Ethereum co-founder Vitalik Buterin publicly defended prediction markets in December 2025 as tools for information accuracy rather than just gambling platforms. On December 21, he shared these views with posts on Farcaster.
Buterin framed prediction markets as a response to misinformation on social media. He said they offer measurable accountability during periods of heightened online fear. His comments came amid ethical debate about betting on real-world crises.
The discussion gained urgency as prediction markets expanded into finance and public discourse. Platforms now influence risk planning and market sentiment.
Can markets priced by money offer clearer signals than viral opinions?
Buterin argued that prediction markets reward accuracy through financial exposure. Users risk capital when making claims. Wrong predictions can lead to losses rather than social media attention.
On platforms like X, consumers gain reach by posting alarming claims. These often carry no penalty when proven false. According to Buterin, prediction markets change that dynamic. He shared how checking Polymarket after reading dramatic headlines reduced anxiety. Low probabilities offered a calmer reference point than fear-driven posts designed for engagement.
In 2025, prediction markets expanded beyond crypto-native audiences. Polymarket data began serving financial institutions. The platform partnered with the parent company of the New York Stock Exchange.
That parent firm, Intercontinental Exchange, distributed Polymarket data to hedge funds. Firms used the data for scenario analysis and risk planning. Polymarket also partnered with X for data visibility. Daily trading volume reached a record $179 million. Sports seasons and election markets helped drive broader participation.
While Polymarket led Web3 prediction markets for years, rivals gained ground. Kalshi tokenized its contracts and integrated with Jupiter on Solana. Kalshi now controls 73% of prediction market volume. Growth followed Polymarket’s ban in the US in 2022. Polymarket later resolved regulatory issues and plans to return to the US.
Technical challenges also affected Polymarket. Downtime on Polygon pushed the team to accelerate its layer two roadmap. A planned POLY token launch may boost activity through airdrop incentives.
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Critics raised concerns about incentives to cause harm. Cassie Heart, founder of Quilibrium, warned that markets could motivate bad actors. Buterin addressed that risk directly. He said small decentralized markets cannot influence large global events. He compared them to traditional finance, where disaster-linked profits already exist on a larger scale.
Political actors and funds can profit by shorting stocks or buying options. These positions exceed volumes seen on prediction markets. According to Buterin, prediction markets still offer more transparent signals than polls.
Vitalik Buterin presents prediction markets as accountability-driven tools that counter misinformation through the mechanism of financial risk. Platforms like Polymarket gained traction across finance, sports, and crypto. As institutions keep adopting market-based signals, prediction markets continue to reshape how information, risk, and probability circulate in the digital economy.