Prediction Market

A prediction market is a trading market where participants buy and sell contracts tied to the outcome of a future event. In crypto, prediction markets often price outcomes such as election results, asset price levels, policy decisions, exchange listings, sports results, or protocol events. The contract price is commonly interpreted as a market-implied probability, although liquidity, fees, and trader behavior can make it differ from a true forecast. Decentralized prediction platforms like Polymarket utilize automated market makers (AMMs) and collateralized stablecoins (such as USDC) on-chain to handle betting pools, settlement, and payouts. This structure eliminates intermediary counterparty risks, cuts transaction fees, and makes the market accessible globally to anyone with an internet connection and a web3 wallet.