KuCoin Ventures Report Decodes Prediction Markets Infrastructure Role

• An increase in user engagement is shown by the fact that Polymarket hosted over 35,500 new markets in October alone, its greatest monthly total to date.
• The report contends that the infrastructure supporting the whole ecosystem is where the true value is found.

A new strategic report from KuCoin Ventures looks at the prediction markets’ explosive expansion, which already generates over $2 billion in weekly trading volume. Although platforms like Polymarket and Kalshi have received the majority of public attention, the report contends that the infrastructure supporting the whole ecosystem is where the true value is found.

A thorough framework for comprehending how prediction markets are developing from speculative tools into a new tier of financial infrastructure is provided in the report. Current trading activity is dominated by platforms like Kalshi, now valued at $5 billion, and Polymarket, which recently got a $2 billion investment from Intercontinental Exchange (ICE) at a $8 billion valuation. However, their success has also brought to light three fundamental issues: regulatory uncertainty, dispersed liquidity, and oracle conflicts.

An increase in user engagement is shown by the fact that Polymarket hosted over 35,500 new markets in October alone, its greatest monthly total to date. However, instances such as the “Zelenskyy Suit” and the disputed election market in Venezuela brought to light basic flaws in the way market results are controlled and settled. Thousands of smaller marketplaces are left unused and unstable since liquidity is still heavily concentrated in a few “headline” events.

According to the report, creating the infrastructure that allows the industry to grow safely and effectively is the most promising course of action going ahead, rather than trying to create the next big prediction platform. This includes AI-powered agents to help with forecasting and analysis, compliance tools for jurisdiction-specific onboarding, liquidity protocols to enable long-tail markets, and next-generation oracle systems.

“The prediction market sector has crossed into multi-billion-dollar territory, but its long-term viability hinges on solving governance, liquidity, and compliance at the infrastructure level,” the report notes.

These fundamental components, which are often disregarded in public discourse, will eventually decide whether prediction markets continue to be a niche or develop into a crucial component of international financial and informational systems, according to KuCoin Ventures.

KuCoin Ventures analysts Claude, Mia, and Oasis authored the whole report, which is accessible in Bahasa Indonesia. It displays the company’s continued dedication to research-based investments in financial infrastructure, Web3, and artificial intelligence.

With more than 40 million customers worldwide, KuCoin Ventures is the investment division of KuCoin Exchange. It provides both funding and long-term strategic assistance for early-stage investments in Web3, DeFi, AI, and crypto infrastructure.

Disclaimer: This report is intended just for informative reasons and is not intended to be a suggestion for investments or financial advice.