Seeing some industry experts say that next year will be the first year of prediction markets in the crypto space. I’ve thought about it—can prediction markets really bring new assets to the crypto world? Will retail investors have a better chance to survive in them?

“Pricing based on facts” is a concept that has been envisioned countless times. Rather than saying prediction markets bring new assets to the crypto space, it’s more accurate to say that Web3 infrastructure (a globally censorship-resistant settlement layer, permissionless wallets, trusted stablecoin payments, etc.) can open up new possibilities for prediction markets.

Compared to the chips game of trading coins, prediction markets invest in possibilities—potential future facts. They are rational; retail investors don’t need to compete with whales over emotions, narratives, and chips. Instead, they compete over information and logic. For retail investors, an informational advantage can compensate for a smaller capital base, and losses in prediction markets are locked within the purchase cost, meaning they will never be liquidated or go to zero.

Although information games also mean more certain insider knowledge, retail investors may still be at the bottom of the information chain. But prediction markets provide a fairer opportunity for those who can focus and research deeply, enabling a win-win situation with whales in specific fields.

Where there is demand, there is a market. Prediction markets can link the crypto world with the real world, attracting new participants and creating new scenarios for crypto enthusiasts. Good things—compared to other sectors, whether prediction markets will issue tokens themselves seems less important. 🧐