Prediction markets have existed in some form since the 16th century. They allow users to speculate on the outcome of any future event, as long as someone creates a market for it. Users can try to predict sports events, elections, legal cases, and anything with a clear or verifiable outcome. The core concept is very simple: if your prediction is correct, you win money; if your prediction is wrong, you lose the principal amount you invested. The operating mechanism behind it seems simple but is actually ingenious. The price of a "share" ranges between $0.00 and $1, and its price is linked to its percentage probability of winning (i.e., the "odds"). For example, if a share price for an election candidate is 63 cents, then according to that specific market, the candidate has a 63% chance of winning. If you want to predict the election outcome, you would buy shares in the candidate you think will win. When the election ends, the market settles, and the price of the winning candidate's shares becomes $1.00 each. The lower the probability of something happening, the cheaper it is to predict it, and vice versa. There are several different types of prediction markets: * **Binary markets:** Markets with only two options, where the outcome is either $1 or 0 (yes or no), such as "Will it rain next Monday?". * **Categorial markets:** Markets with multiple options, such as "Who will win the 2024 U.S. Presidential Election?". * **Scalar markets:** Markets that settle based on whether an outcome is above or below a specified boundary, such as "Will the U.S. population be higher than 333 million in the next census?". When participating in prediction markets, you can sell your shares at any time. There is no lock-up period; you don't need to wait for the event you speculated on to conclude. Continuing with the election example, if you believe a certain candidate will decisively defeat their opponent in an upcoming debate, you could buy that candidate's tokens, expecting their price to rise after the debate, and sell immediately after the debate concludes. The odds (and price per share) change in real-time because they are free markets, controlled solely by the supply and demand for each type of share. On-chain prediction markets typically use oracles to convert off-chain real-world data into information usable on the blockchain, to determine event outcomes and resolve disputes. For example, a decentralized prediction market could use an oracle to allow anyone to submit proof of an outcome, while also allowing others to challenge it. **Prediction Market Examples** * **Kalshi:** Founded in 2018. According to DeFiLlama data, as of February 2026, Kalshi was the largest prediction market by trading volume. After completing a $1 billion funding round in November 2025, the platform was valued at $11 billion. * **Polymarket:** Founded in 2020 by Shayne Coplan. In October 2025, Polymarket was valued at $9 billion following a $2 billion investment from Intercontinental Exchange (ICE). Unlike Kalshi, which operates as a centralized exchange, Polymarket settles markets on-chain. In February 2026, the company filed trademarks for POLY and $POLY, related to a potential token launch. * **Opinion:** An on-chain prediction market launched on BNB Chain in Q4 2025, with backing including Binance founder CZ's family office, YZi Labs. In February 2026, the platform raised $20 million in a Pre-A funding round. * **Myriad:** Launched in January 2025 by Decrypt's parent company, Dastan, aiming to provide a new model for the media ecosystem. By integrating with media outlets, Myriad envisions a dynamic engagement model designed to realign incentives. **How Does the Myriad Decentralized Prediction Market Work?** Myriad is an on-chain prediction market. There are two main models for ensuring liquidity in on-chain markets: order books and automated market makers (AMMs). Myriad's prediction market uses the AMM model; because AMMs do not rely on a counterparty to match orders, they can operate even when liquidity is low. Any user can provide liquidity to any market, unlike in centralized markets where only a centralized market maker is responsible for providing liquidity. Advocates of on-chain prediction markets emphasize that because liquidity can be drawn from anywhere, they often have higher liquidity than alternatives. Myriad uses incentives to attract liquidity. When users participate in Myriad's prediction markets, they receive shares in that market, which can be traded while the market is open. Myriad's constant function ensures that the quantity of shares in the liquidity pool always remains constant. When imbalances occur due to shares being added or removed, the price of the market outcome changes. **The Future of Prediction Markets** According to a February 2026 report by blockchain security firm CertiK, prediction markets are a rapidly growing industry, with trading volume surging from $15.8 billion in 2024 to $63.5 billion in 2025. Mainstream media increasingly views prediction markets as a legitimate means of forecasting outcomes. Outlets like The Wall Street Journal and Newsweek report on prediction market odds alongside traditional polling. Decentralized prediction markets claim to be more efficient than their centralized counterparts because they lack intermediaries, thus reducing fees. Their decentralized nature also allows for a higher degree of privacy, and many markets use cryptocurrency as a means of payment, increasing global accessibility. However, this also presents regulatory challenges. Crypto prediction markets face intense regulatory scrutiny; for example, Polymarket was fined $1.4 million by the U.S. CFTC in 2022. Despite facing regulatory and security challenges (such as the risk of wash trading), the industry appears underpinned by a generational shift. A January 2026 survey found that nearly one-third of Americans expect online speculation to become "a bigger and more important part of the culture," with younger consumers showing higher awareness of platforms like Polymarket and Kalshi.