The Branchpoint testnet is live

Today we’re excited to announce that we’re opening up the Branchpoint testnet to select early users interested in giving us feedback as we push the frontier of markets.

The market price of an asset at time t can be understood, roughly, as a discounted, risk-adjusted, probability-weighted average of its payoffs across possible futures ^[1].

In simpler terms: any price in the present is a “smeared-out” average of its price over all possible futures. In a world of digitized 24/7 trading this contributes more than ever to volatile, narrative-driven markets that can seem to defy reason.

What if we could factor out some of those possible futures?

Trading assets conditional on future events in order to look past this smear is hardly a new idea, but it has generally been predicated on very simple conditions, such as with futures and options contracts, or via bespoke legal agreements with large overhead, as with insurance contracts. We built Branchpoint to transform the space of possible futures into programmable markets, allowing anyone to create, trade, and recombine new financial instruments whose value depends on what happens next.

With the arrival of blockchains and artificial intelligence, the economy has vastly increased capacity for handling financial instrument complexity. Prediction markets have provided a public good in the form of market-implied probabilities that certain events will occur, giving essential information needed for the market to price claims on assets whose exchange is conditional on those events.

Multiverse finance ^[2] is an interface on these claims, whereby an asset can be split into several mutually exclusive claims on the asset contingent on the outcome of an event, and these claims can subsequently be recombined back into the original. Branchpoint builds that interface, allowing the settlement condition to be any well-defined, resolvable event, from the outcome of an election, to the passage of a law, to the success of a technological milestone.

Conditional claims can then be lent and borrowed within that universe, combined into structured products, wrapped into indices that track particular perspectives on the future, bought and sold for ordinary assets, and much more that has yet to be dreamt. Blockchains allow us to produce digital versions of the sort of bespoke legal agreements that would have been necessary to create this kind of exposure in the past, while artificial intelligence allows traders the capacity to transform broad theses on the future into rich bundles of conditional asset trades that would have previously been beyond the reach of anything but the most well-resourced trading firms on the planet.

As AI-driven trading grows in popularity, the ceiling on instrumental complexity that the economy can feasibly utilize will continue to rise. More events, more assets traded conditionally on those events, and more financial primitives. Lending, borrowing, derivatives, indices, and mechanisms yet to be imagined - built within and across possible universes.

The Branchpoint testnet is now live. Make sure to get your email on the waitlist and follow us on @BranchpointXYZ on X for more updates to come.