It's not about accuracy, practicality, or whether they outperform polls, journalistic reports, or social media trends. It's about the truth itself.
Article author and translator: Thejaswini MA, Token Dispatch, BitpushNews
Article source: ChainCatcher
Whenever market predictions become controversial, we always seem to circle around the same question, but never truly confront it:
Does predicting the market really concern the truth?
It's not about accuracy, practicality, or whether they outperform polls, journalistic reports, or social media trends. It's about the truth itself.
Prediction markets price events that haven't happened yet. They don't report facts; they assign probabilities to an open, uncertain, and unknowable future. At some point, we began treating these probabilities as some form of truth.
For most of the past year, prediction markets have been basking in their victory parade.
They beat polls, cable news, and experts with PhDs and PowerPoint presentations. In the 2024 US election cycle, platforms like Polymarket reflected reality almost faster than any mainstream prediction tool. This success has solidified into a narrative: prediction markets are not only accurate, but superior—a purer way of aggregating truth, a more authentic signal of people's beliefs.
Then, January arrived.
A new account appeared on Polymarket, betting approximately $30,000 that Venezuelan President Nicolás Maduro would be ousted by the end of the month. At the time, the market considered the outcome extremely unlikely—a single-digit probability. It looked like a bad trade.
Hours later, U.S. forces arrested Maduro and took him to New York to face criminal charges. The account was liquidated, yielding a profit of over $400,000.
The market is right.
And that is precisely the problem.
A comforting story is often told about predicting the market:
The market aggregates fragmented information. People with differing viewpoints use money to support their beliefs. As evidence accumulates, prices fluctuate. The crowd gradually approaches the truth.
This story assumes an important premise: that the information entering the market is public, noisy, and probabilistic—such as tighter polls, candidate mistakes, shifts in the storm, and companies failing to meet expectations.
But the Maduro deal was not like that. It wasn't like reasoning; it was more like precise timing.
At this moment, the market prediction tool no longer seems like a smart predictive tool, but begins to resemble something else entirely: a place where proximity trumps insight and channels trump interpretation.
If the market is accurate because someone possesses information that no one else in the world knows or can know, then the market is not discovering the truth, but rather monetizing information asymmetry.
The importance of this distinction far exceeds what the industry is willing to acknowledge.
Accuracy can be a warning sign. When faced with criticism, proponents of prediction markets often repeat the same argument: if there's insider trading, the market will react earlier, thus helping others. Insider trading accelerates the revelation of the truth.
This argument sounds clear in theory, but in practice, its logic falls apart.
If a market becomes accurate because it contains leaked military operations, classified intelligence, or internal government timelines, then it ceases to be an information market at any level of public significance. It becomes a shadowy arena for clandestine transactions. There is a fundamental difference between rewarding superior analysis and rewarding access to power. Markets that blur this line will eventually attract regulatory attention—not because they are inaccurate, but precisely because they are excessively precise in the wrong way.
Voron23 @0xVoron Polymarket has confirmed insider wallets.
"They make over $1 million a day on the Maduro issue. I've seen this pattern far too many times, without a doubt: insiders always win. Polymarket just makes it easier, faster, and more visible. Wallet 0x31a5 turned $34,000 into $410,000 in 3 hours."
What makes the Maduro affair unsettling is not only the scale of the returns, but also the context in which these markets have erupted.
Prediction markets have evolved from a fringe novelty into an independent funding ecosystem taken seriously by Wall Street. According to a Bloomberg Markets survey last December, traditional traders and financial institutions view prediction markets as financial products with enduring viability, although they also acknowledge that these platforms expose the gray area between gambling and investing.
Trading volume has surged. Platforms like Kalshi and Polymarket now have annual nominal trading volumes in the billions of dollars—Kalshi alone processed nearly $24 billion in 2025, with daily trading records constantly being broken as political and sports contracts attract liquidity on an unprecedented scale.
Despite scrutiny, prediction markets saw record daily trading activity, reaching approximately $700 million. Regulated platforms like Kalshi dominated trading volume, while crypto-native platforms maintained a culturally central role. New endpoints, aggregators, and analytics tools emerged weekly.
This growth has also attracted the interest of heavyweight financial capital. The owners of the New York Stock Exchange pledged up to $2 billion in strategic deals to Polymarket, valuing the company at approximately $9 billion, signaling Wall Street's belief that these markets can compete with traditional trading venues.
However, this frenzy is clashing with regulatory and ethical ambiguities. Polymarket, after being banned for operating without registration and paying a $1.4 million CFTC fine, only recently regained conditional U.S. approval. Meanwhile, lawmakers like Representative Ritchie Torres have introduced a bill to ban government insiders from trading following the Maduro reciprocation, arguing that the timing of these bets appears more like opportunities for advance trading than informed speculation.
However, despite legal, political, and reputational pressures, market participation has not declined. In fact, the prediction market is expanding from sports betting to more areas such as corporate earnings metrics, with traditional gambling companies and hedge fund departments now arbitrageurs and pricing inefficient trades.
In conclusion, these developments indicate that prediction markets are no longer on the fringes. They are deepening their ties with financial infrastructure, attracting professional capital, and prompting the enactment of new laws, while their core operating mechanism remains essentially a bet on an uncertain future.
An overlooked warning: the Zelensky suit incident
If the Maduro affair exposed insider problems, then the Zelensky suit market reveals a deeper issue.
In mid-2025, Polymarket launched a marketplace for betting on whether Ukrainian President Volodymyr Zelensky would wear a suit before July. It attracted massive trading volume—hundreds of millions of dollars. What seemed like a joke marketplace escalated into a governance crisis.
Zelensky appeared wearing a black jacket and trousers designed by a well-known menswear designer. The media called it a suit, and fashion experts also referred to it as such. Anyone with eyes could see what had happened.
But the oracle voted: it's not a suit.
Why?
The reason is that a small number of large token holders have bet huge sums of money on the opposite outcome, and they hold enough voting power to push a resolution in their favor. The cost of bribing oracles is even less than the potential payout they might receive.
This is not a failure of the decentralized concept, but a failure of the incentive mechanism design. The system operates entirely according to preset rules—a human-controlled oracle whose honesty depends entirely on the "cost of lying." In this case, lying is clearly more profitable.
It's easy to dismiss these events as extreme cases, growing pains, or temporary malfunctions on the road to a more perfect predictive system. But I believe this interpretation is flawed. These are not coincidences, but the inevitable result of a combination of three factors: financial incentives, vague rule definitions, and an imperfect governance mechanism.
Prediction markets do not discover the truth; they merely reach a settlement agreement.
What matters is not what the majority believes, but what the system ultimately deems a result valid. This determination process often occurs at the intersection of semantic interpretation, power struggles, and financial maneuvering . And when huge sums of money are involved, this intersection quickly becomes crowded with various factions.
Once this is understood, such controversies no longer seem surprising.
Regulation does not come out of thin air.
A legislative response to the Maduro deal was predictable. A bill currently progressing in Congress would prohibit federal officials and staff from trading in political prediction markets when they have significant non-public information. This isn't radical; it's just a basic rule.
The stock market figured this out decades ago. The idea that government officials shouldn't profit from their access to state power is undisputed. Prediction markets are only realizing this now because they've been insisting on pretending to be something else.
I think we've overcomplicated this.
Prediction markets are where people bet on outcomes that haven't yet occurred. If events unfold as they've bet, they make money; if not, they lose money. Further details are beyond the scope of this discussion.
It won't become something else just because the interface is simpler or the odds are expressed in probabilistic terms. Nor will it become more serious just because it runs on a blockchain or because economists find the data interesting.
The key is motivation. You get paid not because you have insight, but because you correctly predict what will happen next.
I think it's unnecessary for us to keep trying to make this activity sound more noble. Calling it prediction or information discovery doesn't change the risk you're taking or the reason you're taking that risk.
To some extent, we seem reluctant to openly admit that people actually want to bet on the future.
Yes, they think so. It's nothing.
But we should stop pretending it's something else.
The growth of the prediction market is essentially driven by people's demand for betting on "narratives"—whether it be elections, wars, cultural events, or reality itself. This demand is real and enduring.
Institutions use it to hedge against uncertainty, retail investors use it to practice their beliefs or for entertainment, and the media sees it as a bellwether. None of this needs any embellishment.
In fact, it is this very pretense that creates friction.
When a platform positions itself as a "truth machine" and occupies the moral high ground, every controversy feels like a life-or-death crisis. When the market settles in a disturbing way, the event escalates into a philosophical dilemma rather than its essence—a controversy over settlement methods in a high-stakes betting product.
The misalignment of expectations stems from the dishonesty of the narrative itself.
I am not against predicting markets.
They are one of the relatively honest ways humans express their beliefs amidst uncertainty, often revealing unsettling signals faster than polls. They will continue to grow.
However, it would be irresponsible of us to glorify them as something more sublime. They are not epistemological engines, but rather financial instruments linked to future events. Recognizing this distinction will precisely make them healthier—clearer regulation, more explicit ethics, and more rational design will all follow.
Once you acknowledge that you are operating a betting product, you will no longer be surprised by betting activity within it.
