Kalshi has launched the American Power Index, ticker KPOW, a single number that tracks who controls Washington. It runs on a scale of +50 Democratic to +50 Republican. The formula weights 25% on certified current reality, meaning actual control of the House, Senate, and presidency, and 75% on what Kalshi's prediction markets imply about future control, pulling from six variables including chamber control, expected seat margins, and government shutdown odds.
The argument Alfred Lin and Abhishek Malani make is not about politics. It is about information quality. Polls capture stated opinion. Media amplifies what earns attention. Prediction markets force participants to back beliefs with capital, which means being wrong costs money. The result is a price, not a take. The more interesting claim in the full piece is what an index unlocks that a single-event contract cannot: the ability to price questions that never fully resolve, the way an equity index prices an entire economy without waiting for a final settlement.
Sequoia is backing Kalshi founders Tarek and Luana on the premise that KPOW is the first instrument on a larger infrastructure layer, not the end product. The piece is worth reading for the framework it builds around full-spectrum signal processing versus narrow-band amplification, and for the specific mechanical breakdown of how the six component markets feed the index. The real question the authors leave open: what catalog of never-settling contracts gets built on top of this foundation next.
[READ ORIGINAL →]