my next question because I wanted to know where do you see Calci in like five to ten years But it sounds like I mean if internationally everyone can be on these markets there is a currency question right Because people use hundreds of different currencies. So is it all going to be priced in one or will it be different ones or I guess maybe a Bitcoin component? I don't know. It's a question we think a lot about because one of the most elegant things about prediction markets is that everything is zero to one, right? So you get the price and you can translate it to a probability in your mind immediately. If something is trading at 30 cents, it means 30% chance of it happening. 68, 68% of something happening. 68% chance. And you get that directly from the price. Now, if you're in Brazil and the dollar is like 5.3, whatever the Brazilian real is, then if we put it all in Brazilian reals and you're talking about the contract being one, two, six, and then how do you start thinking about the probabilities? And now if the effects is changing, how are we doing? So that's a lot of the like trickiness that we're thinking about. So maybe what we do is like different, the contract size might be different, but then you can arbitrage between like smaller pools all fitting into one pool. So we're trying to figure out how to do it because the UX, at the end of the day, the most important thing about prediction markets are the data. And they're like 70% of the people that come to Kaoshi, they don't trade. They just look at the data. And if the data is not intuitive, it's not going to work out. So for us, it's a good point. Wait, they don't come to trade? They come just for the data? Well, so, I mean, this is something I was curious about. Are the prediction markets accurate? Are they telling us what is actually going to happen? So they are not like, you know, the magic eight ball or whatever. They are not like all of the, they are not telling you exactly what's going to happen. What they do is give you a probability distribution. So basically they say there's a 60% chance of it happening. If I told you, if you get out of the studio and there's a 40% chance you're going to get hit by a bus, you're not going to get out of the studio, right? It's too high. Right, it's too high, exactly. but so so it doesn't mean that something that's 40 chance is zero because it was below 50 and i think that's a lot of the educational challenge we have now which is people think anything above 50 means is for sure sure going to happen anything below 50 is never going to happen and what prediction markets do is they give you a probability of what can happen and you can think about even like for a lot of our markets we have a lot of different lines of like what would be this price this price this price this price so you can get kind of actual probability distribution And there was actually this very interesting paper by the Federal Reserve talking about how cow-shee markets are better at forecasting macroeconomic trends than economists, Bloomberg, and even the Fed itself. Well, I believe that. All those PhDs at the Fed, they have got it wrong. They clearly have. Yeah, yeah, yeah. So can I go on the platform and actually create a prediction myself and have people bet on it? Yes and no. So you can't just immediately put it up, but you can suggest one. And then it usually takes, if it's similar to a market we've done before, it can take a couple hours. Otherwise, it takes up to two days because we need to talk to the government and send them the papers. But every single contract that's in the platform has to go through the government before. And there's a full compliance review that we go through. Is it easier to manipulate or not? All the trading prohibitions for insider trading that we need to do, what the rules really are. Because it's very important that we draw a very, as perfect as possible line between what's a yes and what's a no. Some contracts are very hard to do that. Like a Supreme Court case. It's like a lot of times it's like, what are they going to say on their interpretation? How do you actually draw that line? So some contracts take a little longer. But over 95% of all our markets right now are user suggestions. Was there any point where you wanted to give up? Where you were like, I don't think this is going to work anymore. I'm going to turn away. And then you're glad you didn't. Or was it always kind of just you're determined to make it work? i never got to the point that i actually wanted to give up but it definitely got to points that we were like we might need to pivot or figure something else out um i think during that election situation because obviously we we put three four years into getting regulated then we we launched it wasn't really growing and the regulatory it was like death by a thousand paper cuts they were just like trying to stop us at every single thing we wanted to do we were doing like if we had 30 now we have 10 000 markets we used to have 30 markets at the time because the government was just so annoying about everything and in that process of the election market right before we decided to sue it was a very like we had to go to the team and be like we tried bringing election markets to the u.s three times with two common periods multiple cft iterations like and it hasn't worked and we had to it was very tough we had to do some layoffs we had to like some people were leaving because they're like these people are insane what they're just never going to give up on this election idea and it's never going to work um and it would it was a very tough like one to two weeks to decide are we being stupid and this is never going to work on an election standpoint and we should just pivot and maybe focus on just like binaries or on financials and crypto and go more in the fully financial route forget the more prediction market side or should we just keep going and try again and it was all happening at once with like people leaving and us making this decision and all of that and i think it was just a very stressful moment they were like we might have to abandon what we really wanted to do but i really wanted to the government so i i'm very proud that i was able to convince my co-founder that we should do it um and and it all worked out but it was a very and by the way when we made that decision it wasn't just let's just sue the government and fuck it whatever it was very much this is all the bad things that can happen they're going to retaliate against us more we're not going to get a clearinghouse in time um all of those bad things were going to happen and all of those bad things actually happened we were just right on the law and we were able to win but the assessment of how bad suing was going to be was actually correct as well so Tarek was 100% right there uh but I think we were very lucky that the lawsuit got done in time because there's no time frame for lawsuits it can take forever so we were lucky that it got done in time and we were right on the law and lucky that all the judges even though it was all democrat people think it's a republican democrat issue all four judges were democrats and they all sided with us it was unanimous that we were right but that was a very that was a very hard time for sure yeah that must have been so intimidating to go up against essentially the most powerful apparatus in the world yeah um i remember i called my parents uh because at work i think a lot of my job is to be the very positive yeah you are never oh thank you and very positive never in phase always like never like i'm just everything is going to be fine and have that kind of like pushing the company in that direction but it doesn't mean i'm like that outside of work so i went i went home and i remember i had this call with my parents and i was just like i'm 27 years old i'm born in brazil like what am i thinking that i want to see the government and my parents were like well you know it's like your reasoning is sound but you know you have to make this decision yourself and uh but then it worked out My parents and my fiance are so supportive that they just deal with my emotional turmoil. They must be so proud of you. If you could sit across yourself the day you founded Kalshi and have all this experience now and talk to your younger self and say, this is what I wish I knew at this point, what would you say to yourself? I think it would be two things. One very tactical, one not so much. one that's not technical tactical i think it's more just like believing more on what we were doing because i think a lot of the stress came from like not like the fear of the unknown in a way and like being very stressed with that and i think just looking back i'll be like you can chill it's gonna be okay uh i think that'll be that'll be good but on the other side i think we've done a lot of mistakes with hiring that i would have gone back and being like don't worry about execs and hiring execs hire the best like empower the very good people that you have even if they're like out of college um and and really focus on building a great culture with your core people at the beginning of the company it was trickier because you you hear a lot of advice right of like you need a head of engineering like a vp of engineering from this type of firm that is just going to manage and build a team and you need this vp of growth that's going to do that and when you're a young founder you you kind of you obviously don't know what you're doing no one started a company before so you're kind of like worried about what you're doing and it's easy to tell yourself you're making a lot of progress by just hiring these fancy people even though actually the only progress you should make is on product and and getting the like very like hardcore great core group in the company and i think we would maybe have saved like a year of like product velocity if we had just like not hired the wrong people and focus exclusively on product versus everything else so that's good advice what is a prediction that you wish was on the platform that you want to know the answer to well this is a funny one but i used to be a massive one direction fan okay and yesterday in the news i saw that apparently hairstyles is engaged okay with zoe kravitz and i i would want to market to know you know when the if if it's true and if there's a wedding and when it's going to be but that's a fun a funny one i think that every market that we really want to market on we are able to list at this point of course we have like markets like war terrorism assassination markets that i definitely don't want and we also cannot do but everything outside of the clearly bad markets we're able to do in a in a good way and i think they're they're in the platform or hopefully going up soon so i love it now i know you're a one direction fan all right well luana it is such an honor to talk to you. Thank you so much for taking the time to join the show. Any just parting thoughts? Because again, I mean, to our earlier points, you are so inspiring to so many people, but especially I think to women. And I have a lot of women who watch who are trying to become more economically empowered. And, you know, obviously there is like a, there aren't as many female investors as there are men who are investing and trading and own assets. So I think it's an important message because, you know, you want women to feel like they can own their future. Yeah, I think that women are more, you're correct, women are more risk averse. But I think it's very important to not you. Well, I'm weird. But I think it's important to make sure that again, it's like, I think it's very important to have like this internal thought process always of like, am I thinking like this because of some unconscious bias that I have? Or is it because it's actually the right thing? Am I afraid of taking risks because I think I don't understand enough or I'm not good enough? Or is it really because the risk is bad? If the risk is bad, you probably should not do it. But I think a lot of times people just talk themselves into avoiding things. And I think that's why when we look at the data for women at Calci, it's very exciting to see a lot of them seeing this as almost like an entry point to doing more things in the finance world and all of that. But, you know, I say that in having women got the right to vote in 1920. So it's only 100 years since we can vote. So a long way to go. I think women are going to be a massive part of the financial world and the financial markets and all of that. I think we just, you know, need to give a little bit more time. Well said. Thank you so much for joining me. It's been a pleasure. Thank you so much. Thank you. Thank you so much for checking out this episode of Coin Stories. 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