Exclusive: Kalshi partners with ‘Blanket’ to help small businesses hedge against risk—with help from the guru of ‘hypergamblification’

Lauris Zminsky, an independent financial economist with a penchant for “hypergamblification”, has joined forces with Kalshi to develop a new AI tool called Blanket. Blanket sits atop Kalshi's prediction-market exchange, aiming to help small businesses hedge against a wide array of potential risks, from bad weather to election outcomes, without the need for a Wall Street bank. Launched in stealth mode, the tool will go public this week.

Zminsky, who describes himself as a "forward deployed philosopher," built Blanket to demonstrate the practical use of prediction markets beyond mere speculation. His initial project seeks to match S&P 500 companies' risk factors with Kalshi's existing markets. Blanket serves as the self-serve evolution of this concept, tailored for Main Street businesses rather than the S&P.

Built and owned by Zminsky, who does not work for Kalshi, the tool uses an AI reasoning engine to suggest specific yes-or-no markets on Kalshi that can offset potential risks for small businesses. For example, a bar owner can input a worry about hurricane season in Florida, and Blanket will suggest relevant Kalshi markets.

It's important to note that Blanket is not a trading app; it's a reasoning and discovery tool that funnels users towards Kalshi. Execution, compliance, and customer vetting happen on Kalshi's side, which operates as a federally regulated event-contract exchange.

Zminsky is coy about whether he might join Kalshi in the future, citing overlapping social circles. Despite some caution about whether the tool can truly transform how small businesses operate, he emphasizes that Blanket can significantly de-risk a business's balance sheet by finding the right markets and sizing bets correctly.

Zminsky's theory, "hypergamblification," explores whether prediction markets create something new or tap into a deep human desire. Kalshi, which has leaned heavily into hedging, showcases clients who use the platform to hedge against various risks, including weather anomalies and sports tournament outcomes. Kalshi's small-business hedging unit, led by Nicolas Hull, is already working with firms using similar strategies, with Blanket designed to give them and thousands of similar businesses an on-ramp to Kalshi's offerings, without a sales call.