- An increase in user engagement is demonstrated by the fact that Polymarket hosted over 35,500 new markets in October alone, the largest monthly amount to date.
- The report argues that the infrastructure that supports the entire ecosystem is where the real value resides.
A new strategic report from KuCoin Ventures looks at the explosive expansion of prediction markets, which already generate over $2 billion in weekly trading volume. While platforms like Polymarket and Kalshi have received the majority of public attention, the report argues that the infrastructure that supports the entire ecosystem is where the real value resides.
A thorough framework for understanding how prediction markets are evolving from speculative tools to a new level of financial infrastructure is provided in the report. The current trading activity is dominated by platforms such as Kalshi, now valued at $5 billion, and Polymarket, which recently received a $2 billion investment from Intercontinental Exchange (ICE) at a valuation of $8 billion. But their success has also highlighted three fundamental issues: regulatory uncertainty, dispersed liquidity and oracle conflicts.
An increase in user engagement is demonstrated by the fact that Polymarket hosted over 35,500 new markets in October alone, the largest monthly amount to date. But cases like the “Zelenskyy Suit” and the disputed election market in Venezuela showed fundamental flaws in how market outcomes are controlled and determined. Thousands of smaller marketplaces are left unused and unstable as liquidity remains heavily concentrated in a few “headline” events.
According to the report, creating the infrastructure that allows the industry to grow safely and efficiently is the most promising approach moving forward, rather than trying to create the next big prediction platform. This includes AI-powered agents to assist with forecasting and analytics, compliance tools for jurisdiction-specific onboarding, liquidity protocols to enable long-tail markets, and next-generation oracle systems.
“The forecasting market sector has moved into multi-billion dollar territory, but its long-term viability depends on solving infrastructure-level governance, liquidity and compliance,” the report notes.
These fundamental components, often overlooked in public debate, will eventually determine whether prediction markets remain a niche or evolve into a crucial component of international financial and information systems, according to KuCoin Ventures.
KuCoin Ventures analysts Claude, Mia and Oasis wrote the full report, which is available in Bahasa Indonesia. It demonstrates the company’s continued commitment to research-based investments in financial infrastructure, Web3 and artificial intelligence.
With more than 40 million customers worldwide, KuCoin Ventures is the investment arm of KuCoin Exchange. It provides both funding and long-term strategic support for early stage investments in Web3, DeFi, AI and crypto infrastructure.
Disclaimer: This report is for informational purposes only and is not intended to be an investment proposal or financial advice.
