Original Title: Truth Comes Later
Original Author: Thejaswini M A, Token Dispatch
Original Translation: Bitpush News
Every time the prediction market becomes controversial, we keep going in circles around one question without ever truly confronting it:
Does the prediction market really matter about the truth?
Not about accuracy, not about practicality, nor whether they outperform polls, journalists, or the prevailing trends on social media. Rather, it's about...The truth itself.
Prediction markets assign prices to events that have not yet occurred. They are not reporting facts, but rather assigning probabilities to an open, uncertain, and unknowable future. Somehow, we have started treating these probabilities as some form of truth.
For most of the past year, prediction markets were basking in the glow of their triumphant parades.
They outperformed polls, outperformed cable news, and outperformed experts with PhDs and PowerPoint presentations. During the 2024 U.S. election cycle, platforms like Polymarket reflected reality almost faster than all mainstream forecasting tools. This success gradually solidified into a narrative: prediction markets are not only accurate but also superior—a purer way to aggregate truth, a more authentic signal reflecting people's beliefs.
Then, January arrived.
A new account appeared on Polymarket, placing a bet of about $30,000 that Venezuela's president, Nicolás Maduro, would be removed from office before the end of the month. At the time, the market considered the likelihood of this outcome extremely low—single-digit probability. This looked like a bad bet.
Several hours later, the U.S. military arrested Maduro and took him to New York to face criminal charges. The account was closed out, generating profits of over $400,000.
The market is right.
And this is exactly the problem.
People often tell a comforting story to predict the market:
The market aggregates dispersed information. People with different opinions support their beliefs with money. As evidence accumulates, prices change. The crowd gradually approaches the truth.
This story assumes an important premise: the information entering the market is public, noisy, and probabilistic—such as tightening polls, candidate missteps, storm shifts in direction, or companies missing earnings expectations.
But the Maduro deal is not like that. It's not about reasoning; it's more about precise timing.
At this moment, the prediction market no longer seems like a smart forecasting tool, but rather begins to appear as something else: a place where proximity triumphs over insight, and access outweighs interpretation.
If the market is accurate because someone possesses information that no one else in the world knows and cannot know, then the market is not discovering the truth, but rather monetizing information asymmetry.
The importance of this distinction is far greater than the industry is willing to admit.
Accuracy may be a warning. Proponents of market predictions often repeat the same line when facing criticism: if there is insider trading, the market will react earlier, thus helping others. Insider trading would accelerate the revelation of the truth.
This argument sounds clear in theory, but in practice, its logic tends to unravel.
If a market becomes accurate due to the inclusion of leaked military operations, confidential intelligence, or government internal schedules, then at any level with public significance, it is no longer an information market. It becomes a shadowy venue for secret dealings. There is an essential difference between rewarding superior analysis and rewarding proximity to power. Markets that blur this boundary will eventually attract regulatory attention—not because they are inaccurate, but precisely because they are overly accurate in the wrong way.
Voron23 @0xVoron insider wallet confirmed on Polymarket.
"They are making over $1 million a day from the Maduro event. I've seen this pattern too many times to doubt it: insiders always win. Polymarket just makes it easier, faster, and more visible. Wallet 0x31a5 turned $34,000 into $410,000 in 3 hours."
The Maduro incident is unsettling not only because of the scale of the returns but also because of the context in which these market outbursts occurred.
Prediction markets have evolved from a niche novelty to a distinct financing ecosystem taken seriously by Wall Street. According to a Bloomberg Markets survey from last December, traditional traders and financial institutions view prediction markets as a financial product with lasting viability, although they also acknowledge that these platforms highlight the blurred line between gambling and investment.
Trading volume has surged. Platforms like Kalshi and Polymarket now have annual notional trading volumes in the billions of dollars—Kalshi alone processed nearly $24 billion in 2025, with daily trading records continuously being broken as political and sports contracts attract liquidity on an unprecedented scale.
Despite regulatory scrutiny, the daily trading volume in prediction markets hit a new record, reaching approximately $700 million. Regulated platforms like Kalshi dominate trading volume, while crypto-native platforms maintain a central role culturally. New terminals, aggregators, and analytical tools continue to emerge on a weekly basis.
This growth has also attracted the interest of major financial capital. The owner of the New York Stock Exchange has committed to providing up to $200 million in strategic investment to Polymarket, valuing the company at around $900 million. This marks Wall Street's belief that these markets can compete with traditional trading venues.
However, this surge is colliding with regulatory and ethical ambiguity. Polymarket recently regained conditional approval in the U.S. only after being banned in its early days for operating without registration and paying a $1.4 million fine to the CFTC. Meanwhile, lawmakers such as Representative Ritchie Torres have proposed specific legislation aimed at banning government insiders from trading after Maduro-related events, arguing that the timing of these bets appears more like insider trading opportunities than informed speculation.
However, despite legal, political, and reputational pressures, market participation has not declined. In fact, prediction markets are expanding into more areas beyond sports betting, such as corporate earnings indicators. Traditional gambling companies and hedge fund divisions are now assigning specialists to take advantage of arbitrage and pricing inefficiencies.
In summary, these developments indicate that prediction markets are no longer on the fringes. They are deepening their integration with financial infrastructure, attracting professional capital, and prompting the creation of new laws, while their core operational mechanism remains fundamentally a bet on an uncertain future.
Overlooked Warning: Zelenskyy's Suit Incident
If the Maduro incident exposed issues related to insider dealings, then the Zelenskyy suit market reveals a deeper problem.
In mid-2025, Polymarket launched a market betting on whether Ukrainian President Volodymyr Zelenskyy would wear a suit before July. It attracted massive trading volume—hundreds of millions of dollars. What seemed like a joke market turned into a governance crisis.
Zelenskyy appeared in a black jacket and pants designed by a famous male fashion designer. The media called it a suit, and fashion experts also called it a suit. Anyone with eyes can see what's going on.
But the oracle vote determination:Not a suit.
Why?
The reason is that a few large token holders have bet substantial amounts of money on an opposite outcome, while simultaneously holding enough voting power to push through a resolution favorable to themselves. The cost of bribing the oracles is even lower than the potential compensation they could gain.
This is not a failure of the decentralized concept, but a failure in the design of the incentive mechanism. The system operated exactly according to its predefined rules — a human-operated oracle, whose honesty entirely depends on the "cost of lying." In this case, lying clearly proved more profitable.
It is easy to view these incidents as extreme cases, growing pains, or temporary setbacks on the path toward a more perfect prediction system. But I believe this interpretation is wrong. These are not accidental occurrences; rather, they are inevitable outcomes resulting from the combination of three factors:Financial incentives, ambiguously worded rules, and governance mechanisms that are not yet fully developed.
Prediction markets do not discover the truth; they merely reach a consensus.Settlement plan.
What matters is not what the majority believe, but what the system ultimately recognizes as a valid result. This determination process often resides in semantic interpretation,Power struggles and financial battlesThe intersection point. And when it involves huge profits, this intersection point will quickly become crowded with various factions.
Once this is understood, such disputes no longer seem surprising.
Regulation does not come out of nowhere.
The legislative response to Maduro's trades is predictable. A bill currently moving through Congress would prohibit federal officials and employees from trading on political prediction markets while in possession of material nonpublic information. This is not radical—it's just a basic rule.
The stock market realized this decades ago. There is no controversy about the idea that government officials should not use their privileged access to state power for personal gain. The prediction market has only just now discovered this principle because it has consistently insisted on pretending to be something else.
I think we have overcomplicated this matter.
A prediction market is a place where people bet on outcomes that have not yet occurred. If the event unfolds in the direction they bet on, they make money; if not, they lose money. Any other descriptions we provide are after the fact.
It doesn't become something else simply because the interface is cleaner or the odds are expressed as probabilities. Nor does it become more serious just because it runs on a blockchain or economists find the data interesting.
What's important is motivation. You get rewarded not because you have insight, but because you accurately predicted what will happen next.
What I think is unnecessary is that we have always insisted on making this kind of activity sound more noble. Calling it prediction or information discovery does not change the risks you take or the reasons for taking those risks.
To some extent, we seem unwilling to honestly admit that:People are essentially trying to place bets on the future.
Yes, they want to. It's nothing.
But we shouldn't pretend any longer that it's something else.
The growth of prediction markets essentially stems from people's demand to bet on "narratives"—whether they pertain to elections, wars, cultural events, or reality itself. This demand is genuine and enduring.
Institutions use it to hedge against uncertainty, retail investors use it to practice their beliefs or for entertainment, and the media view it as a barometer. None of these need to clothe this activity in any disguise.
In fact, it is precisely this disguise that creates friction.
When the platform positions itself as a "truth machine" and occupies a moral high ground, every controversy appears as a life-or-death crisis. When the market settles in a troubling way, the issue is elevated into a philosophical dilemma, rather than what it truly is — a dispute over settlement methods within a high-risk betting product.
Mismatch of expectations,Arising from the dishonesty inherent in the narrative itself.
I am not against prediction markets.
They are one of the relatively honest ways for humans to express beliefs in the face of uncertainty, often revealing troubling signals more quickly than public opinion polls. They will continue to grow.
But if we idealize them as something more noble, we are actually being irresponsible toward ourselves. They are not epistemological engines, but financial instruments tied to future events. Recognizing this distinction can actually make them healthier—leading to clearer regulation, more explicit ethics, and more reasonable design.
Once you admit that you are operating a betting product, you will no longer be surprised by the presence of betting activities within it.
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