Prediction Market

Prediction markets allow traders to buy and sell shares representing the probability of an event occurring. Prices range from $0.00 to $1.00 (or 0–100¢), with the market price at any moment reflecting the collective consensus probability. When the event resolves, shares in the correct outcome pay out $1.00 while shares in the wrong outcome expire worthless.

The core insight behind prediction markets is that financial incentives encourage participants to reveal their true beliefs rather than posture or guess. Unlike polls, where respondents face no consequences for inaccurate answers, traders in prediction markets put real money behind their forecasts, creating a self-correcting mechanism that aggregates dispersed information from many participants.

Prediction markets have a documented track record of outperforming expert forecasts and traditional polling in many domains, including political elections, economic indicators, and geopolitical events. Major platforms today include Polymarket (crypto-settled, globally accessible), Kalshi (CFTC-regulated, US-focused), and Metaculus (reputation-based, non-financial).