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Vitalik Buterin
@vitalik.eth
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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PhiMarHal
@phimarhal
"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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Vitalik Buterin
@vitalik.eth
I do think that ultimately hedging will be the healthiest and most sustainable form of non-expert trading. There are lots of well-understood correlations between prices and world events, so lots of ways to get statistical variance reduction by doing counter trades on polymarket.
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