Prediction markets are having their breakout year. With Polymarket leading the charge, even amidst a challenging market, it's clear prediction markets are attracting crypto and non-crypto users alike. This rapid expansion prompts two key questions: who will build the next Polymarket, and how will they differentiate themselves?

This post is your essential guide to today’s prediction markets—let's dive in and explore the landscape.

Prediction markets are platforms where people trade on future events, from elections to sports outcomes. Prices in these markets represent the collective belief in the likelihood of each outcome. For example, you might buy shares predicting "Donald Trump will win the US election 2024." As more people buy into this outcome, its price rises, reflecting stronger belief; if people doubt it, the price drops. When the event occurs, those who bet correctly win their investment, while incorrect bets lose.

The power of prediction markets lies in their ability to aggregate information through trading. By putting money on the line, participants bring accountability to their predictions, creating a mechanism to sort credible information from noise. This mechanism, backed by research, often outperforms traditional forecasting methods, providing a crowd-sourced percentage likelihood of future outcomes.

We are in the society with fundamental misalignment of incentives in the social news cycle and that manifest news and posts that are skewed cuz they are all optimizing for engagement, getting people's attention. That's why Polymarket found the strong PMF and the demand for prediction markets have been growing.

Here’s a look at the prediction markets currently reshaping the field:

Standard prediction markets are as its name, platforms that provides prediction markets for various categories and topics. Many focus on specific chains, aiming to build their edge.

• Polymarket: The world's largest prediction market (polygon)

• Kalshi: First federally regulated, US-based prediction market

• Drift Protocol: Solana-based prediction market (with features like spot and perpetual trading)

• predict.fun: Blast-based yield-bearing prediction market

• Limitless: Base-based prediction market focusing on user-created markets and creator rewards

• Fore Protocol: Fore-based prediction market

• Hedgehog: Solana-based prediction market

• Brkt: Multi-chain prediction market (Base, Omni, Move-EVM, Camp, Morph)

• Raize Club: Starknet-based prediction market

Besides politics, sports are the largest prediction market topics now. While standard prediction markets already cover sports, dedicated sports platforms are gaining traction.

• BetHog: Sports focused prediction market founded by cofounder of FanDuel (the US' biggest sports betting platform)

• Scorefam: Blase-base sports/e-sports focused prediction markets with unique earning programs

• Bettensor: Bittensor-base sports focused prediction market

• Overtime: Thales-base sports focused prediction market

Building prediction markets on top of social graphs could be huge, and Swaye is pioneering this with a market built on Farcaster, complete with personalized feeds and prediction Frames.

• Swaye: Prediction market built on top of Farcaster/X social graph. It focuses on user generated market creations and creators market resolutions

Researches show that prediction markets is more accurate to make predictions than expert opinions. Futarchy explores using markets for making decisions.

• MetaDAO: decision-making system where markets, rather than votes, determine outcome

• Buttery: Prediction market for Uniswap Governance (currently) to make funding decisions

Most markets are about politics or sports, but predicting on people’s lives can be more engaging and fun to play.

• ManifoldMarkets: Prediction market where users can engage in competitive forecasting for free and earn

• Buzz Market: Prediction market for users' social life

Prediction markets need more reliable resolution mechanisms rather than external oracles. zkTLS offers a new way to address this by allowing anyone to resolve markets using web proof.

• tmr.news: First natural language prediction market for new york times headline (judged by AI & secured by zkTLS)

• fr.market: zkTLS-powered prediction market for new songs on Youtube

Games may be smaller than politics and sports in prediction markets, but people love watching competitions and speculating on outcomes, like in the League of Legends World Championship or the Blast Premier World Final.

• NightMarket: First fully onchian prediction market for onchian games (No oracle or human inputs in market resolution)

• Turf Gaming: Prediction market for sports/gaming focusing on permissionless-hosting

Twitch has a feature called Channel Points Predictions, where users can make predictions on streams using channel points, but these points don’t hold any real value. Naturally, users want the option to place real-money bets on streams, and some platforms are already exploring this space.

• Sweep: Prediction market for your favorite streamers' games

• peeple.live: Prediction market for streams

Most prediction markets center on offchain events, while some target onchain events and crypto prices.

• finance.vote: first Soul Bond Token prediction market (not just money but your prediction history shapes your influence)

• Rolla: Prediction market for crypto prices in quick durations

People have strong convictions about private startups, yet there's been no way to turn those predictions into profits—until now. Offmarket is leading this path.

Private startups are something that people have strong convictions on, yet we haven't been able to turn this convictions or prediction into profits. But offmarket is exploring this now.

• offmarket.fun: Prediction market for startup IPOs

Prediction markets can be way more casual. Most top traders on Polymarket don’t even use its main frontend to trade. We need a version that’s easy for anyone to join. Hookt.app and Fanzee are paving the way with mobile-native prediction markets.

• Hookt.app: Mobile swipe nativeprediction market

• Fanzee: The world's largest Telegram native prediction market

People love making predictions and betting on opinions, but AI can make real-time odds and predictions far more accurate. Some are even building systems for LLMs to participate in betting themselves.

• PredX.ai: AI powered prediction markets built on top of Aimelia Network

• Numerai: Stock prediction market where players build machine learning models to participate.

Last updated Nov 2024.

Below is a growing list of resources to keep up with Prediction Markets, their growth and the key people to watch. This list will be updated periodically, please share anything worth adding!

[onchain times] - A Chat With Domer, the #1 Trader on Polymarket

[messari] - YES or NO on Polymarket?

[nigel, cofounder of FanDuel] - thoughts on Polymarket

[1confirmation podcast] - Shayne Coplan's interview