This is part of a series of markets about things I could do in 2024. See also: /Mira/which-of-mira-s-cool-ideas-will-mir

Summary

We've all had the same thought: Headline comes out about some string templating library raising at a $200 million valuation or a site selling Chuck E' Cheese Tokens at a $40 million valuation , and you get an urge to take a mortgage out on your house and short the company into the ground.

There's a couple reasons these numbers are inflated:

• The stock isn't tradeable, so the fundamental primitive of "borrow the shares, sell them" can't be implemented.

• People love seeing unrealized profits on their accounts, and telling others(like potential investors in their VC fund) about their large unrealized profits. So they'll often prefer to hold a position rather than sell at a loss and cause the "market value" to drop. A bit like how when real estate prices drop, people tend to hold and hope rather than mark them down.

• Public valuations are usually using preferred stocks with different payout priority than the common stock. So the numbers might not be inflated at all, for the VCs.

So we can't trade actual private company stocks. But we could issue CFDs or SSFs that cash out if the company ever goes public or is acquired.

Not everyone has the guts to short a startup that could 1000x in value, even if it seems obviously overvalued. So we could also offer bounded-risk binary contracts: "Will this company ever go public?", "CFDs but the risk is capped at 2x/5x/10x/20x/100x losses", "CFDs on the log-value of their exit price".

Employees at startups often have call options. They have absolutely no idea how to value those options. They're also usually prohibited from trading them. But by having a 3rd-party market establish fair prices on those options, it will help keep the companies honest because even if they can't directly arbitrage by trading they will ask questions about why the market values them so much lower.

Get rich by leveraging up on synthetic shorts on your favorite startups! And if the government tells us we can't, we'll simply add a blockchain to immunize ourselves against legal consequences.

Market Mechanics

Trigger condition: Deploying any application website to a domain name. Planning, writing prototype code, a static placeholder website, etc. will not be sufficient as minimal effort for this market.

Resolves NA if the trigger condition is not met. Otherwise, resolves to the logarithmic interpolation between nearest bounding answers(or to $1 if I start this but don't make any positive profit for the entire year). Units are "profit in USD". I'll add new options at multiples of 10 as needed before resolving.

Example: I make $500 in annual profit. The nearest options are $100 and $1000. Then this market resolves (ln(500) - ln(100)) / (ln(1000) - ln(100)) = 70% $1000 and 30% 100.

"Profit" is income minus expenses. I'll have to calculate expenses for my taxes, so e.g. OpEx will count 100% as an expense, CapEx will probably be weighted 20%. A salary to myself would count as an expense. Equity doesn't count as income.

Mira will not trade on this market(or will market sell if I accidentally do).