Why Vitalik Sees Prediction Markets as Critical Infrastructure for Information Validation

Ethereum’s creator has recently voiced strong support for prediction markets, positioning them as essential mechanisms for discovering and validating truth across complex domains. This stance reflects growing recognition within the crypto community about the structural importance of these platforms.

The market dynamics tell a compelling story. Polymarket, a decentralized prediction platform that has partnered with major players like Intercontinental Exchange (ICE) and X, achieved daily trading volumes reaching $179 million. These numbers underscore the genuine demand for crypto-native prediction infrastructure.

However, a regulatory divide has created a stark competitive gap. While Polymarket faces restrictions in the U.S. market, Kalshi has capitalized on this gap, currently commanding 73% of domestic market share. This regulatory arbitrage has effectively frozen Polymarket out of its largest potential market, leaving significant growth potential untapped.

The outlook for Polymarket’s U.S. return appears increasingly concrete. The platform is actively addressing regulatory concerns that led to its initial restrictions. Two catalysts could accelerate its market recovery: the introduction of its native POLY token and a planned migration to Layer-2 infrastructure. These upgrades promise improved scalability, lower costs, and potentially more favorable regulatory optics for re-entry.

What makes this narrative compelling is Vitalik’s broader point about prediction markets as truth-seeking tools. As these platforms mature and secure regulatory clarity, they’re poised to become the market’s native information layer—exactly the kind of infrastructure the ecosystem needs as it scales.