Ethereum’s Vitalik Buterin Rebukes Claims that Polymarket is Gambling

Vitalik Buterin responds to Polymarket criticism, highlights misunderstandings on prediction markets.

Ethereum co-founder Vitalik Buterin recently addressed the ongoing debate surrounding Polymarket and its classification as gambling. Buterin’s comments came after some users voiced concerns over the nature of decentralized prediction markets, triggering a conversation about how the community understands these platforms.

“gambling/prediction markets like Polymarket”

Putting Polymarket into the category of “gambling” is a massive misunderstanding of what prediction markets are or why people (incl economists and policy intellectuals) are excited about them.

Prediction markets are interesting…

— vitalik.eth (@VitalikButerin) August 25, 2024

Buterin explained that prediction markets like Polymarket are often misunderstood. In his view, they serve as a social epistemic tool, allowing the public to gain insights into important events without the influence of editorial bias. 

Buterin noted that these markets provide a clearer sense of what is likely to happen in a way that surpasses both social media and news outlets. He emphasized that conditional prediction markets are already finding applications in governance.

Confusion Over DeFi vs. Prediction Markets

The conversation was prompted by a user known as “strobie reeeee” who suggested that confusion arises from how people perceive decentralized finance (DeFi). The user argued that Buterin’s perceived skepticism toward DeFi could stem from the public’s association of DeFi with unsustainable token issuance schemes from 2021. 

However, the user pointed out that DeFi also encompasses healthier applications like lending, borrowing, and synthetic assets. In response, Buterin acknowledged the concerns but reiterated that he supports decentralized applications that are both useful and sustainable over time, highlighting that prediction markets fall into this category due to their utility in information sharing and decision-making.

Surging Adoption of Polymarket

Meanwhile, data shared by Richard Chen indicates that Polymarket has seen a significant uptick in user engagement. The decentralized prediction market platform has reported consistent growth in both trading volume and user accounts. For the past four consecutive months, Polymarket has witnessed a steady rise in monthly trading users, with figures nearing 54,000. 

Furthermore, the platform’s open interest and trading volumes have also seen a significant spike, crossing $100 million for the first time in its history. Additionally, from mid-2023 onward, there is a significant surge in the number of new Polymarket accounts, with peaks reaching over 60,000 new accounts in recent months of 2024.

Stablecoins and Sustainable Applications

Buterin also expressed his views on stablecoins, calling attention to their role in fostering global economic openness. Although he prefers decentralized options like RAI, he acknowledged that USDC remains more convenient for international transactions, particularly for donations.

Buterin clarified that while he has reservations about USDC, he sees it as a step towards broader adoption of more decentralized stablecoins.