Prediction Market 2025: Compliance Breakthrough, Capital Influx and Socialization Trend

1. Introduction to the Track Background

Since the 2024 U.S. elections propelled Polymarket to popularity, prediction markets have become a frontier track of joint interest between Web3 and traditional financial institutions. During the election period, on-chain markets demonstrated faster and more accurate predictive capabilities than traditional polls, allowing the outside world to truly feel the power of "price as probability" for the first time. In 2025, this trend further evolves into a comprehensive upgrade at both the capital and product levels, with nearly ten related projects completing financing from June to now, with investors including top institutions like Coinbase, Paradigm, and Delphi. Behind the capital’s bets lies the unique structural advantages of blockchain prediction markets: an open access mechanism significantly lowers participation barriers, all transaction records are transparent and immutable, and users can place real monetary bets without relying on intermediaries, making the final price a quantifiable expression of collective wisdom.

At the same time, the development of prediction markets is also showing diversified paths. On the compliance front, Kalshi obtained compliance licenses for all 50 states in the U.S. under the approval and regulation of the CFTC, while Polymarket acquired the Florida-based derivatives exchange QCX to obtain a regulated entity for offering contract trading within the U.S. In terms of product innovation, projects like Myriad and Flipr have embedded prediction scenarios into social media, allowing users to bet directly through social media platforms like X, thereby socializing prediction betting. Limitless reshapes the liquidity experience based on the high-performance CLOB model of the Base chain, while Drift attempts to combine predictions with highly leveraged derivatives, expanding more trading dimensions. Overall, compared to 2024, the prediction market track in 2025 has seen significant positive changes in compliance, model innovation, and use cases.

2. Mechanism Characteristics of Prediction Market Projects

The main mechanism characteristics of prediction market projects include transaction matching, contract forms, liquidity, oracle, and other features. These mechanisms are key conditions for the long-term sustainable operation of prediction markets. They can generally be divided into the following categories:

1. Trading Matching Model

In prediction markets, the trading matching mechanism directly determines the market's activity level and price performance. The two mainstream models currently include: order book model and automated market maker (AMM) model. A typical representative of the order book model is Polymarket and Kalshi. This model allows market makers or traders to actively place buy and sell orders, which can speed up transaction execution and reduce slippage when market liquidity is sufficient. However, when liquidity is weak, issues such as widening price gaps and difficulty in execution can arise. Next is the automated market maker model. The advantage of AMM lies in its ability to automatically adjust the prices of trading pairs through algorithms, enabling transactions to be completed without a counterparty, thereby maintaining continuous trading capacity in the market. However, during extreme liquidity conditions, slippage significantly increases, and the mechanism is sensitive to parameter settings, which can easily trigger safety risks.

2. Contract Design and Problem Definition

In prediction markets, the clarity of contract design and the verifiability of the determination method are crucial. The mainstream contract types include:

• Binary Contracts: The most common form, the contract pays a fixed amount (e.g., $1) when an event occurs, and nothing if it does not occur. They have high liquidity, are easy to price, and are widely used in scenarios with clear outcomes, such as elections and sports.
• Categorical Contracts: Suitable for scenarios where there are multiple mutually exclusive outcomes, traders can choose specific outcomes to bet on, such as predicting "who will be the next CEO."
• Scalar/Index Contracts: Used to predict numerical changes, such as a company's quarterly revenue, where the payment amount of the contract varies with the result value. The price is multiplied by a factor to map the predicted target.

3. Oracle

The reliable determination of event outcomes is a core aspect that affects the credibility of prediction markets. Traditional platforms rely on operators or third-party arbitration, while crypto-native prediction markets introduce oracle mechanisms to ensure that on-chain contracts can obtain reliable real-world data. For example, Polymarket uses the UMA Protocol to write real event outcomes on-chain, enabling automatic settlement. A sound determination system can not only reduce the risks of disputes and manipulation but also build trust for users, thereby enhancing market activity.

4. Other Key Factors

Outside of the mechanisms, the user experience of prediction markets is influenced by various factors, including: choice of underlying blockchain and transaction Gas costs, platform user interface design, and fee structure (market creation fees, transaction fees, etc.). These elements together form the comprehensive competitiveness of the platform, which plays a decisive role in user retention and market expansion.

3. Popular Project Analysis

Polymarket

In the 2024 U.S. election and various global focal events, Polymarket has demonstrated a faster and more accurate predictive advantage compared to traditional polls, gradually becoming an important source of information for media organizations and investors, and establishing its leading position in the prediction market. The platform relies on the Polygon Layer 2 network, utilizing a low-cost and high-throughput trading environment to support market operations, primarily employing a binary outcome market mechanism: users place bets on the future direction of political, economic, sports, and social hot topics by buying "YES/NO" shares.

According to data from Polymarket Analytics, Polymarket's cumulative trading volume has surpassed $898 million, firmly securing its position as the global leader. However, in terms of the number of users and open contracts, Polymarket has been overtaken by Kalshi. The main reason for this situation lies in early compliance restrictions, which once led to a ban on direct usage of the platform by U.S. users. However, this disadvantage was reversed in 2025 — the U.S. Department of Justice officially ended its investigation in July, allowing Polymarket to smoothly return to the U.S. market. Polymarket acquired the CFTC-licensed derivatives exchange and clearinghouse QCEX for $112 million, further addressing compliance concerns. Meanwhile, in June, Polymarket announced a partnership with Musk's social platform X to combine its prediction market data with Grok launched by xAI, offering a real-time prediction information stream service, further enhancing its influence in public opinion dissemination and market data applications.

Currently, Polymarket's biggest competitor is Kalshi. The latter is gradually replacing Polymarket's leading position, leveraging the dual advantages of high compliance and endorsements from Trump's son, and has made significant breakthroughs in user growth and activity. In contrast, Polymarket's core advantage lies in its operation on-chain, which inherently provides the potential expectation of issuing tokens, offering additional incentive mechanisms for users and early participants. At the same time, Polymarket has also achieved key breakthroughs in compliance, eliminating the main obstacles that previously restricted its expansion in the U.S. market. With the dual support of blockchain and compliance pathways, Polymarket's future development still holds considerable imaginative potential.

Kalshi

Kalshi is the first prediction market platform to receive full regulation from the U.S. Commodity Futures Trading Commission (CFTC), holding compliant licenses across all 50 states. This legal status not only allows it to quickly accumulate trust among traditional investors and institutions but also opens up a broader user base. Unlike most on-chain prediction markets, Kalshi's model allows users to directly trade the outcomes of real-world events, rather than indirectly betting on the prices of related assets. Its contract design primarily uses a "yes/no" binary format, covering a wide range of areas, including macroeconomic data (such as inflation rates and unemployment rates), political elections, sports events, and even cryptocurrency price trends.

Kalshi's core competitive advantages are mainly reflected in three areas: compliance, capital support, and political resources. On the capital side, the platform has received support from top investment institutions such as Sequoia Capital, Paradigm, and Y Combinator, raising over $260 million in total financing, with the latest round valuing it at $2 billion, ranking among the top in similar projects. In terms of political resources, former CFTC chairman candidate Brian Quintenz has served as a member of Kalshi's board, while Donald Trump Jr. has also participated as an advisor, providing additional support for the platform's public influence and compliance expansion. With compliance dividends and strong political capital, Kalshi has gradually established a competitive advantage that surpasses Polymarket.

Other Popular Projects

Limitless

Limitless is an emerging prediction market platform based on the Base chain, utilizing a CLOB (Central Limit Order Book) system. It supports limit orders, market orders, and multi-outcome contracts, allowing users to trade as flexibly as on a CEX while retaining on-chain transparency and verifiability. The platform achieves instant settlement through the Pyth Network oracle, covering a variety of markets including Bitcoin, Ethereum, stocks, and macroeconomics, with all transactions settled in USDC.

As of now, Limitless has a cumulative trading volume of approximately $299 million, with V1 contributing around $291 million and V2 about $8.23 million, totaling approximately $107,000 in fees. In July 2025, Limitless completed a strategic financing round of $4 million, with participation from institutions such as Coinbase Ventures and 1confirmation, making it the largest prediction market on the Base chain.

Myriad Market

Myriad Markets is a decentralized prediction market protocol launched by media company DASTAN Inc., dedicated to deeply integrating on-chain prediction trading with digital content. The platform directly embeds the prediction entry into news, social media, and video content through a Chrome extension, achieving "content as a market," allowing users to place bets while reading or watching. Myriad uses the AMM joint curve model to support market liquidity, supports binary, categorical, and scalar contracts, and settles through on-chain oracles.

As of now, the platform has processed a total of 5.63 million transactions, approximately 388,000 active USDC wallets, with a total transaction volume of about 11.26 million USD. Myriad's core competitiveness lies in the native content embedding and on-chain transparent settlement, providing a new monetization model for the media ecosystem, while attracting highly engaged users to participate in multi-themed predictions related to politics, sports, cryptocurrency, and macroeconomics.

flipr

Flipr is a front-end trading tool that deeply integrates prediction markets into the social platform X, with the core entry being the trading robot Fliprbot. Users do not need to jump to a standalone website; they can simply tag @fliprbot in a tweet or send a private message with natural language commands to place bets on events such as cryptocurrency prices, sports events, and macroeconomic trends. The platform integrates leveraged trading, take-profit and stop-loss functions, and volatility protection, while also supporting group chats and community embedding to make prediction activities naturally blend into social interactions.

Currently, the price of $FLIPR is approximately $0.017, with a total market capitalization of around $17.21 million. Flipr's differentiated advantage lies in the fact that it does not compete directly with Polymarket or Kalshi in terms of liquidity or compliance, but rather acts as a social front-end overlaying existing markets, transforming prediction markets from professional tools into visible and interactive social content, thereby significantly lowering the entry barrier for new users and enhancing market dissemination.

4. Future Development

The development direction of future prediction markets is likely to present a pattern of "dual-track progress": on one hand, projects will continue to lower participation barriers and expand the user base through social platforms, such as Flipr embedding trading into conversational scenarios via social media; on the other hand, the processes of compliance and specialization are also accelerating, with platforms like Kalshi attracting traditional capital into the market through regulatory licenses. This "dual-track model" means that prediction markets may serve as tools for public entertainment and public opinion in daily life, while also potentially becoming financial infrastructures for professional institutions to conduct risk management and market pricing.

However, based on the current situation, the prediction market still faces three major pain points: the first is insufficient liquidity, which limits the depth of the market, and excessive price differences can affect user trading experiences; the second is compliance, as prediction markets essentially combine characteristics of gambling and financial derivatives, often facing gray areas or even direct regulatory restrictions in different jurisdictions. How to build an operational framework compatible with the existing legal system while maintaining decentralization and censorship resistance is the key challenge for attracting institutional capital and mainstream users in this sector; the third is the issue of capital efficiency, lacking yield scenarios that can compete with real financial instruments, making it difficult to attract long-term capital accumulation. If these core challenges cannot be overcome, the growth of prediction markets will rely more on speculative drives and short-term trends; however, once capital efficiency and institutional frameworks can be improved, prediction markets are expected to truly scale up and become key infrastructure connecting information aggregation, risk management, and financial innovation.

Risk Warning:

The above information is for reference only and should not be regarded as advice to purchase, sell, or hold any financial assets. All information is provided in good faith. However, we make no express or implied representations or warranties regarding the accuracy, adequacy, effectiveness, reliability, availability, or completeness of such information.

All cryptocurrency investments (including financial management) are essentially highly speculative and carry significant risk of loss. Past performance, hypothetical results, or simulated data do not necessarily represent future results. The value of digital currencies may rise or fall, and buying, holding, or trading digital currencies may involve significant risks. Before engaging in trading or holding digital currencies, you should carefully assess whether such investments are suitable based on your own investment goals, financial situation, and risk tolerance. BitMart does not provide any investment, legal, or tax advice.

1. Introduction to the Track Background

Since the surge of Polymarket driven by the 2024 U.S. elections, prediction markets have become a frontier track of common interest for both Web3 and traditional financial institutions. During the elections, on-chain markets demonstrated faster and more accurate predictive capabilities than traditional polls, allowing the outside world to truly feel the power of "price as probability" for the first time. In 2025, this trend further evolved into a comprehensive upgrade at the capital and product levels, with nearly ten related projects completing financing from June to now, with investors including top institutions such as Coinbase, Paradigm, and Delphi. Behind the capital bets is the unique structural advantage of blockchain prediction markets: the open access mechanism significantly lowers participation thresholds, all transaction records are transparent and immutable, and users can place bets with real money without relying on intermediaries, making the final price a quantitative expression of collective intelligence.

At the same time, the development of prediction markets is showing diverse paths. On the compliance side, Kalshi has obtained compliance licenses for all 50 states in the U.S. under the approval and regulation of the CFTC, while Polymarket acquired the Florida-based derivatives exchange QCX to establish a regulated entity for contract trading within the U.S. In terms of product innovation, projects like Myriad and Flipr are embedding prediction scenarios into social media, allowing users to place bets directly through social media platforms like X, thus socializing prediction betting. Limitless is reshaping the liquidity experience based on the high-performance CLOB model of the Base chain, while Drift attempts to combine predictions with high-leverage derivatives to expand more trading dimensions. Overall, compared to 2024, the prediction market track in 2025 has seen significant positive changes in compliance, model innovation, and use cases.

2. Mechanism Characteristics of Prediction Market Projects

The main mechanisms of prediction market projects include trading matching, contract forms, liquidity, oracle, and other features. These mechanisms are key conditions for the long-term sustainable operation of prediction markets. They can be roughly divided into the following categories:

1. Trading Matching Model

In prediction markets, the trading matching mechanism directly determines the market's activity level and price performance. Currently, the two mainstream models include: order book model and automated market maker model, with Polymarket and Kalshi being typical representatives of the order book model. This model involves market makers or traders actively placing orders to buy and sell, which can accelerate transaction speed and reduce slippage when market liquidity is sufficient. However, during periods of low liquidity, issues such as widening price spreads and difficulty in executing trades may arise. Next is the automated market maker model. The advantage of AMM is that it automatically adjusts the prices of trading pairs through algorithms, enabling trades to be completed without a counterparty, thus maintaining continuous trading capacity in the market. However, during extreme liquidity conditions, slippage significantly increases, and it is sensitive to the parameters set in the mechanism, which can easily trigger safety risks.

2. Contract Design and Problem Definition

In prediction markets, the clarity of contract design and the verifiability of the adjudication method are crucial. The mainstream contract types include:

• Binary Contracts: The most common form, the contract pays a fixed amount (e.g., $1) when the event occurs, and nothing if it does not occur. They have high liquidity, are easy to price, and are widely used in scenarios with clear outcomes, such as elections and sports.
• Categorical Contracts: Suitable for scenarios with multiple mutually exclusive outcomes, where traders can choose specific outcomes to bet on, such as predicting "who will be the next CEO".
• Scalar/Index Contracts: Used to predict numerical changes, such as a company's quarterly revenue. The payment amount of the contract varies with the result value, and the price is multiplied by a multiplier to map the predicted target.

3. Oracle

The credible determination of event outcomes is a core aspect that affects the credibility of prediction markets. Traditional platforms rely on operators or third-party arbitration, while crypto-native prediction markets introduce oracle mechanisms to ensure on-chain contracts can obtain reliable real-world data. For example, Polymarket uses the UMA Protocol to write the results of real-world events on-chain, enabling automatic settlement. A sound determination system not only reduces the risk of disputes and manipulation but also builds trust among users, thereby enhancing market activity.

4. Other Key Factors

Outside of the mechanism, the user experience of prediction markets is influenced by various factors, including: the choice of underlying blockchain and transaction gas costs, the platform's user interface design, and the fee structure (market creation fees, transaction fees, etc.). These aspects together constitute the platform's overall competitiveness, which plays a decisive role in user retention and market expansion.

3. Popular Project Analysis

Polymarket

In the 2024 U.S. election and several global focal events, Polymarket has demonstrated a faster and more accurate predictive advantage compared to traditional polls, gradually becoming an important source of information for media organizations and investors, and establishing its leading position in the prediction market. The platform relies on the Polygon Layer 2 network, utilizing a low-cost and high-throughput trading environment to support market operations, primarily adopting a binary outcome market mechanism: users bet on the future trends of political, economic, sports, and social hotspot events by buying "YES/NO" shares.

According to data from Polymarket Analytics, Polymarket's cumulative trading volume has surpassed $898 million, firmly maintaining its position as the world's number one. However, in terms of user numbers and open contracts, Polymarket has been surpassed by Kalshi. The main reason for this situation is the early compliance restrictions, which once led to a ban on direct use of the platform by U.S. users. However, this disadvantage was reversed in 2025 — the U.S. Department of Justice officially ended its investigation in July, allowing it to successfully return to the U.S. market. Polymarket acquired the CFTC-licensed derivatives exchange and clearinghouse QCEX for $112 million, further addressing compliance concerns. Meanwhile, Polymarket also announced in June a collaboration with Musk's social platform X, combining its prediction market data with Grok launched by xAI to offer real-time prediction information flow services, further enhancing its influence in public opinion dissemination and market data application.

Currently, Polymarket's biggest competitor is Kalshi. The latter is gradually replacing Polymarket's leading position, relying on the dual advantages of high compliance and backing from Trump's son, and has made significant breakthroughs in user growth and activity. In contrast, Polymarket's core advantage lies in its operation on-chain, which inherently provides the potential expectation for token issuance, offering additional incentives for users and early participants. At the same time, Polymarket has also achieved key breakthroughs in compliance, eliminating the main obstacles that previously restricted its expansion in the US market. With the dual support of blockchain and compliance pathways, Polymarket's future development still has considerable imaginative space.

Kalshi

Kalshi is the first prediction market platform to receive full regulation from the Commodity Futures Trading Commission (CFTC) in the United States, with compliant licenses covering all 50 states. This legal status not only allows it to quickly accumulate trust among traditional investors and institutions, but also opens up a broader user base. Unlike most on-chain prediction markets, Kalshi's model enables users to directly trade the outcomes of real-world events, rather than indirectly betting on the prices of related assets. Its contract design primarily uses a binary "yes/no" format, covering a wide range of areas, including macroeconomic data (such as inflation rates, unemployment rates), political elections, sports events, and even cryptocurrency price trends.

Kalshi's core competitive advantages are mainly reflected in three aspects: compliance, capital support, and political resources. On the capital side, the platform has received support from top investment institutions such as Sequoia Capital, Paradigm, and Y Combinator, with total financing exceeding $260 million, and the latest round of valuation has reached $2 billion, ranking among the top in similar projects. In terms of political resources, former CFTC chairman candidate Brian Quintenz has served as a board member of Kalshi, and Donald Trump Jr. has also participated as an advisor, providing additional support for the platform's public influence and compliance expansion. With compliance benefits and strong political capital, Kalshi has gradually established a competitive advantage that surpasses Polymarket.

Other Popular Projects

Limitless

Limitless is an emerging prediction market platform based on the Base chain, utilizing a CLOB (Central Limit Order Book) system. It supports limit orders, market orders, and multi-result contracts, allowing users to trade flexibly like on a CEX while retaining on-chain transparency and verifiability. The platform achieves instant settlement through the Pyth Network oracle, covering various markets such as Bitcoin, Ethereum, stocks, and macroeconomics, with all transactions settled in USDC.

As of now, Limitless has a total trading volume of approximately 299 million USD, with V1 contributing about 291 million USD and V2 around 8.23 million USD, totaling approximately 107,000 USD in fees. In July 2025, Limitless completed a strategic financing of 4 million USD, with participation from institutions such as Coinbase Ventures and 1confirmation, and it is currently the largest prediction market on the Base chain.

Myriad Market

Myriad Markets is a decentralized prediction market protocol launched by the media company DASTAN Inc., dedicated to deeply integrating on-chain prediction trading with digital content. The platform directly embeds the prediction entry into news, social media, and video content through a Chrome extension, achieving "content as market", allowing users to place bets while reading or watching. Myriad adopts the AMM joint curve model to support market liquidity, supporting binary, categorical, and scalar contracts, and settles through on-chain oracles.

As of now, the platform has processed a total of 5.63 million transactions, with approximately 388,000 active USDC wallets, and a total transaction volume of about 11.26 million dollars. Myriad's core competitiveness lies in native content embedding and on-chain transparent settlement, providing a new monetization model for the media ecosystem while attracting highly engaged users to participate in predictions on various themes including politics, sports, cryptocurrency, and macroeconomics.

flipr

Flipr is a front-end trading tool that deeply integrates prediction markets into the social platform X, with the core entry point being the trading robot Fliprbot. Users do not need to navigate to a separate website; they can simply tag @fliprbot in a tweet or send a private message with natural language commands to place bets on events such as cryptocurrency prices, sports events, and macroeconomic factors. The platform integrates leveraged trading, take-profit and stop-loss features, and volatility protection, while also supporting group chats and community embedding to make prediction activities naturally blend into social interactions.

Currently, the price of $FLIPR is about 0.017 USD, with a total market value of approximately 17.21 million USD. Flipr's differentiated advantage lies in the fact that it does not compete directly with Polymarket or Kalshi in terms of liquidity or compliance, but serves as a social front that overlays existing markets, transforming prediction markets from professional tools into visible and interactive social content, thereby significantly lowering the participation barrier for new users and enhancing market dissemination.

4. Future Development

The future development direction of prediction markets is likely to present a "dual-track progress" pattern: on one hand, projects will continue to reduce participation thresholds and expand the user base through social platforms, such as Flipr embedding trading into conversational scenarios via social platforms; on the other hand, the process of compliance and specialization is also accelerating, with platforms like Kalshi attracting traditional capital into the market through regulatory licenses. This "dual-track model" means that prediction markets may serve as tools for public entertainment and public opinion in daily life, while also potentially becoming financial infrastructure for professional institutions to conduct risk management and market pricing.

However, from the current situation, the prediction market still faces three major pain points: first, insufficient liquidity, which limits the depth of the market, and excessive price differences can affect users' trading experiences; second, compliance, as prediction markets essentially combine characteristics of gambling and financial derivatives, they often face gray areas or even direct regulatory restrictions in different jurisdictions. How to build an operational framework that is compatible with the existing legal system while maintaining decentralization and censorship resistance is a key challenge for attracting institutional funds and mainstream users in this sector; third, the issue of capital efficiency, lacking competitive return scenarios compared to real financial instruments, makes it difficult to attract long-term capital accumulation. If these core challenges cannot be overcome, the growth of prediction markets will rely more on speculation-driven and short-term trends; however, once capital efficiency and institutional frameworks improve, prediction markets are expected to truly scale up, becoming a key infrastructure connecting information aggregation, risk management, and financial innovation.

Risk Warning:

The above information is for reference only and should not be construed as advice for the purchase, sale, or holding of any financial assets. All information is provided in good faith. However, we make no representations or warranties of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of such information.

All cryptocurrency investments (including financial management) are inherently highly speculative and involve significant risk of loss. Past performance, hypothetical results, or simulated data do not necessarily represent future results. The value of digital currencies may increase or decrease, and buying, holding, or trading digital currencies may involve significant risks. Before engaging in trading or holding digital currencies, you should carefully assess whether it is suitable for you to participate in such investments based on your own investment goals, financial situation, and risk tolerance. BitMart does not provide any investment, legal, or tax advice.