This article was compiled and organized by BlockWeeks
Prediction markets have entered a new phase of mainstream visibility and capital formation. The success of Polymarket (record daily trading volume, market value reaching $9 billion) and Kalshi (Top 1 free finance app on the iOS App Store) proves the product-market fit that prediction markets have long pursued.
Prediction markets can be traced back to the Renaissance in the 1500s, when papal elections became the focus of betting. Its modern form was proposed by George Mason University economist Robin Hanson. Hanson's early research on information markets and futurism discussed how to use financial incentives to more effectively aggregate dispersed information, which laid the conceptual foundation for Kalshi and Polymarket to position themselves as probability price discovery tools.
The recent competitive landscape is broadening. A wave of new entrants is accelerating experimentation in product design and liquidity incentives. DeFi protocols are also exploring integrating prediction assets into their ecosystems. In theory, binary outcome tokens (yes/no tokens) can operate as composable financial instruments detached from their native prediction markets. For example, a "yes" token tied to an election outcome could be used as collateral for an Ethereum long position traded on a futures DEXA.
At the same time, U.S. regulatory clarity on event contracts provides room for regulated platforms to scale. Polymarket launched a new U.S.-regulated mobile app (currently only supporting sports betting). Since the 2024 presidential election, prediction markets have become a core topic in information discovery and on-chain financial discussions. More companies have launched their own prediction market products, and capital inflows continue to climb.
Polymarket's cumulative unique users have surpassed 1.6 million. The Kalshi mobile app ranks first in the iOS finance category.
Prediction markets have crossed the chasm into mainstream awareness and capital formation. Polymarket and Kalshi are the fastest-growing consumer financial products. Polymarket's cumulative users have surpassed 1.6 million. The Kalshi mobile app ranks first in the iOS finance category.
U.S. regulatory clarity has driven domestic expansion and overseas experimentation. Prediction markets are evolving from simple betting into financial primitives.
Leveraged prediction markets are an important development direction. The surge in perpetual futures trading volume shows strong demand for leveraged financial instruments, becoming an important driver of leveraged prediction markets. Users can take long and short positions with fixed margin and be liquidated according to the leverage ratio.
Gondor serves as a typical case. Its centralized clearing engine has matured and plans to open to external participants as the protocol matures and liquidity deepens. This design has structural risks: Gondor must immediately buy the opposite outcome when counterparty pricing fluctuates sharply. In markets that trade quickly or are close to settlement, the Polymarket order book is often thin and "broken," with extremely large bid-ask differences. If Gondor needs to use market orders in this environment, it faces the risk of locking in unfavorable prices, becoming a predictable liquidity absorber, and being front-run or sandwiched by more agile bots.
Avoiding third-party manipulation of underlying markets with insufficient liquidity is a clear motivation. These risks can be reduced by avoiding illiquid markets and closing positions early.
Gondor represents the development direction in this field. The team recently raised $2.5 million in a Pre-Seed round, with participants including Castle Island Ventures, Maven 11, and Prelude. Its very existence is a bet that prediction markets will become a standardized collateral asset class. For more professional traders, Gondor is committed to bringing prediction markets closer to macro derivatives rather than a gambling front end.
Space: Leveraged prediction markets
Leveraged prediction markets are one of the most important developments in this field. The surge in perpetual futures trading volume clearly demonstrates the demand for leveraged financial instruments, becoming one of the main products giving rise to leveraged prediction markets. Users can take long and short positions with fixed margin and be liquidated according to the leverage ratio.
