These crypto prediction markets are quickly becoming popular, as users can make bets on the outcomes of events using cryptocurrency. These platforms are using blockchain technology and stablecoins to increase transparency and decrease volatility. Principal players are beginning to take shape in this dynamic space. Polymarket, Drift, Polkamarkets, and Zeitgeist come from very different angles and approaches to prediction markets.
Polymarket, which is now the largest of the prediction markets, runs on the USDC stablecoin. This platform is huge for anyone to bet on anything just at almost any event. You can bet on any and all major political happenings to developments in the crypto space. U.S. residents can’t trade on Polymarket due to regulatory issues. This state of affairs highlights the persistent compliance pitfalls in the industry.
Prediction markets operate under two primary payout mechanisms: fixed and parimutuel. As with many things in life, the answer is that it depends—specifically on the market structure and the desired risk-return tradeoff for market participants. Platforms such as Azuro and Monaco Protocol are quickly building up their underlying infrastructure. This enables more rapid application development and establishment of global liquidity networks.
Azuro allows developers to build prediction applications in under five minutes. They’d be able to do this through the creative Liquidity Tree ecosystem model. This simplified method drastically reduces the cost and complexity of building prediction market applications. Monaco Protocol serves as a community-driven wagering decentralized betting layer. It offers a new global liquidity network powering decentralized prediction markets and decentralized live sports betting.
Drift Protocol on Solana created BET, a market that lets you bet with 30+ crypto assets like yield-bearing stablecoins. This new innovation creates new possibilities for users to choose from. It furthers the link between prediction markets and the broader crypto community. By design, blockchain offers greater transparency that fosters trust. At the same time, stablecoins provide an inherent stability that addresses the volatility issues typically associated with prediction markets.
Of course, regulatory barriers are the second major hurdle, as showed by the U.S. crackdown on Polymarket. Addressing these challenges will be key to the further development and mainstream acceptance of crypto prediction markets. Platforms are pushing the envelope quickly with blockchain technology and testing out new payout models. This recasting of established activity is indicative of how these markets can upend existing betting and forecasting markets.
