Hello, and welcome back to Inc.'s 1 Smart Business Story.Prediction markets let people bet real money on future outcomes—from how many times Elon Musk will post on X in a month to whether or not the Fed will cut rates . Platforms like Kalshi and Polymarket saw $4.8 billion traded during Super Bowl week alone. Now Noise, a new prediction market, applies that concept to internet trends, letting users wager on everything from viral dolls to AI tools before they peak.

Founded by USC grads in 2024, it's a "stock market for trends," tracking social media engagement to gauge cultural relevance. Users can "long" or "short" anything from the Labubu craze to ChatGPT's staying power. The startup just raised $7.1M from crypto firm Paradigm, betting that attention has become society's most valuable currency. But there's a twist: unlike traditional prediction markets with fixed end dates, these trend bets are perpetual, meaning the game never actually ends.

In this article you’ll find:

BY SAM BLUM, SENIOR WRITER

On Discord, users are up early and swarming the server hosted by Noise, a new prediction market that lets anyone place bets on the relevance or cultural cachet of online trends. 

Faceless avatars chime in with a standard missive. “Gnoise,” they say—a riff on “gm” or “gmorning,” which is internet parlance for greeting a new day. 

Noise’s fandom seems to be thriving, at least for a nascent company yet to formally launch—its first official beta will roll out this week. The company’s CEO, Gabriel Carafa, graduated from the University of Southern California in 2024 and co-founded Noise with former classmates that same year.

Over the last two years, the trio has worked to launch the first prediction market serving the attention economy. 

The average American is now acquainted with prediction markets, which have surged in popularity during the last 18 months. The two biggest companies in the space, Kalshi and Polymarket, saw trading eclipse a combined $4.8 billion during the week of the Super Bowl, the Wall Street Journal reported. 

The leaders of these companies, such as Kalshi CEO Tarek Mansour, argue that wagering money on the outcome of an event is a more accurate barometer of truth than traditional polling or surveys. Mansour has claimed prediction markets will one day rival stock indexes. And in 2024, he told Inc. that prediction markets provide an opportunity for traders to hedge against certain unknowns that might harm their financial well-being—such as an extreme weather event battering one’s home or tariffs’ effects on a small business. 

While Kalshi and Polymarket offer futures contracts on the outcome of events spanning a vast societal gamut—you can bet on the weather, political races, sports, or geopolitics—Noise allows users to invest in the relevance of ephemeral trends that blow up and fade away online. Or, as Carafa explains, “we don’t love to call it this, but it’s like a stock market for trends.” 

On Noise, the criteria for what constitutes a trend is broad. The categories apply largely to anything dominating a notable portion of the internet’s “mindshare,” a term popular among crypto fans that roughly translates to virality. To gauge the popularity of a trend, Noise uses engagement metrics on social media—chiefly X and Reddit—in addition to trading activity on the platform itself. To source those inputs for its trial in May, Noise used a search engine developed by KaitoAI, which builds attention markets aggregated from social-media data, serving primarily crypto investors. 

The method for determining a trend’s relevance “is going to be an iterative process,” Carafa says. 

He calls himself “very interested in continuous information, including specifically the subjective measure of relevance [of] trends, brands, ideas…. Which specific brands have the most cultural value, which political narratives matter the most?” he tells Inc. 

Users have the opportunity to “long” or “short” various categories, essentially staking a financial claim on something like the popularity of Claude Code or the ephemerality of a pop-culture craze. For example, you could buy a category like “Labubu,” ideally before the quirky dolls go viral, then conceivably sell their shares at the top of the market, before the attention fades. 

The idea behind Noise—turning abstract internet trends into a financial vehicle—has gotten investors interested. In January, the company netted a $7.1 million seed round led by cryptocurrency investment firm Paradigm. Paradigm didn’t respond to a request for comment. 

So far, Noise has an 11-person team. The company is much smaller than Kalshi and Polymarket, but Carafa clearly understands that attention is one of the modern world’s most valuable commodities, sought after by celebrities, brands—and, increasingly, anyone else with a smartphone. Indeed, a recent academic paper cites the current social-media landscape as galvanizing a “societal transformation… which will see attention become the defining currency that moves individuals, exchanges, and many other elements of society.”

Noise’s premise is different from Polymarket and Kalshi. Its categories are perpetual, rather than set on a fixed ending and settlement date. However, the risks of market manipulation are still apparent, says Karl Lockhart, an assistant professor at DePaul University Law School who studies the regulatory landscape surrounding prediction markets. 

“If someone knows what their recipe is for determining the market signals and how they’re tracking change, you could easily get bots to post on X to talk about something to pump up the price,” he says. 

Carafa notes that misinformation—or “slop,” as he calls it—is pervasive online. 

“Confidence in content online is at an all-time low with the accuracy and the authenticity of it,” he says. He frames Noise as a potential solution for that misinformation. 

“The more important question is, can we build this in a way where people who are interacting with markets on Noise help contribute to the question of, ‘Is this specific trend or brand as important as it seems to be based on what I’m seeing on social media?’” 

As prediction markets have exploded, lawmakers have voiced concerns about insider trading and market manipulation. In the House of Representatives, the Public Integrity in Financial Predictions Market Act was introduced in January by Richie Torres (D-NY). The bill was introduced as an attempt to curb inside deals after a Polymarket trader netted $400,000 betting on the U.S. capture of Venezuelan president Nicholas Maduro. (Torres accepted a campaign donation from Kalshi in 2024, according to campaign disclosures.)

The ambition for Noise is big—potentially bigger than the incumbents, Carafa says. “Binary questions, whether something is going to happen or not, are probably just scratching the surface of what’s possible,” he adds. 

Already, diehard users on Discord have their own ideas of what Noise is and how to make the most use of it. One user-written strategy guide posted to the server advises: “On Noise, you don’t trade what is true, you trade what is being discussed, and how it is being discussed.” 

Carafa says, “That’s an unofficial guide for sure. But I think it’s an interesting comment.” 

He continues, “I’d say you’re really trying to look at where attention or cultural value is moving in terms of conversation or trends. If there is capital being moved because of the way that [a trend] is being discussed. That is a very real thing. That is very true.”

Enjoying this newsletter? Forward to a friend!