Ethereum co-founder Vitalik Buterin is concerned about the current direction of prediction markets, noticing a shift away from useful economic instruments and towards short-term bets.
He wrote on social media that many platforms are "overly close" to products focused on quick bets and speculative trading rather than practical applications.
This trend risks turning prediction markets into more than just gambling establishments, rather than systems that support real economic planning.
In this regard, Buterin has proposed turning prediction markets into hedging mechanisms that aim to protect consumers and organizations from price volatility.
He has described a model where blockchain-based prediction markets work in conjunction with large language models. This system would track price indices for categories of goods and services, such as food, housing, or transportation, by region.
A personal AI assistant will analyze spending patterns and create an individual portfolio of positions in the prediction market.
Proponents of prediction markets argue that this technology already has broader value than just speculation.
These platforms collect crowdsourced predictions about financial events and economic conditions, generating signals that can compete with survey data.