2025 Will Be The Year Decentralized Prediction Markets Explode
Not a user adoption type explosion, we can't truly predict the scale of that, but what's coming in 2025 is a launch wave of varying decentralized prediction markets.
Prediction markets picked up steam in 2024 Q3, growing 565.4% due to pundits betting on the upcoming US elections. This has driven volume on the top 3 prediction markets to $3.1 billion in Q3, up from $466.3 million in Q2.
However, the majority of volume was on Polymarket, which accounted for 99% of market share in September. Its betting volume grew by 713.2%, and transactions grew by 848.5% in the same period. Some $1.7 billion of bets have been placed on the “US Presidential Election Winner” since the start of 2024, accounting for ~46% of Polymarket’s yearly volume. - Coingecko report
Since Polymarket’s success, it was clear that alternatives were going to pop out in great numbers.
All simply because people love to gamble, about the silliest of things really.
When it comes to betting, we are looking at a $242 billion industry, majorly dominated by sports betting but with decentralized prediction markets, we're looking at limitless shits to bet on.
$242 billion is really rookie numbers compared to what's coming.
Provided there's at least two dumb enough individuals to hold both sides of the bet, any prediction will get on the market, judging by the peer-to-peer design of these platforms.
So far, I've not come across a prediction market that is tokenized, everything seems mostly focused on volumes to drive revenue, rather than the broken practice of token generation for every shit project out there in crypto — just for VCs to dump a huge pile for profit later on.
Make no mistake, VCs are active in this new market segment, matter of fact, a decentralized prediction market was recently funded $4 million, though not in traditional VC funding sense as this was through a public NFT sale, which attracted Vitalik Buterin, buying 400 pieces valued at 32 ETH according The Block report
Truemarkets, the recently funded decentralized prediction market mentioned, seems to market itself as a “fact-checking” engine, highlighting truth behind headlines and offering real-time sentiment data.
Interesting, is what I'll call it, given my limited exposure to decentralized prediction markets.
That said, given that current options in decentralized prediction markets have obvious limitations like the absence of flexible odds essentially influencing returns on investment(ROI) and the absence of tokenization of the market structures to make room for more incentivized in-platform operations, 2025 will see a massive growth in new options in decentralized prediction markets.
By this assessment, we can argue that current design limits mass adoption as it doesn't appeal to the broader market segment due to the absence of an obvious bait — the potential for outrageous profits on bets.
The masses often want to make the most money while risking very little. What's comical is that they will repeatedly lose small-stake bets chasing moon-slips without realising that their cumulative volume has reached levels they would generally not want to risk on bets with smaller potential wins.
This flawed mindset will be exploited very soon with new decentralized prediction markets, it's really just a matter of when.
We are looking at something that will be on a similar scale to perpetual contracts, only that with these prediction markets, you are not limited to trading assets listed by centralized exchanges, but literally any shit you can think of.
In an era of cashless economies, services like this would play a pivotal role in enabling every bet people engage in over some of the pettiest of things.
A truly flexible market to capitalize on and having this function on a fully autonomous and transparent system, with potential future incentives makes it even more attractive to everyday people.