Vitalik Buterin: “Lack of Yield Makes Prediction Market Unattractive!”

Jakarta, Pintu News – Ethereum founder Vitalik Buterin recently revealed structural flaws in the current design of the prediction market. According to him, these markets are less attractive to use as a hedging tool because they do not provide yield.

Check out the full information in this article!

Missing Yield in a Prediction Market

According to Crypto Times, Vitalik Buterin emphasized that the current prediction market does not offer yield, which makes it less attractive for hedging.

In a post on Farcaster, Buterin explained that participants would have to sacrifice the approximately 4% annualized return that stable dollar-denominated assets can earn if they choose to lock funds in the prediction market platform.

Buterin argues that many hedging use cases will emerge if these issues can be addressed and transaction volumes increase. Buterin’s comments come at a time when activity on Polymarket, a leading prediction market platform, is showing a decline.

Trading volume on Polymarket fell from $1.16 billion in June to $1.06 billion in July, although the number of active traders on the platform increased.

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Polymarkets and Market Dynamics

Despite the drop in volume, the number of active traders on Polymarket increased sharply, from 242,340 in June to 286,730 in July. According to a report by Brandon Kae and Ivan Wu, the average user traded a smaller amount in July, although the total number of platform users grew.

The report also shows that the number of new markets launched on Polymarket continues to increase each month, signaling a steady diversification from the platform’s initial politically-focused reputation.

Prediction markets allow people to bet on real-world outcomes, ranging from elections and sports to financial trends. These markets are often considered useful not only for speculation but also as a hedging tool.

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Prediction and Crypto Market Outlook

However, as expressed by Buterin, without a fix to the yield issue, many users will probably avoid prediction markets if they are looking for risk management rather than just gambling on yield.

Meanwhile, the overall crypto market remained stable, with Ethereum trading around $4,576, keeping its position as the world’s second largest cryptocurrency by market value.

The prediction market has the potential to grow significantly if it can integrate yield into its system, thus attracting more users interested in hedging as well as speculation.

Conclusion

The prediction market, which is currently less attractive to most due to the absence of yield, may see a major change if the suggestions from Vitalik Buterin are implemented. With the integration of yield, this market will not only be attractive to speculators but also to those who need an effective hedging tool.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities have high risk and volatility, always do your own research and use cold cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.

Reference

• Crypto Times. Vitalik Buterin: Lack of Yield Makes Prediction Markets Unattractive. Accessed on August 26, 2025
• Featured Image: CNBC