Rain Protocol’s SDK v2 is lowering the barrier to prediction market creation

Anyone can argue with their friends about whether a candidate will win an election, a company will beat earnings, or a celebrity couple will stay together. Turning that disagreement into a functioning market where people can put money behind their predictions is considerably more complicated.

Behind every prediction market is infrastructure for creating the market, matching trades, managing liquidity, settling positions, and deciding what happens when an outcome is disputed. Until now, much of that process has been kept concentrated among a small number of platforms operating the market themselves. But as prediction markets attract more users and use cases, attention is increasingly shifting from who can trade on them to who can build them.

That is the problem Rain Protocol is trying to address with the second version of its software development kit (SDK). The permissionless prediction market protocol has launched SDK (Software Development Kit) v2, allowing developers and AI agents to create and operate independent prediction market platforms on networks like Arbitrum One. The update also includes migration guides to help existing users move from v1 to v2.

The update brings much of the infrastructure that would otherwise need to be built independently into the protocol itself, including market creation, trading, settlement, resolution, disputes, and appeals. For developers, that means less work happens on the infrastructure layer and more can happen at the product layer, where decisions about what kinds of markets to create and how users interact with them are made. 

The new SDK is also designed for both human developers and AI agents. Its machine-readable documentation and built-in agent skills allow AI coding tools to understand the protocol and build on top of it more independently. That matters as AI agents take on a larger share of software development tasks. In the context of prediction markets, Rain is betting that those agents could eventually do more than assist developers. They can help create and operate markets themselves. 

Roy Shaham, CEO of Rain Protocol said, “As the market expands, we expect the biggest shift to come from users being less passive and increasingly a part of the building process. Our goal with SDK v2 is to give developers the freedom to build new types of markets, explore new ways they can be used, and shape them around their own ideas, and we’re eager to see what our community builds with it.”

On the trading side, the update also changes how trading can work by adding an on-chain order book alongside Rain’s existing automated market maker (AMM). The two systems give builders different ways to structure trading. Some markets can continue to depend on automated liquidity through an AMM, while others can allow buyers and sellers to place orders that are matched directly on-chain. That distinction can matter for markets with different levels of liquidity, trading activity, or user behavior.

Other updates handle how users interact with markets once they are live. Users can approve a session once instead of authorizing each individual action, while builders can receive real-time updates on trades and other market activity. The SDK also allows users to convert collateral into Yes and No positions, and convert them back into collateral, without changing the market price.

If prediction markets continue to expand beyond a handful of large platforms, the next phase of the category may be shaped as much by the people building markets as by the people betting on them. Rain’s SDK v2 is one example of how prediction markets are becoming easier to build, not just use.