Vitalik Buterin on Farcaster

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https://ethereum.org

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Vitalik Buterin pfp

Vitalik Buterin

Debate on whether prediction markets are good or bad. One major point I will add is that right now the major markets mostly don't pay interest, which makes them very unappealing for hedging because to participate at all you sacrifice a guaranteed 4% APY on the dollar. I expect lots of hedging use cases to open up once that gets solved and volumes increase more. https://docs.google.com/document/d/1jc_46jk6UEdDY7Dc3hoX0gkTAyXAE07sjV93jPbrU40/mobilebasic

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One-liner summary of your whole doc: Prediction markets aren’t broken casinos — they’re early financial markets that will evolve natural hedgers, unlock huge untapped hedging demand, and become a net positive for society. Calling prediction markets bad is like calling the internet useless in 1995

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there was actually one PM with native yield on Blast network, but it seems they’ve shut down. discussed this yield + PM primitive a while back with @cjh and Limitless team, perhaps they might ship it

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Jacek.degen.eth 🎩

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J. Valeska 🦊🎩🫂 pfp

J. Valeska 🦊🎩🫂

I am not sure if I got the overall thing there but there is a thing that I want to mention anyway this is a double edge sword where the farmers may find a way to derisk if the sun does not cooperate but what if the inversors just skip the farmer and bet on prediction market ?? while small farmers work over their own investment, what about other potential bussiness that requires of investors that may find more interesting these artifical markets instead the real thing.. this may crash the whole economy

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Degengineering | $DGNGX pfp

Degengineering | $DGNGX

@degengineering.eth

Prediction markets seem interesting only if questions are not biased, specific, verifiable afterwards and gather enough honest, diverse and relevant players. Lots of potential applications but need time and some other evolutions in key fields like wider adoption of dID. Otherwise, we end up with Opinion markets that from time to time lead to misleading opinions being marked as accepted by the majority (@ponder, no feelings)

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RoboCopsGoneMad

@robocopsgonemad

Bad. There is no correlation between monetary conviction (which scales relative to personal capital) and accuracy. Even if you believe in "the wisdom of crowds" (and I don't) these markets are no better than coin based governance voting. Calling gambling a "prediction market" is weird NIH we should avoid.

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Jack Miller pfp

We switched the collateral from ETH to USDC but still too risky lol

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parseb pfp

good idea but aren't predictions markets just a very boring self-nerdsnipe?

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MIKHRALI pfp

The traditional hedging system has lost its relevance. We need tools for integration with DeFi. But one thing bothers me. Corporations have been gradually lured into the BTC and ETH investment system by being shown how profitable it is. But I expect anything, including treachery from major market players. If the markets crash, and this could be done artificially, many corporations simply won't survive it. Or is this the ultimate goal of the elite?

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Rodrigo NuñΞz

I love the colours in the doc 🙃

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Degengineering | $DGNGX pfp

Degengineering | $DGNGX

@degengineering.eth

Prediction markets seem interesting only if questions are not biased, specific, verifiable afterwards and gather enough honest, diverse and relevant players. Lots of potential applications but need time and some other evolutions in key fields like wider adoption of dID. Otherwise, we end up with Opinion markets that from time to time lead to misleading opinions being marked as accepted by the majority (@ponder, no feelings)

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@gandhionchain.eth

hey @bracky, @vitalik.eth thinks prediction markets are bad - what do you think of it, as the emerging supreme digital sportsbook?

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Interesting take. Makes me wonder how many people viewing prediction markets actually think about the incentives they generate, beyond just the profits.

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interesting to me that they exist and curious to explore what I can build with them, expectations of good or bad on them at this stage seem misguided, likely bigger fish to fry in the morality department

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Builder Meek🎚

The prediction market mostly shows sentiment, but reactions are mostly based on reality. Human brains are wired to sense into the future if available, so I will say, The prediction market is just a prediction

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PhiMarHal pfp

"Prediction markets only work when there is a steady supply of dumb money." Maybe I'm myopic, but this is what I think too, and I'm not feeling the growth will solve this counterpoint. *Why* would growth solve this? Certainly we can have more dumb money, but their aggregate win:loss ratio would get only worse. All other markets reliant on dumb money also have mechanisms to let dumb money feel like they have a chance. The expertise nature of PMs make this hard. The closest we get here are political markets (as everyone feels like they're an expert in politics).

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@shawmakesmagic

What is interesting is that in the long run prediction markets seem to become a bond market All Polymarket has to do is fund the 3% on "will Jesus return in 2025?" and they've created a consistent, low-yield bond market for themselves IMO prediction markets are to derivatives what memecoins are to gambling

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Nicki Sanders pfp

Exactly. Right now you’re paying an opportunity cost just to show up. Solve the yield problem and suddenly prediction markets look less like casinos and more like risk-management infrastructure.

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KingFi👑 pfp

Totally agree with this. That will draw more attraction to hedging

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