Large institutions are beginning to recognize the value of blockchain technology, and blockchain-based prediction markets are emerging as a potential “killer app” that could change the game.
The power of prediction markets
Brian Trunzo from Polygon Labs shared an opinion on Cointelegraph, publishing some exciting insights about the prediction markets.
These prediction markets can offer accessible and relevant information about current events to everyone.
This development allows people to tap into the so-called wisdom of the crowd and influence our understanding of future events.
This sounds like something big, but as many experts have already suggested that the most important application of blockchain technology is likely the Bitcoin network itself.
Bitcoin serves as a permissionless and censorship-resistant global monetary system, while other uses of blockchain may seem often more like gambling and speculation than genuine investment. But prediction markets are here, and they’re popular, this is undeniable.
Rewarding accuracy is good incentive, but can we trust in predictions?
As Trunzo highlighted, in the book “Superforecasting,” the authors tell that some individuals have a natural gift for making accurate predictions.
With the rise of Web3, which wants to return value to users in the digital world, it’s now possible to reward these superforecasters with cryptocurrency incentives.
The integration of prediction markets with the wider DeFi ecosystem opens up new possibilities, such as using prediction market positions as collateral in these financial protocols.
For example, if you have a position in a prediction market like Polymarket or Azuro where the odds are in your favor, this position could be considered valuable collateral because it has a real chance of paying out.
It’s even possible to create more advanced applications. If you decide to lock in your position for three months, showing strong confidence in your prediction, you could earn rewards through a DeFi protocol for your commitment.
New technology, new possibilities, new business models
And this is likely just the beginning. Web3 prediction markets are poised to transform various areas, including gaming and social media, by creating new ways for users to engage and generate value across different platforms.
Imagine playing a game like Roblox or Minecraft and being able to set up a prediction market within that game, allowing players to guess what will happen next.
The opportunities are literally limitless.
Physical, traditional events aren’t exception
Cultural events are also ideal topics for prediction markets. Dedicated fanbases, like the Beyhive or Swifties, might enjoy betting on their favorite artist’s next big achievement.
Whether predicting music chart rankings, movie box office numbers, weather forecasts, or celebrity events, the possibilities are vast. The viability is unknown yet, but the possibilities are indeed here.
This model isn’t just for major cultural moments, Trunzo sharing with us that it can also include niche interests and local events.
The result is a wide range of prediction markets that reflect a wide range of human interests and experiences.
As a result, the expansion of information is likely to follow. There are already numerous decentralized prediction markets in operation, like Azuro, Polymarket, and Betfolio.
As these markets grow, they will likely reshape how we interact with information and entertainment, creating new opportunities for engagement and revenue.
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