InfoFi: When information can also trade stocks, can attention also make money?

“How much would you pay for this information if Powell were fired in 2025?”

Written by: Cryptoria

When the financial markets have already priced coffee beans, stocks, and credit ratings, what will be the next to be priced? The answer may surprise you: the information itself.

From the accurate predictions of Polymarket in the US elections to various emerging attention trading platforms, a new financial paradigm is quietly rising—InfoFi (Information Finance). This is not just an upgraded version of prediction markets, but a revolution on how to discover and price the value of information using financial tools.

From Gambling to Information Discovery: The Evolution of Prediction Markets

Do you remember Polymarket’s performance during the 2024 U.S. elections?

The amazing data behind

• Unsettled interest reaches 512.3 million USD
• Monthly trading volume of tens of billions of dollars
• Regarded as one of the most accurate predictors of election results.
• The total locked value once reached 450 million dollars.

However, after the election, the locked value of Polymarket plummeted to over $90 million, and the total market cap of the entire prediction market was just over $100 million. This phenomenon of a “once in a millennium” event-driven model has led people to start thinking: what will the next form of the prediction market be?

The answer is InfoFi - a broader information financial ecosystem.

InfoFi: More than just predictions, it’s information pricing.

InfoFi extends the value discovery function of financial markets to the information layer. If traditional finance prices physical assets, and DeFi prices digital assets, then InfoFi prices abstract concepts such as information, attention, and reputation.

This emerging field includes several key tracks:

1. Attention Trading: Noise’s Innovative Experiment

Noise is a tradable market protocol focused on attention shares, allowing users to speculate on attention trends rather than tokens. Imagine this:

• You are optimistic about a project that hasn’t issued tokens yet.
• You want to invest in the growth of a certain influencer’s impact.
• You predict that a certain brand will become popular.

In traditional markets, these cannot be directly invested in. But Noise allows you to:

• Speculate on project attention performance without bearing the risk of token price.
• Provide investment channels for projects without tokens
• Pricing through third-party data streams (such as social media, news, podcasts)

Team Background and Data

• Incubated by Megaeth Labs, part of the Mega Mafia project community.
• 30-day user retention rate of 64.2%, average session duration of 12.5 minutes

2. Reputation Finance: The Trust Experiment of Ethos

Ethos is an on-chain reputation protocol designed to make trust clear and executable in the crypto world.

Core Mechanism

Guarantee System

Users can stake ETH as collateral for others.

Reduction Mechanism

Allow users to question false or unethical behavior.

reputation score

Based on on-chain behavior and social feedback formation

Invitation-based constraint

90-day binding period, the inviter and invitee share 20% reputation points.

Real Case: Chad.farm vs dingaling Incident

A user named Chad.farm initiated a reduction against dingaling, accusing him of fabricating work experience in his Twitter bio. Despite the heated controversy, the reduction proposal ultimately failed by a single vote. This incident became the “one battle to fame” for Ethos’s reduction feature, showcasing the potential of on-chain reputation systems to hold celebrities accountable.

Double-edged sword effect

Ethos faces the classic reputation system dilemma:

Positive effect

Improve network credibility and reduce false information.

Negative risk

may lead to “compliance under social pressure,” suppressing the true voice.

Manipulation risk

Once linked to economic interests, reputation may be maliciously shorted.

3. Narrative Index: Quantitative Experiment of Narrative

Narrative initially aimed to speculate on crypto narratives (such as AI, DeFi, Meme, etc.), but later shifted towards a more data-driven model.

Working Principle

• No longer capturing collective sentiment, but pricing based on real-time blockchain and exchange data.
• For example: AI and Crypto themed markets may use the total open interest of related assets for pricing.
• If the open interest in a certain field reaches 4.1 billion dollars, the derivative pricing may be 4.1 dollars.
• This model is more like creating various “indices”, similar to the S&P 500 index in traditional finance.

Multiverse Finance: Concepts and Implementation

Dave White, a researcher at Paradigm, proposed the concept of “multiverse finance,” which could be the ultimate form of InfoFi.

Core Idea

Unlike simple prediction markets, multiverse finance builds a complete financial ecosystem around “if” scenarios. Each possible future is a “verse”, where users can engage in full DeFi activities.

Example: The case of Powell being fired

Suppose you spent 59 cents to buy a token that says “Powell won’t be fired”:

• Limitations of traditional prediction markets
• Once purchased, you can only wait for the result.
• Cannot use tokens as collateral for other DeFi protocols.
• Capital efficiency is extremely low

Multiverse Financial Solutions

In the verse “not being fired,” your tokens can:

• Borrow other assets as collateral
• Provide liquidity to earn yields
• Participate in various DeFi protocols
• If Powell is really fired, the entire verse goes to zero, and there is no liquidation issue.
• If not fired, all rights are reintegrated into the main verse

This design completely addresses the issue of low capital efficiency in traditional prediction markets.

Opportunities and Challenges of InfoFi

Huge imagination space

The potential of InfoFi far exceeds that of current native crypto applications:

Small and Beautiful Brand Opportunities

• Independent coffee shops, artists, musicians
• Obtain investments without issuing tokens
• Attention shares become tradable assets

Verification of Information Authenticity

• Use real money to endorse speech
• Reduce online trolls and false information
• Create a more trustworthy online environment

Real Challenges

Liquidity Issues

• Most InfoFi projects are still in the early stages.
• Lack of sustained wealth creation effect
• Waiting for the “once in a millennium” event-driven

Technical Challenges

• The reliability of oracle data
• Prevent data manipulation
• Integration of diverse data sources

Ethical Concerns

• The reputation system may suppress dissenting voices.
• Economic incentives may distort genuine expression.
• The potential risks of the “social credit” system

Future Outlook: Financial Infrastructure in the Information Age

InfoFi represents the next stage of financial evolution:

The pricing journey from physical to virtual

• Agricultural Era: Grains, Livestock
• Industrial Era: Stocks, Bonds
• Information Age: Data, Attention, Reputation
• Future: ?

possible development path

Short-term (1-2 years)

• More vertical information markets are emerging
• The oracle infrastructure is完善
• Deep integration with traditional DeFi protocols

Medium Term (3-5 Years)

• Practical Applications of the Multiverse Finance Concept
• Information assets have become a mainstream investment category
• Regulatory framework gradually established

Long-term (5-10 years)

• Information finance has become the core infrastructure of Web3
• The deep integration of attention economy and traditional economy
• Establishment of a new social trust mechanism

Conclusion: A New Era of Information Value

When we discuss InfoFi, we are actually talking about a fundamental issue: how to effectively discover, verify, and price valuable information in an age of information explosion?

Traditional centralized platforms (such as Facebook and Twitter) monetize attention through an advertising model, but users cannot directly benefit from their own attention. InfoFi may offer a fairer solution: allowing everyone to become direct participants and beneficiaries in the information value chain.

Whether it’s Noise’s attention trading, Ethos’s reputation system, or the grand vision of multiverse finance, they all attempt to answer the same question: how to better organize and incentivize the production and circulation of information using market mechanisms?

This experiment has just begun. Whether it will be successful or not will be verified by time. But one thing is certain: we are witnessing the opening of a new chapter in financial history.