Analysis of Development Trends and Emerging Projects in Prediction Markets

Prediction markets can be divided into two main camps: non-sports and sports. Non-sports markets have not been fully developed and mainly involve areas such as cryptocurrencies, political events, and cultural events. A well-known platform occupies a leading position in the non-sports market, primarily focusing on political events.

From the perspective of overall trading volume from the beginning of the year to now, if we consider the sports market, the trading volume of certain sports-related platforms can rival that of leading non-sports platforms.

Recently, several emerging projects have either launched or are under development. Most of these projects operate on the EVM or SOL chains, offering various unique features such as setting odds after placing bets. Hot topics of interest for new teams include permissionless market creation and AI-assisted market settlement.

Sports prediction markets have already established a solid user base in the Web2 environment. However, transferring these users to the cryptocurrency environment still faces challenges, mainly because users value brand and experience, whereas traditional sports betting platforms have huge marketing budgets. It is worth noting that the betting amount for a single Super Bowl far exceeds the total trading volume of the crypto prediction market to date.

One major development direction of prediction markets is the introduction of leveraged trading. Certain projects are developing features that allow perpetual trading on specific events, similar to the approach taken by a trading platform in 2020. Additionally, the "parlay betting market" is also an interesting development direction, allowing users to make combined predictions on multiple independent events.

In terms of market mechanisms, prediction markets can be divided into two categories: Web2.5 and Web3. Web2.5 uses cryptocurrency as a payment method, but the counterparty is the team behind the platform. Web3, on the other hand, has deeper on-chain interactions and usually employs AMM or order book models to match bets.

Meme coins play a special role in the prediction market and have become a prediction tool in themselves. Holders can benefit by selecting the right direction and focus. Some new protocols are attempting to combine the characteristics of prediction markets and meme coins, encouraging early users to not only bet on specific outcomes but also have incentives to promote the market.

The profit model of prediction market platforms mainly includes charging transaction fees, sharing trader bonuses, or accumulating counterpart earnings. Most protocols adopt the first or third method.

Looking ahead, artificial intelligence agents may become key players in this field, capable of quickly responding to news, managing orders, and executing betting strategies. It is expected that within the next few years, at least one protocol's trading volume will reach a level that competes with existing leading platforms.

To maintain market vitality, various platforms may need to adopt proactive user incentive measures. It is noteworthy that the trading volume of non-election-related markets on a leading platform is continuously increasing, which provides a positive signal for market vitality in the post-election period.