Overview
- Vitalik Buterin says markets are over‑converging to short‑duration crypto price bets and sports‑style wagering that favor engagement over information discovery.
- He argues the current model leans on uninformed traders to subsidize informed participants, skewing platform incentives toward volume.
- His proposal positions prediction markets as hedging tools where users accept small negative returns to reduce real‑world risk, such as offsetting election outcomes that could hurt a portfolio.
- He envisions AI‑built, personalized baskets linked to expected expenses and denominated in productive, yield‑bearing assets rather than fiat‑like stablecoins.
- Trading volumes reportedly quadrupled over the past year with liquidity concentrated on Polymarket and Kalshi, while a late‑2025 third‑party auth breach and expectations of greater institutional and regulatory engagement highlight the sector’s growing pains.