Analysis of New Trends and Development Prospects in the Prediction Market Industry

Prediction markets can be roughly divided into two major camps: non-sports and sports. Currently, the non-sports markets have not been fully developed and mainly cover areas such as cryptocurrencies, political events, and cultural events. A well-known prediction platform has become a leader in the non-sports market due to its political event-related markets.

In terms of overall trading volume from the beginning of the year to now, if we take the sports market into account, the performance of certain sports prediction markets can be comparable to that of leading non-sports platforms.

Recently, several emerging prediction market projects have been launched or are in development. These projects involve different blockchain ecosystems and explore various innovative mechanisms. New teams generally focus on hot topics such as permissionless market creation and AI-assisted settlement.

Sports prediction markets have built a solid user base in the Web2 environment, but attracting these users to cryptocurrency platforms still faces challenges. Traditional sports betting platforms have huge marketing budgets and established brand influence, which adds competitive pressure to the crypto prediction market. Notably, the betting amount for a single Super Bowl far exceeds the total trading volume of the current crypto prediction market.

A major development direction for prediction markets is the introduction of leveraged trading. Multiple projects are exploring leveraged mechanisms such as perpetual contracts and parlay betting, but issues of liquidation and bad debts still need to be addressed. The parlay betting market is essentially a natural leveraged betting platform and is expected to become a focal point in the future.

From a market mechanism perspective, prediction markets can be divided into two categories: Web2.5 and Web3. Web2.5 platforms use cryptocurrency as a payment method, but the counterpart is the team behind the platform. Web3 platforms have a certain level of interaction on-chain, usually adopting AMM or order book models to match bets.

Interestingly, some cryptocurrencies themselves are also playing the role of a prediction market. Users holding such tokens can benefit by predicting the correct direction and focus. Emerging protocols are trying to combine the features of prediction markets and meme coins to provide additional incentives for early users.

The profit model of prediction market platforms mainly includes charging transaction fees, sharing trader bonuses, and accumulating counterparty earnings, among others. Different platforms adopt strategies that emphasize different aspects.

Looking to the future, artificial intelligence agents are expected to become important participants in the prediction market. They can quickly respond to news, manage orders, and execute betting strategies. It is expected that within the next few years, at least one emerging protocol will reach a trading volume level that competes with current leading platforms.

In order to maintain market activity, various platforms may need to take a large number of incentive measures. It is reassuring that the trading volume of non-election-related markets on mainstream prediction platforms is showing an upward trend, which provides a positive signal for market vitality in the post-election period.