Blockchain is Rewriting the Rules of Prediction Markets for the People

The evolution of prediction markets is witnessing a transformative shift from Web2 to Web3, as platforms like Polymarket, Kalshi, and Myriad lead the charge in leveraging blockchain technology to redefine how individuals and institutions forecast and bet on real-world outcomes. This transition is driven by a confluence of venture capital interest, regulatory developments, and the inherent advantages of decentralized infrastructure, which collectively position Web3 prediction markets at the forefront of a rapidly expanding sector.

In recent months, Polymarket has emerged as a dominant player in the field. In August, the platform generated over $644 million in trading volume, a testament to its growing influence. Built on Ethereum and Polygon Layer 2, Polymarket facilitates bets on real-world events using stablecoins and offers a decentralized model that outperforms traditional Web2 betting platforms in terms of user engagement and transaction efficiency. Around 40% of Polymarket’s trading volume is attributed to sports betting, with the remaining portion allocated to bets on cryptocurrency price movements.

Kalshi, a Web2-based prediction market, also made headlines in 2024 after winning a court case against the Commodity Futures Trading Commission, securing the right to offer regulated political betting contracts. While Kalshi operates outside the Web3 framework, its success in navigating regulatory hurdles has created a precedent for other platforms seeking legitimacy in the space.

Meanwhile, Myriad, a decentralized prediction market protocol, is embedding itself into Web3 media and social ecosystems. The platform allows users to bet on real-world events while simultaneously engaging with content through integrated plugins. Myriad recently hit $10 million in U.S. dollar coin trading volume, and its CEO, Loxley Fernandes, emphasizes the power of blockchain to restore user autonomy over information and value creation. “Prediction markets return the power to people to determine what is true and what is valuable,” he states.

The broader appeal of Web3 prediction markets lies in their composability, efficiency, and transparency. Unlike Web2 platforms, where each betting site operates independently with fragmented liquidity, Web3 prediction markets can be accessed and integrated across multiple apps and blockchains. This allows for deeper liquidity pools and more accurate forecasts, as traders on different platforms draw from a unified market.

For investors, the potential of Web3 prediction markets is underscored by the projected growth of the prediction market sector, which is expected to reach $95.5 billion by 2035. Stablecoin adoption is also anticipated to reach $2 trillion by 2028, further reinforcing the infrastructure supporting these markets. Venture capitalists are paying attention, with firms like Verda Ventures and Sequoia backing projects that combine regulatory compliance with innovative use of blockchain.

Ethereum, the foundational technology for many of these platforms, is also a focal point for price speculation. Analysts have predicted that Ethereum could hit $5,000 or even exceed $9,889 by 2030. This optimism is fueled by the network’s role in decentralized finance, its transition to proof-of-stake, and the adoption of Layer 2 solutions that enhance scalability and reduce transaction costs. Some platforms, like Myriad, already reflect this sentiment in user behavior, with data suggesting widespread belief in Ethereum’s ability to break its all-time high.

Despite the growing interest in Web3 prediction markets, challenges remain. Regulatory uncertainty, competition from alternative Layer 1 blockchains, and macroeconomic volatility pose risks to long-term growth. However, the increasing demand for decentralized applications, tokenized assets, and real-time economic forecasting is likely to drive continued innovation and adoption in the sector.

In summary, the future of prediction markets is increasingly being shaped by Web3. With platforms like Polymarket, Kalshi, and Myriad leading the way, the integration of blockchain technology is enabling more transparent, efficient, and user-centric betting ecosystems. As the industry continues to evolve, the convergence of decentralized infrastructure and speculative markets may unlock new dimensions of financial and informational value.