In accordance with PANews, prediction markets remain one of the most hyped sectors in crypto, with Polymarket recording over $36 billion in cumulative trading volume and raising a strategic round at a $9 billion valuation. However, IOSG highlights several structural issues that could limit long-term growth. Prediction markets rely on discrete, non-recurring real-world events, which are inherently low-frequency and scarce. Unlike stock markets, they lack fundamental value and depend heavily on user interest in event outcomes. Additionally, the long settlement periods and information asymmetry in certain events, such as politics, create challenges for liquidity and fairness. The article also notes the subjective nature of event definitions and the risk of information bubbles among user bases. While prediction markets may serve as an on-ramp for new users, IOSG urges caution against overestimating their scalability and long-term potential.
IOSG: Prediction Markets Face Structural Challenges Despite Rapid Growth
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