I noticed an interesting observation from one of the founders of Ethereum — he criticizes how prediction markets are developing. And honestly, his arguments sound convincing.

In his opinion, these markets have turned into something like a casino for most participants. Short-term bets on cryptocurrencies, sports wagers, all of this provides only instant adrenaline, but no real value. The core issue is that platforms focus on uninformed speculators who essentially just lose money while experienced traders take it.

He divided participants into two groups: those who profit from informational advantage, and those who simply absorb losses. The second group is mainly retail investors. And here’s the point: if a platform depends on such dynamics, it creates an environment where reckless trading is encouraged. It’s like working in a casino — the system works as long as there are those who lose.

But what’s interesting is that he doesn’t just criticize but offers a solution. Prediction markets should transform into hedging tools. Imagine: local language models analyze your consumer habits and automatically create a betting portfolio that protects against rising prices for essential goods. This is no longer like working in a casino — it’s a financial instrument with real meaning.

Another idea: such markets could be denominated in income-generating assets instead of stablecoins pegged to fiat. Imagine that? People hold ETH or stocks for growth, and use personalized prediction market indices for stability. Fiat currencies become unnecessary.

This echoes his recent statements that DeFi is too dependent on the dollar. According to his logic, the industry needs to abandon fiat as a unit of account — stablecoins should be based on broad market indices, not government currencies.

By the way, at the end of last year, he called prediction platforms a filter for fakes and panic. Back then, it was about a different aspect, but the idea is the same: these markets can be useful if rethought. Currently, ETH price is around 2.36K — an interesting time to discuss how exactly such tools should develop within the ecosystem.