A retrospective of the 2025 prediction market's explosive growth and eventual collapse.

Author: K三Kai; Source: X,@kaikaibtc

If the DeFi Summer of 2020 was the first enlightenment of on-chain finance, then in 2025, we are experiencing a Cambrian explosion of "Information Finance."

In the past, we always said "Code is Law"; now, looking at the crazy data of the prediction market this year, I would say more: "Money is Truth."

Prediction market data (Source: DefiLlama, Date: December 27)

Prediction markets have finally crossed the chasm and become a truly mainstream application in the crypto world.

Today, we'll delve into this sector: What is it? Why is it exploding now? And in the three-way battle between Polymarket, Kalshi, and the rising star OPINION, where are the opportunities for ordinary traders?

I. What Exactly is a Prediction Market? (More Than Just Gambling) Many outsiders, and even newcomers to the field, upon hearing "prediction market," immediately think: "Isn't it just betting on sports or elections? It's just gambling in a different guise." However, a prediction market is essentially a "binary options market," but the underlying asset it trades is not stock prices, but rather the "certainty of the future world." In a casino, the odds are fixed; the house always wins. In a prediction market, price represents probability. If the contract price for "the Fed cutting interest rates in December" is $0.60, it means the market believes there is a 60% probability that it will happen. When thousands of people wager real money, the price formed by these funds is often more accurate than CNN polls, Wall Street analysts' reports, or even experts' pronouncements. **Because people can lie, but money can't.** Therefore, the prediction market isn't a casino; it's a "layer of truth" in human society. Through incentive mechanisms, it pieces together fragments of information scattered around the world, creating a picture that most closely resembles the future. II. The Catalyst for the Explosion: Why 2025? A glance at the data reveals a very clear turning point.

Polymarket data (Source: DefiLlama, Date: December 27)

1. The "Nuclear Explosion" Effect of the 2024 US Election

Undoubtedly, the 2024 US election was a "hot topic" for prediction markets. At that time, Polymarket's data repeatedly outperformed traditional polls, and the final results validated the market's accuracy.

Predicting Market Data (Source: DefiLlama, Date: December 27)

1. Kalshi: The Counterattack of a Compliance Behemoth

Positioning: A compliant platform regulated by the US CFTC, supporting only fiat currency.

Data: 7-day trading volume reached a staggering $1.8 billion ($1.805 billion), ranking first across the entire network.

Evaluation: Kalshi wins because of its "high-level" presence. Due to compliance, institutional funds and hedge funds from Wall Street can enter without hindrance. It is becoming the preferred venue for traditional financial institutions to hedge policy risks. Although it is not Crypto Native, its liquidity is undeniable.

2. OPINION: A Dark Horse Emerging in Traffic

Positioning: An aggressive challenger, possibly relying on a high-performance chain (such as Solana or a specific L2).

Data: 7-day trading volume reached $859 million, with a TVL of approximately $90 million. **Evaluation:** An incredibly rapid growth rate. OPINION has likely made significant optimizations to its incentive mechanisms and user experience (UI/UX), or has tapped into certain long-tail markets (such as entertainment, KOL gossip, etc.). It proves that besides politics and finance, there is a huge demand for entertainment. 3. Polymarket: The Spiritual Totem of the Crypto World **Positioning:** The world's largest decentralized prediction platform, the orthodox Crypto platform. **Data:** TVL approximately $320 million (some charts show $446 million), 30-day trading volume $2.12 billion. **Evaluation:** Although surpassed by Kalshi in terms of short-term explosive growth over 7 days, Polymarket remains the top choice for crypto natives. Its advantage lies in its "permissionless" nature—anyone can set up a position anywhere. Moreover, with its upcoming L2 and token launch, I still believe it's the project with the greatest alpha potential. Its user engagement is extremely high; it's more like a community than just a trading platform. 4. Other Players SX Bet: Focuses on sports betting; although relatively small (TVL 900,000), it's doing well in its niche market. Predict.Fun: As the name suggests, it's a meme-style prediction platform, primarily targeting highly speculative, niche events.

Comparison Table of Core Projects in the 2025 Prediction Market "Three Kingdoms Kill"

Exclusive Commentary and Strategy：

1. Where is the biggest alpha? — Polymarket

Don't be fooled by Kalshi's top trading volume; that's because US institutions have entered the market. But for those of us in the crypto world, Polymarket is the true king of the pack.

Don't be fooled by Kalshi's top trading volume; that's because US institutions have invested in it. But for those of us in the crypto world, Polymarket is the true king of the pack.