In the field of encryption prediction markets, many promising projects have emerged that utilize blockchain technology to provide a decentralized and transparent platform for predicting future events. Following the news of Polymarket and Kalshi seeking funding with valuations exceeding $10 billion, several eye-catching projects have also appeared in this sector, with 42 being one of them.

What is 42? Targeting the liquidity shortcomings of prediction markets

42 days ago, X published an article “The Cultural Liquidity Gap: Why So Few Moments Become Prediction Markets?” exploring why prediction markets are in demand and their intrinsic connection to culture. The full text is as follows:

Every day, people quietly predict what will happen tomorrow.

Will my team win tonight?

Can this meme survive the hype cycle?

Will this new artist break into the charts?

We like to speculate. We are happy to care. We expect to predict correctly.

In billions of people, in billions of different places, belief becomes a common instinct, even if that moment feels personal.

This is the origin of the market.

Cultural Prototypes of Future Thinking

The market is not just numbers on a chart. It is a signal of important things.

The core of the prediction market is a cultural vernacular: a way for communities to express their views on what will happen in the future. They transform opinions into markets. They reveal collective truths, or at least the path that society believes we are heading towards.

Most importantly: they make the future participatory. When people invest in their beliefs, they become part of the unfolding story. They are not just observing culture; they are shaping it.

Liquidity Gate

But today's prediction markets are not perfect.

Currently, the market relies on liquidity providers or market makers to operate. This means that others will decide which topics are 'worth' entering the market.

As emphasized by @MovieTimeDev:

“Liquidity is the biggest issue in prediction markets.”

Higher liquidity = larger price spread

There are 19,736 markets on Polymarket.

The liquidity of 16 markets exceeds 1 million USD.

Liquidity of 574 markets exceeds $100,000

Liquidity over $10,000 in 3,401 markets

Weak liquidity = excessive spread = poor price"

Even with its staggering scale, today's market still struggles to reach the moments that truly foster culture. When liquidity determines what can be traded, people's attention naturally focuses on the most eye-catching headlines, while everything else, such as news, niche markets, and personal sentiments, gets left behind.

But culture is not merely shaped by headline news events. It is built on the subtle collisions of ubiquitous passion and curiosity, within esports server chats, group DMs, online controversies, fan wars, and micro-communities that evolve at internet speed.

When liquidity becomes an obstacle, curiosity will become intangible.

Insight becomes stagnant. Signals remain silent.

When curiosity drives the market

But imagine a world where anything people care about can exist in the market, even if the audience is small, unfamiliar, or novel. Every community has the ability to create a market around what they care about.

The long tail effect of culture has finally been revealed.

The sense of excitement continues to grow. Engagement continues to deepen.

The landscape of collective intelligence is also constantly expanding.

When liquidity is no longer a limiting factor, every moment can become a market. A new cultural canvas will be unlocked.

The 42 Protocol is about to be launched.

Overview of Mainstream and Emerging Prediction Market Projects

Here is a review of some noteworthy projects in the prediction market space:

1. Polymarket

• Platform Features: Polymarket is currently one of the most popular and liquid decentralized prediction markets. It offers a wide range of prediction markets on various events such as political elections, sports, and current affairs.
• Technical Architecture: The platform is built on the Polygon network to achieve low transaction fees and fast transaction confirmations.
• Trading Mechanism: Users trade using the stablecoin USDC to purchase shares representing specific outcomes. The prices of these shares fluctuate based on the market consensus on the probability of the event occurring.
• Recent Developments: Although services have been suspended in the United States since 2022, its global market remains active with significant trading volume.

2. Kalshi

• Platform Features: Kalshi is an event contract trading platform regulated by the U.S. Commodity Futures Trading Commission (CFTC).
• Compliance: Unlike Polymarket, Kalshi operates within a compliance framework that allows U.S. users to participate legally. Its trading volume surpassed Polymarket in 2025, making it a leader in the field.
• Market Type: Provides trading markets for various events, including weather patterns and economic indicators.

3. Augur (REP)

• Platform Features: Augur is a pioneer in the prediction market space, launched as early as 2018 and operating on the Ethereum network.
• Degree of Decentralization: As a fully decentralized platform, Augur allows users to create markets and use its REP tokens to report and dispute outcomes, thereby ensuring the fairness of settlements.
• Current Status: Despite its innovation being widely recognized, its Total Value Locked (TVL) is currently relatively low, and its market activity is not as high as some emerging players.

4. PredX

• Platform Features: PredX is an AI-driven prediction market designed to provide smarter predictive insights by integrating AI technology.
• Technical Architecture: PredX operates on the Sei network, utilizing an AI recommendation engine to provide users with event insights and encourages influential figures (KOL) to create markets.
• Financing Situation: PredX completed its seed round financing in 2024, attracting attention from the capital markets.

5. Azuro

• Platform Features: Azuro is committed to becoming a decentralized infrastructure that supports prediction for various events such as sports, esports, and politics.
• Development Direction: The project focuses on enhancing transparency and composability, aiming to attract more developers and users through a modular architecture.

6. Gnosis

• Platform Features: Gnosis is not just a prediction market, but also an ecosystem that provides infrastructure for decentralized applications, and its protocol can be used to build prediction markets.
• Core Functions: Gnosis provides a variety of tools and protocols to support developers in building secure and efficient decentralized prediction markets.

Other new projects worth paying attention to

• Limitless: The leading prediction market on the Base network, offering a fast and low-cost trading experience.
• Drift BET: A prediction market in the Solana ecosystem, known for its fast settlement and low fees.
• Meleemarkets: Known as “the Pump fun of prediction markets”, it supports fast and low-cost event and opinion leader trading.
• PrecogMarket: Based on Bittensor infrastructure, focusing on cryptocurrency price prediction.

Track Prospects and Development Directions

The encryption prediction market has rapidly developed in recent years and shows the following trends:

• Integration of AI Technology: More and more projects are beginning to utilize AI technology to provide data analysis and intelligent recommendations to enhance user experience and prediction accuracy.
• Compliance Exploration: Projects like Kalshi are exploring the path of compliance, which may bring more funds and users from the traditional financial sector to the prediction market.
• Cross-chain ecosystem expansion: The project begins deploying on different Blockchain networks (such as Polygon, Solana, Base) to leverage the advantages of different ecosystems.
• User Incentive Mechanism: Encourage users to actively participate in market creation and trading through trading incentives, creator shares, and other methods.

In summary, the encryption prediction market sector is undergoing rapid innovation and evolution, attracting significant capital and new projects to join. In the future, with technological advancements and the popularization of user education, this sector is expected to become an important application scenario in Web3. What surprises can 42 bring us? Let's wait and see.