Ethereum co-founder Vitalik Buterin has publicly defended prediction markets (PMs), arguing they serve as a critical "truth-seeking" mechanism and "an antidote for crazy opinions" on emotionally charged topics, in contrast to the sensationalism often found on social media. The comments were made in a series of posts on Farcaster, where Buterin engaged with critics who labeled such markets as immoral gambling, particularly on tragic events like wars.
Buterin countered that small-scale markets on large events do not create dangerous incentives for individuals to cause harm, a risk he noted is also present in traditional stock markets. He emphasized that PMs, with prices bounded between 0 and 1 representing probability, suffer less from manipulation, reflexivity, and pump-and-dump schemes common in other asset classes. When directly questioned about "assassination markets," Buterin stated his opposition and outlined social and technical measures, like weakening oracles or historical features like Augur's "vote unethical" design, to prevent them.
The debate coincides with a breakout year for the prediction market sector in 2025. A key driver has been the integration of PM data into mainstream finance. Polymarket, a leading decentralized prediction market built on Polygon, was tapped by Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), to distribute its data to global financial firms for risk management. It also secured a partnership with social media platform X (formerly Twitter). These developments helped Polymarket achieve a record daily trading volume of $179 million.
However, the competitive landscape is shifting. While Polymarket has long been the Web3 leader, it faces a strong challenge from Kalshi, which has tokenized its smart contracts and partnered with Solana-based platforms like Jupiter. Kalshi now controls approximately 73% of the market's volume, a position partly gained due to Polymarket's ban in the U.S. since 2022. Polymarket has since resolved its regulatory issues and is planning a U.S. re-entry, though it remains to be seen if it can reclaim dominance. Furthermore, a recent Polygon network downtime affected Polymarket, reportedly prompting its team to accelerate its Layer 2 migration plans.
