Market Forecast Industry Research Report: Polymarket Leads, Dual Champions Compete and Future Outlook

Part One: Definition and Mechanism of Prediction Markets

Prediction markets are platforms that aggregate information and forecast the outcomes of future events through market mechanisms. The core operation is that users can buy and sell corresponding "outcome shares" for various possible results of a specific future event (such as election results, economic data releases, sports event outcomes, etc.). The prices of these shares fluctuate between $0 and $1 (or other currency units), reflecting the collective judgment of market participants about the likelihood of that outcome occurring in real time. When the event result is finally determined, users holding the correct outcome shares will receive a return of $1, while those holding incorrect outcome shares will see their value drop to zero.

Essentially, prediction markets are an "information market" or "probability pricing" tool. Unlike traditional polls that rely on sample surveys, the prices in prediction markets are driven by "real money" trading behavior, which incentivizes participants to disclose their true judgments, allowing for a faster and more effective aggregation of wisdom and information dispersed among the crowd, leading to accurate predictions about the future. However, due to their similarity to gambling, prediction markets still face the challenge of being equated with "gambling" in mainstream perception, which is a major cognitive gap in their popularity "outside the circle."

Part Two: Core Platform Analysis: Polymarket

As a leader in decentralized prediction markets, Polymarket showed strong recovery and growth momentum in 2025.

Current Development and Key Data:
After a brief slump in mid-2025, Polymarket's activity significantly rebounded in October.

• User Growth: The number of monthly active traders reached a historic high of 477,850, a 93.7% increase from September.

• Surge in Trading Volume: October's trading volume rebounded to a new high of $3.02 billion.

• Market Creation: 38,270 new prediction markets were created, with substantial activity.

Growth Drivers:
Polymarket's growth is driven by multiple factors:

1. Capital Injection: The platform secured significant funding, including $205 million in early 2025 and a $2 billion investment from ICE, the parent company of the New York Stock Exchange, bringing its valuation to $9 billion and currently negotiating a new funding round at a valuation of $12-15 billion.

2. Token Expectations: The official confirmation of the launch of a native POLY token and an airdrop greatly attracted users to the platform to qualify for the airdrop, becoming a key catalyst for the surge in trading volume.

3. Product Features: The platform is viewed by the crypto community as an event-driven options trading tool, offering various profit strategies such as arbitrage and liquidity provision, attracting a large number of professional traders.

Core Strategy: Return to the U.S. Market
Polymarket is currently making every effort to return to the U.S. market by the end of November 2025. The platform exited the U.S. market in 2022 due to a lawsuit with the Commodity Futures Trading Commission (CFTC) and paid a $1.4 million fine. This return is seen as an important milestone, especially in the context of the CFTC softening its stance on prediction markets and leaning towards viewing them as financial innovations.

Part Three: Major Competitive Landscape: Polymarket vs. Kalshi

Despite Polymarket's rapid momentum, it faces fierce competition from the compliant platform Kalshi, with both dominating the current market landscape.

Market Performance Comparison:
In October 2025, the two platforms jointly drove industry trading volume to a historic high. Data shows that the regulated platform Kalshi surpassed Polymarket's $3.02 billion in trading volume for the month with $4.4 billion, solidifying its market leadership. The combined monthly trading volume of $7.4 billion exceeded Polymarket's total for the previous four years.

Strategic Path Differences:

• Polymarket: Adopts a decentralized, crypto-native model where users must use crypto wallets and stablecoins for trading. Its advantages lie in decentralized access and deep integration with the Web3 ecosystem, primarily attracting users from the crypto community.

• Kalshi: Follows a fully compliant, non-crypto path. It is regulated by the CFTC, uses an off-chain model, and significantly lowers the participation threshold for non-crypto users through integration with mainstream financial applications like Robinhood, reaching a broader audience.

Business Focus Differences:
Different strategic positioning has led to different business focuses. Kalshi holds an absolute dominance in sports event predictions, with sports-related trading volume reaching $1.1 billion in just one week from October 20 to 27. Polymarket's strengths are more evident in predicting political events (such as U.S. elections), macroeconomic data, and crypto-native events (such as token airdrops).

Part Four: Emerging Forces and Ecosystem

In addition to the rivalry between Polymarket and Kalshi, a number of unique emerging platforms have surfaced in the prediction market space, exploring different public chain ecosystems and niches, gradually forming a rich ecosystem.

High-Frequency Trading Platform: Limitless

Limitless is a high-frequency prediction market platform built on the Base network, rapidly rising in 2025 due to its ultra-short-term market design.

Core Data and Financing:

• In October 2025, it completed a $10 million seed round led by 1confirmation, with participation from well-known institutions like Coinbase Ventures, DCG, and Arrington Capital, bringing total funding to $18 million.

• Cumulative trading volume has surpassed $500 million, making it the largest prediction market platform in the Base ecosystem.

• Trading volume has grown rapidly: it increased 25 times from August to September, and by mid-October, it had already exceeded the total volume for September.

Product Features:
Limitless's core competitiveness lies in its high-frequency trading model. The platform focuses on ultra-short-term prediction markets of 30 minutes and 1 hour, concentrating on short-term price predictions for cryptocurrencies and stocks. Users can enter the market within a minute, enjoy instant settlement, and face no clearing risks or hidden fees. In the future, Limitless plans to further shorten time frames, launching 15-minute, 10-minute, and even 1-minute ultra-short-term markets, pushing prediction markets towards a high-frequency trading model.

The platform has issued a native token, LMTS, and is distributing tokens through the Kaito Launchpad. This model, which combines prediction markets with short-term price speculation, has attracted a large number of professional traders seeking quick trading opportunities.

BNB Chain Ecosystem Representative: Opinion

As the native prediction market platform of the BNB Chain ecosystem, Opinion is building dedicated prediction market infrastructure for this ecosystem.

Development Milestones:

• In October 2025, Opinion's mainnet exclusively launched on BNB Chain, becoming the first comprehensive prediction market platform in this ecosystem.

• It simultaneously launched the OPN trading points system and rebate mechanism to incentivize early user participation.

• Currently, trading permissions have been opened to some core community users, gradually expanding the user base through a whitelist invitation system.

Strategic Positioning:
Opinion positions itself as the "first macroeconomic and comprehensive prediction market of the BNB Chain ecosystem," focusing not only on cryptocurrency-related events but also attempting to cover broader prediction categories such as macroeconomic data and policy trends. The platform plans to open AI-driven permissionless market creation features after the mainnet launch, allowing anyone to create prediction markets and solving market settlement issues through decentralized oracles.

As a project supported by the Binance ecosystem, Opinion is expected to leverage the vast user base and liquidity advantages of the BNB Chain to establish a leading position in the prediction market within this ecosystem.

Infrastructure Layer Protocol: Azuro Protocol

Unlike the aforementioned end-user platforms, Azuro Protocol is positioned as the underlying infrastructure for decentralized prediction markets, providing "pipeline" services for the entire industry.

Protocol Architecture:
Azuro is a peer-to-pool prediction protocol built on EVM-compatible blockchains. It does not directly target users but provides core functions such as liquidity pools, odds calculation, real-time betting, and settlement for other front-end applications. Any developer can quickly build their own prediction market applications using Azuro's SDK, leveraging its shared liquidity and infrastructure.

Ecosystem Scale:

• Currently supports 28 front-end applications connecting to its protocol.

• Approximately 28,000 monthly active users.

• Cumulative trading volume exceeds $350 million.

• Mainly focuses on sports betting and gaming-related prediction markets.

Operating Model:
Azuro builds its ecosystem through liquidity providers (LPs) and data providers. LPs provide funding for prediction pools and profit from transaction fees; data providers are responsible for creating markets, setting odds, and resolving outcomes. This modular design makes Azuro the "Uniswap" of the prediction market field, avoiding the fragmentation of liquidity among independent applications by sharing liquidity, providing better odds and trading depth for connected front-end applications.

Key Infrastructure: UMA Protocol

The operation of prediction markets relies on the support of underlying infrastructure. The UMA protocol, as a decentralized oracle, provides outcome adjudication services for about 80% of Polymarket's subjective markets (such as political events, cultural phenomena, etc., which are difficult to verify programmatically). After a prediction event concludes, UMA token holders vote to adjudicate the outcome, ensuring that the market can settle fairly. Although these infrastructure projects do not directly face users, they are critical bottlenecks for the normal operation of the entire prediction market ecosystem, and their importance cannot be overlooked.

Supporting Tools Ecosystem

With the popularity of platforms like Polymarket, a tool ecosystem centered around prediction markets is rapidly forming. This includes:

• Real-time News Aggregation: Such as PolymarketIntel, PolymarketTrade, etc., providing real-time tracking of global events that impact the market.

• Data Analysis Platforms: Such as Polysights, hashdive, polydata, etc., offering AI analysis, smart money monitoring, whale tracking, and PnL rankings.

• Trading Tools: Such as PolyAlertHub, NevuaMarkets alert systems, and AI trading assistants like polybroapp.

• Mobile Clients: Such as polymtrade, native mobile applications that allow users to participate in predictions anytime and anywhere.

These third-party tools greatly enhance users' trading efficiency and decision-making quality, lowering participation barriers and becoming an indispensable part of the prediction market ecosystem.

Part Five: Overall Industry Trends and Challenges

As a rapidly growing emerging industry, prediction markets show great potential while also facing severe challenges.

Growth Trends:

• Trading Volume Reaches New Heights: In October 2025, the combined trading volume of just Polymarket and Kalshi reached $7.4 billion, indicating strong market demand.

• Institutional Capital Influx: Both Polymarket and Kalshi have received billions of dollars in investments from top institutions (such as ICE, Sequoia, a16z), rapidly increasing their valuations, marking institutional confidence in this sector.

Challenges Faced:

1. Regulatory Uncertainty: This is the biggest bottleneck for industry development. Prediction markets hover in the gray area between financial derivatives and gambling. While Kalshi has received CFTC approval, most platforms still operate in regulatory gray areas. CFTC officials have warned about the lack of sufficient visibility and regulatory safeguards for the market. Clarification of regulatory policies is key to attracting large-scale institutional funds.

2. Liquidity Constraints: Currently, the vast majority of trading volume and liquidity is highly concentrated on a few popular events (such as the U.S. elections), while many long-tail markets suffer from a lack of liquidity, rendering their prices meaningless and limiting the effectiveness of their information aggregation function.

3. Public Perception Bias: As mentioned earlier, simply equating prediction markets with "gambling" is the biggest narrative barrier to their mainstream acceptance. Although some mainstream media have begun to cite their data, it will still take time and endorsements from authoritative institutions to transform them into recognized "information tools."

4. Market Reliability: Platforms have also made errors in predicting certain events. For example, the two major platforms misjudged the results of the Dutch elections, raising doubts about their accuracy and reliability as prediction tools.

Part Six: Future Development Outlook

Looking ahead, for prediction markets to transition from "insider frenzy" to "mainstream application," breakthroughs are needed in several areas:

• Becoming a Data Source for Mainstream Media: The future of prediction markets lies in their "information value." When mainstream media commonly cite Polymarket or Kalshi prices as real-time probability indicators alongside or even superior to polls when reporting on elections and economic dynamics, their social credibility and authority will be greatly enhanced.

• Gradual Evolution of Regulatory Frameworks: Compliance is the key to unlocking institutional funds. As regulatory bodies like the CFTC delve deeper into this field, a clearer regulatory framework may emerge in the future, allowing prediction markets to serve broader financial and informational purposes under controlled risks.

• Continuous Innovation in Product Experience: Lowering user barriers is essential for expanding the user base. Whether through integration with traditional financial apps (like Kalshi with Robinhood) or optimizing mobile experiences and launching lightweight entry points (like Telegram Bots), these efforts will help attract a large number of users from outside the circle.

• Deep Integration with the Web3 Ecosystem: For crypto-native platforms, combining with other Web3 sectors such as DeFi, SocialFi, and RWA will create more diverse application scenarios, such as risk hedging tools, social prediction games, and derivatives trading of real-world assets.

In summary, prediction markets are at a crossroads of opportunities and challenges. Leading platforms like Polymarket and Kalshi have already demonstrated their enormous market potential, but the path to truly mainstream applications still requires continuous breakthroughs in regulation, technology, and market perception.