People enjoy testing their analytical and visionary skills in betting and making predictions. Crypto prediction market platforms enable customers to not only check their intuition but also make some money out of it. However, many crypto enthusiasts have no idea that such opportunities even exist. Let’s fill in these awareness gaps.

What Is a Crypto Prediction Market?

A crypto prediction market is a decentralised platform where participants can trade on any forecasts for the future which the community finds relevant using cryptocurrency. These markets allow users to create, buy, and sell shares in the outcome of a specific event. The price of such shares changes along with the perceived likelihood of the event happening.?

Crypto-enabled predictions range from outcomes of the events specific to the industry (e.g. Bitcoin price after the next halving) to results of any noteworthy real-world scenarios like elections, sports games, etc.?

How Does It Work?

Platform users create a market for any event with a binary outcome (e.g., yes/no, win/lose) or leverage a sliding scale, where the participants can wager on the degree to which something will take place.?

Participants buy shares on the outcomes they believe will occur. The market creator sets an initial share price, but it eventually will change depending on what the community generally believes will happen.?

Once the event’s outcome is known, the market resolves. The results are reported through reliable sources like trusted feeds or fair agreements. Those who guessed the outcome correctly get cryptocurrency rewards. The ones who wagered on the wrong outcome lose their bets.?

Decentralised prediction markets rely on smart contracts to secure the market rules and transaction history. Shares in the correct outcome pay out at a predetermined value (usually 1 unit of the base cryptocurrency).?

Popular Crypto Prediction Platforms

Some of the most popular platforms for crypto prediction markets are Polymarket, Gnosis, Hedgehog, Projection Finance, Better Fan, Feel, and many other markets for you to explore. The main blockchains used by these decentralised platforms are BNB chain, Ethereum and Polygon. While some prediction markets rely on a single network, others support multiple blockchain options. We’ll discuss some of the crypto prediction market platforms in more detail.

Polymarket

Polymarket is one of the leading decentralised prediction markets. It enables betting on events related to politics, culture, entertainment, financial assets, science, healthcare and more. The market is based on the Polygon blockchain. Polymarket trading uses USDC, a federally regulated stablecoin cryptocurrency backed by the US dollar. Traders can avail either market or limit orders to place their bets.?

Hedgehog

Hedgehog is built on the Solana network. It enables users to wager on the odds of events in the realms of sports, crypto, politics and finance. The platform offers not only classic markets but also pooled predictions with multiple choice options and staking services. Hedgehog also enables users to earn yield on their USDC funds while participating in markets. Trades are executed instantly via smart contracts, without a central intermediary.

Better Fan

The platform positions itself as a predict-to-earn game based on real sports events. Instead of money, users here bid special NFT fan cards up to a daily betting limit. If the bet is successful, users receive token rewards. If not, they can come back later and try betting again once their limit is restored. Users can also generate income by participating in the in-game tournaments and marketplace activities. The average cost of a fan card is 0.0800 ETH (about $190 at current price). The staked amounts and daily prediction limits are determined based on the quality and quantity of the users’ NFTs.?

SanR.app

The platform differs from traditional crypto prediction markets by the nature of the placed bids. Instead of predicting real-life event outcomes, SanR users allow you to hone your trading abilities and monetise them by forecasting future price movements of various coins and other market signals. In the future, analysis leaders will be able to participate in game battles and earn rewards on the mainnet as well.?

Feel

Feel is another crypto prediction platform that operates on a cross chain model, supporting Soland and EVM networks. It offers a gamified betting experience with different NFT cards enabling users to share 10% of the USDC earnings generated by the platform, recover lives for free market prediction, or participate in weekly lotteries. To earn on the platform, a user should correctly predict if the value of a token in USD will go higher or lower than the locked price. Currently, the platform offers bets on BTC, ETH, SOL, APT and BNB price changes within a short-time period (up to 3 minutes).?

What’s the Use of Prediction Markets?

Crypto prediction markets are quite similar to gambling websites. At the same time, there is no centralised entity that can manipulate the win/lose mechanisms which makes user prospects more transparent. They are not mainstream yet and the total value locked (TVL) in these platforms is estimated at less than $7M.?

The prediction markets are clearly speculative, but their betting outcomes may be more illustrative of a market or public sentiments than traditional polls since people here support their beliefs with some monetary value. Once they gain traction, such platforms could quite accurately aggregate information on particular topics of interest and reflect true collective market sentiment, more reliable than a single expert opinion.?

In this case, governments and organisations can use the insights from prediction markets to make informed decisions, whether in public policy, business strategy, or crisis management. Individuals and businesses can also use prediction markets to hedge against risks related to uncertain future events which are perceived highly likely.

Such platforms also enable traders to master their market expertise, analytic skills, research abilities, etc. and raise general awareness about the topics of public interest. By offering financial incentives, prediction markets encourage participants to seek out and analyse various trusted information sources instead of placing intuitive bets.?

As these markets provide valuable data on how groups aggregate and process information, they can contribute to the research in the fields of economics, psychology, and sociology. For instance, researchers can use prediction markets to study decision-making, behavioural economics, and market dynamics in a controlled, real-world environment.

Finally, let’s not forget that crypto prediction markets are novel examples of decentralised finance (DeFi) apps illustrating innovative economic models and financial instruments.

Controversies Linked to Crypto Prediction Markets

One of the biggest scandals connected to crypto prediction markets is the case of Augur. The platform hosted some unethical questions to place bets upon, including the possibility of death by assassination of certain political figures, or mass shootings and terrorist attacks with certain minimum numbers of casualties.?

That caused public disturbance in the community and raised discussions about betting morality and absence of legal consequences for those potentially incentivizing or normalising criminal behaviour and violence. Platforms hosting such “dark” markets can attract negative attention from regulators and law enforcement agencies, potentially leading to legal actions and shutdowns.

To avoid that, decentralised prediction markets should work out on some internal mechanism of blocking such unethical and potentially dangerous polls. Proactive measures will help crypto predictions take place in a safe and productive environment.?