The explosion of prediction markets has moved gambling from paper to on-chain.

Throughout financial history, prices have always been a mirror of information. However, traditional markets can only reflect the current state of assets and have never been able to provide a definitive answer to the question of "what will happen in the future." It was not until the emergence of prediction markets that uncertainty was transformed into something tradable.

In recent years, various elections and geopolitical events have ignited the popularity of prediction markets. According to market data, the online prediction market size is expected to surpass $150 billion within three years. The low barriers to entry in crypto and the no-intermediary nature of DeFi allow global users to participate directly—without waiting for traditional financial license approvals. People here chase asymmetric returns, which essentially reflects the desire for wealth redistribution in an era of wealth disparity.

Interestingly, prediction markets are not purely probability gambling. Its core mechanism is that users buy and sell "shares" of the probability of events occurring on the platform, continuously adjusting prices and balancing consensus through these trading behaviors. Ultimately, the market functions like a "truth machine," gradually driving dispersed information towards the truth through mechanism design.

Polymarket is a typical representative of this mechanism. This platform demonstrates how decentralized pricing models operate through different market forms such as binary and multi-variant, as well as the arbitrage opportunities and self-correcting capabilities within it. The underlying algorithms and mechanism design determine whether prices can truly reflect reality.