P2P.me's 'Diamond Hands' Moment: Stablecoin Startup Bets on Its Own Fundraise, Backers Not Amused

In brief Stablecoin startup P2P.me went viral on X after apologizing for placing Polymarket wagers on its own fundraising efforts. P2P.me's biggest backers were unaware of the company's recent wagers, two people familiar with the matter told Decrypt.

The wagers were placed around the time that Polymarket updated its rules to prohibit insider trading, including by those who can influence markets' outcomes. P2P.me was established to push boundaries with stablecoins, but the startup has determined that wagering on itself via Polymarket may have been a bridge too far—or at least a few too many degens tipping their hand.

On Saturday, the firm backed by Coinbase Ventures and Multicoin Capital apologized for speculating on its latest fundraising round using the prediction market, describing the move in a post on X as an inappropriate attempt at conveying conviction to the public.

In total, the company that bills itself as a non-custodial service for converting between stablecoins and cash signaled that it notched less than $15,000 in profits on the prediction market move. Still, it recognized how a small payday could carry outsized consequences—like accidentally proving you're the type to play both sides of the blackjack table.

"It created confusion and hurt trust," P2P.me said. "We should have let the work, the product, and the mission speak for themselves. That was our mistake."

"We took our prediction markets position because we believed strongly in what we are building, and we wanted to show that conviction in public, with our own name attached. In an environment where many teams ask others to believe before they are willing to back themselves, we…"

As prediction markets have exploded in popularity, so too have concerns that the platforms can be abused by insiders who have access to confidential information. Recent enforcement actions and arrests have focused on the behavior of individuals, but P2P.me's mea culpa signals that questionable choices can also arise at the company level—and that some startups will apparently YOLO their credibility before they YOLO their token.

P2P.me's wagers centered on MetaDAO, a Solana-based fundraising and governance platform. Some of the company's bets stood to win if $140 million in funding was committed to P2P.me through MetaDAO, but the ones that hit hinged on a $6 million milestone. Apparently they weren't going full degen—just moderately leveraged on their own future.

In a post on X, Prohp3t, a pseudonymous co-founder of MetaDAO, said the platform would've pushed P2P.me to steer clear of Polymarket had it known what was coming. They didn't support the behavior, but argued that it resembled "a guerrilla marketing stunt gone too far."

In the name of investor protection, Prohp3t said that MetaDAO would facilitate refunds for investors who want out before P2P.me's public fundraise concludes on Tuesday. A spokesperson told Decrypt that $20,000 worth of refunds out of $6.7 million committed had been requested. So far, just 0.3% of committed capital has requested an exit—apparently most backers decided the drama was cheaper than a Netflix subscription.

For P2P.me's biggest backers, the conduct also came as a surprise. Some were unaware that the India-based stablecoin firm was betting on its own fundraise, two people familiar with the matter told Decrypt. Imagine pitching your vision to seasoned VCs, then mooning your own token in the group chat.

Before it began soliciting funds on MetaDAO, P2P.me raised $2 million in a seed funding round led by Coinbase Ventures and Multicoin Capital. A Coinbase Ventures spokesperson told Decrypt that the firm hasn't allocated beyond the initial fundraise. No additional checks means no additional headaches, apparently.

At the time that P2P.me placed its bets on Polymarket, the firm said on X that it had only received a $3 million "oral commitment" from Multicoin, which wasn't binding. On top of that, the wagers were made 10 days before the public fundraising campaign went live, the company added. Nothing says conviction like betting on your own raise when the money's still technically vapor.

P2P said that it named its Polymarket account "P2P Team" for transparency's sake. In total, the account has made 27 predictions. Its biggest win so far, $8,173, came in January. The firm had wagered that another MetaDAO project wouldn't receive $100 million in commitments. Turns out predicting failure for your neighbors is more reliable than predicting your own success—who knew