Prediction markets should become hedging platforms, says Buterin

Ethereum co-founder Vitalik Buterin has stated that the future of prediction markets lies in their transition from speculative tools to sophisticated hedging platforms. While prediction markets like Polymarket have gained significant traction for their ability to aggregate information and forecast event outcomes, Buterin argues that their true social utility remains underutilized. He suggests that these platforms should serve as a form of insurance, allowing individuals and businesses to hedge against real-world risks. For instance, a user could take a position on an outcome that would negatively impact their livelihood, thereby offsetting potential financial losses. By evolving into infrastructure for risk management rather than just information discovery or gambling, Buterin believes prediction markets can provide greater stability and value to the global economy.

Source: Prediction markets should become hedging platforms, says Buterin