Buterin called prediction markets a filter against fakes and panic in the news - ForkLog: cryptocurrencies, AI, singularity, future

# Buterin called prediction markets a filter against fakes and panic in the news.

Co-founder of Ethereum Vitalik Buterin called prediction markets a more rational alternative to social networks, especially when discussing sensitive topics.

According to him, users of online platforms can irresponsibly incite panic. Similarly, the media often heighten the level of anxiety with sensational headlines and thereby contribute to disputes.

Prediction platforms address this issue through a mechanism of financial accountability: reckless or “stupid” bets lead to real losses.

Buterin believes that the risk of losing money drives participants to seek objective information rather than succumbing to emotions. As a result, such markets provide a more accurate assessment of probabilities and better reflect the real state of the world.

"Personally, I can recall several instances when, after reading a news headline, I felt anxious, then checked the prices on Polymarket and calmed down — people who understand this topic know what is happening, and the probability of any unusual event is only 4%," he wrote

The programmer added that he finds the use of prediction platforms “healthier” than traditional markets.

“The key reason is that prices are confined to a range from 0 to 1, so they are much less susceptible to the effects of reflexivity, the 'greater fool' theory, Pump & Dump schemes, etc.,” emphasized Ethereum co-founder

Threats

The CEO of the venture company Inversion Capital, Santiago Roel Santos, believes that the integration of prediction markets into financial applications is causing a user outflow and poses risks for the business in the long term.

He clarified that he supports the very concept of such platforms.

“The problem with casino-like products is not that users lose money. The problem is that they accelerate customer churn. The longer you stay inside the casino, the higher the probability of liquidation. And liquidation means that you are completely out of the game. A user who has left is worth zero,” said Santos

A number of fintech and crypto projects have already integrated prediction markets:

• Robinhood developed this direction throughout 2025;
• Gemini received regulatory approval to launch the platform;
• Coinbase announced plans to launch its own product

Santos is skeptical. He believes that companies are paying too much attention to a niche tool, which may ultimately negatively impact their main task — providing simple and understandable financial services.

“Products like Robinhood initially thrive because they are simpler and more accessible by nature than traditional services,” he explained

However, the needs of the audience are changing. The true strategic opportunity lies in “growing together with users, gradually capturing an increasing share of their overall financial life.”

“If your goal is a sustainable, rather than a short-term business, you must build it around long-term value, not short-term gain,” emphasized the head of Inversion Capital

Santos is confident that in the short term, the prediction markets “will look good in the reports,” but will later appear more fragile due to the inherent risks associated with them.

Recall that the market maker Keyrock stated that prediction platforms are becoming a leading indicator of key economic data.