Prediction markets change the moment they stop feeling like trading.

When markets move directly into the wallet, as they now do in @rainbowdotme Wallet, expressing a belief stops feeling like entering a financial product and starts feeling like acting on an opinion. That psychological shift is significantly important than liquidity ever has.

For most of their history, prediction markets demanded intent. You had to:

• leave your wallet
• open a dedicated app
• fund an account
• mentally switch into “market mode”

That sequence filtered participation before a single position was taken. Only users comfortable with friction, probabilities, and explicit financial framing made it through. Market design mattered, but interface friction mattered more. Embedding markets directly inside a wallet like Rainbow collapses that entire funnel into a single context.

What changed wasn’t incentives or pricing. It was proximity.

The data already reflects the imbalance this creates. Polymarket crossed $15B in cumulative volume in 2025, with high-salience events routinely clearing over $20M per market. Volume scaled quickly. Participation breadth did not. A relatively narrow cohort still expresses most of the belief.

That gap isn’t weak demand. It’s contextual friction.

Prediction markets are not primarily return instruments. They’re belief instruments. Participation depends less on expected value and more on whether someone feels comfortable attaching capital to an opinion in public. Any interface that makes that moment feel:

• heavy
• technical
• explicitly financial

suppresses participation by default. @rainbowdotme's wallet-native framing does the opposite. It removes the sense of “entering a market” and replaces it with something closer to adjusting a position you already own.

When users already trust a wallet to custody assets, the perceived risk of interacting collapses. The action stops feeling like trading and starts feeling like adjustment. That distinction quietly changes who shows up, and it’s why wallet placement matters more than market design tweaks at this stage.

We’ve seen this pattern before. NFTs didn’t scale because pricing improved. They scaled because ownership became intuitive inside wallets. Interfaces normalized behavior first. Markets followed. Rainbow is applying the same lesson to beliefs rather than collectibles.

Prediction markets are entering that phase now. Once opinions live next to balances in the wallet, expression becomes reflexive rather than deliberate. That expands markets horizontally, not vertically:

• more participants
• smaller average positions
• higher signal density
• less dominance by professional traders

From this POV; Rainbow Wallet isn’t adding prediction markets. It’s changing the environment where beliefs turn into actions.

Liquidity follows later.
Psychology always moves first.