The popularity of prediction markets has been evident in recent trends. Today, let's fully interpret why prediction markets are so hot. Why is the second half of the year for speculation crucial? Next year, the prediction market sector will undoubtedly produce a leader, with valuations generally high, and the expectations for us speculators are that participation is a must.
What is a prediction market? A comprehensive interpretation of different types of platforms, gameplay, and projects.
Recently, you may have frequently seen terms like Polymarket, Predict, Bet, and Forecast. Various projects are trending, and many people say, 'The prediction market is about to explode.'
But what exactly is a prediction market? Can ordinary people really participate and make money?
Today, let's explain it clearly in the simplest way.
What is a prediction market?
'A prediction market is your judgment on future events; you can place bets like buying something. If you guess correctly, you make money; if you guess wrong, you lose money.'
It's like betting on price movements, but the object is not the currency price, but the outcome of real-world events.
For example:
• Will BTC break $100,000 tomorrow?
• Who will win the US election this year?
• Will the ETH ETF be approved on a certain date?
• Will a certain project go live on the mainnet this week?
These questions will be turned into 'event contracts', where users bet on 'will' or 'will not'.
The winners share the rewards, while the losers receive nothing.
Why has the prediction market suddenly become popular?
Prediction markets are not actually new. However, from 2024 to 2025, several reasons have led it to become a hot trend:
• ① Crypto is highly linked to real events
There are a large number of quantifiable events in the crypto space every day:
Exchange listings, mainnet launches, airdrops, regulatory policies, ETF progress…
These events are inherently suitable for creating 'prediction contracts'.
• ② Simple trading, low participation threshold
You don't need to understand complex DeFi or complete tasks.
Judge the event → Place order → Wait for results → Claim rewards.
• ③ Strong speculative and social attributes
Everyone loves to predict the future, and prediction markets turn 'opinions' into 'money-making opinions'.
• ④ Project financing continues, liquidity surges
In the past year, a large number of prediction platforms have received VC investment, causing the track's popularity to soar.
What are the hottest prediction market projects currently?
Polymarket (Ethereum / Polygon)
• Currently the hottest and most mainstream prediction markets worldwide
• Supports real-world events (politics, finance, sports, entertainment)
• Focus on 'simplicity, rich information, and real market conditions'
• Large liquidity, comprehensive events
• Disadvantage: Some regions require KYC to participate
Known as the 'black and white version of the crypto prediction market'.
Hyperliquid x Hyperstaking (self-contained ecosystem)
• Originally a derivatives exchange
• Now entering the prediction market
• Strong liquidity, good trading experience
• Almost all mainstream events are covered
• Deeply integrated with Hyperliquid financial products
Because the original trading user base is large, the growth rate is very fast.
Zeitgeist (Polkadot)
• Prediction protocols operating in the DOT ecosystem
• More decentralized
• Provides tools for users to create their own prediction markets
• Liquidity is smaller than Polymarket, but the technical features are obvious
Azuro (multi-chain)
• Focus on sports-related prediction markets
• Similar to 'decentralized sports betting protocols'
• Provides a prediction engine for projects to connect to
• Crypto sports user base is growing rapidly, and popularity is steadily increasing
Manifold (more focused on political/social events)
• Based on the Play-to-Predict model
• Use virtual points, without needing real assets
• Suitable for entertaining predictions
How can ordinary users participate in prediction markets?
Participation is actually quite simple; the summary is 'four steps':
Step 1: Prepare a wallet
Common wallets:
• MetaMask
• Rabby
• OKX Wallet
• Unisat (if supporting BTC-related predictions)
Step 2: Choose a prediction platform
Different platforms excel in different content:
• Want to predict global hot events → Polymarket
• Want to predict crypto events → Polymarket / Hyperliquid
• Want to engage in entertainment or light predictions → Manifold
• Want to play sports → Azuro ecosystem
Step 3: Recharge stablecoin USDT / USDC
Most prediction markets use USDC/USDT for trading.
Step 4: Choose an event and place a bet
Typically, the interface will include:
• 'Will / Will not'
• 'Yes / No'
• Different options (such as elections, multiple-choice events)
Odds will continuously change based on the judgments of market participants.
The price you buy in at = market consensus level.
For example:
• If 80% of people believe 'the ETH ETF will pass', then the price for 'will' could be $0.80, yielding lower returns;
• The price to buy 'not through' might be $0.20, which is riskier but offers higher returns.
Can prediction markets make money?
The answer is: yes, but it is essentially very similar to trading, requiring judgment and risk awareness.
There are usually three ways to make money:
• ① You predict correctly → Receive a reward of 1 dollar
For example, if you spend $0.60 buying 'will',
The event outcome is determined to be 'will',
You earn $1 - 0.60 = $0.40 (approximately 66% return).
• ② Engaging in contrarian sentiment trading
When the market is extremely biased towards one side, the price for the other side will be very low.
Similar to value investment models.
• ③ High-frequency buying and selling (like futures)
Before the event is over, the contract price will fluctuate up and down,
You can buy low and sell high.
What are the risks?
Although prediction markets are simple, real risks exist:
• Uncertainty of event outcomes
• Poor liquidity leads to an inability to sell immediately
• Some platforms are subject to regulatory restrictions
• Price fluctuations of hot events are extremely large
• Incorrect information may lead to misjudgment
Prediction markets are fun, but like trading, there is no guarantee of profit.
Summary: Why are prediction markets so important?
A prediction market is not just a temporary trend; it is a new mechanism that 'monetizes the future and makes information transparent'.
Its significance lies in:
• Helps us better understand the real probabilities of future events
• Brings new application scenarios and liquidity to the crypto industry
• Allows ordinary users to participate in 'future price discovery' with the lowest threshold
• Provides a 'financial entry point for real-world events' for Web3
• The more mature prediction markets become, the more transparent and efficient the entire crypto ecosystem will be
In simple terms:
Prediction markets are paving a new track for the future of blockchain; they are real, transparent, and open, and will become one of the most important foundational applications in Web3.
Lastly, for those seeking to benefit without much effort, there is a very crucial point: currently, the market valuation of prediction markets is generally high. The most important point is that compared to the original swap testnet interactions, one must continuously provide shares to exchanges. Ultimately, the share for those benefiting without much effort will be greatly squeezed. However, for prediction markets, the overall valuation in the current race is extremely high, and platforms that follow this model typically use points to retain customers, making it the most important channel. Therefore, once an airdrop occurs, the share generally does not give much to exchanges, but for those benefitting without much effort, it will be relatively much higher. Coupled with the overall market valuation here, I can responsibly say that the second half of benefiting without much effort, including the first half of next year, in the decentralized exchange and prediction market space, no matter what, these two tracks must be participated in. Next, we will comprehensively filter projects through these two tracks for in-depth participation. I believe I have mentioned the project standx many times; the prediction market track will soon be launched. 2025 is just around the corner; let's go!