Prediction Market Analysis: Emerging Projects and Market Trends

Prediction markets can be divided into two main categories: non-sports and sports. Non-sports markets have not yet been fully developed and involve various fields such as cryptocurrency, politics, and cultural events. A well-known platform holds a leading position in the non-sports market, mainly focusing on political events.

From the overall trading volume from the beginning of the year to now, including the sports market, the trading scale of several major platforms is relatively close.

Recently, several competing projects have been successively launched, including an ETH market platform running on EVM and a platform that sets odds after placing bets on SOL. In addition, several projects are currently under development.

The topics of interest for emerging teams include:

1. Permissionless market: Open market creation and incentive mechanism
2. Intelligent Solutions: Utilizing artificial intelligence for market settlement or creating more efficient systems

The sports market has built a solid user base in the Web2 environment. However, attracting users to switch to cryptocurrency is no easy task, as most users value brand and user experience. Traditional sports betting platforms often have large marketing budgets.

It is worth noting that the betting amount for a single Super Bowl in the United States far exceeds the total trading volume of the crypto prediction market to date. As more funds flow into the blockchain, on-chain sports betting is also expected to grow.

One major limiting factor of prediction markets is the lack of leveraged trading. Some projects are developing perpetual trading and leveraged trading features, but issues related to liquidation and bad debts remain to be resolved. The "parlay betting market" is a direction worth exploring and is, in fact, a type of leveraged betting.

The prediction market mechanism can be divided into two categories: Web2.5 and Web3. Web2.5 uses cryptocurrency as a payment method, but the counterparty is the team behind the application. Web3, on the other hand, has a certain footprint on-chain, typically matching on-chain bets through AMM or order books.

In the Web3 space, meme coins have become a prediction market in themselves. Users can profit by choosing the right direction and focus while speculating on the speculative behavior of others. Some new protocols are attempting to combine the advantages of prediction markets and meme coins.

The profit model of the prediction market protocol mainly includes transaction fees, bonuses for some traders, and accumulated counterparty earnings.

In the future, artificial intelligence agents may become key players in the field, capable of quickly responding to news, managing orders and inventory, executing betting strategies, and calculating expected outcomes. It is expected that in the coming years, at least one protocol will achieve trading volumes that compete with existing leading platforms.

To maintain market vitality, various protocols may require extensive use of incentives such as points, tokens, or stablecoins. From the current trend, the trading volume of non-prediction markets continues to grow, providing a positive signal for market vitality in the post-election period.