- Vitalik Buterin shared his vision on prediction markets.
- The Ethereum co-founder believes users have yet to tap the full potential of these markets.
- According to him, the markets can evolve to support “info finance.”
Ethereum co-founder Vitalik Buterin has highlighted the potential of prediction markets to evolve from simple betting platforms to “info finance” conduits that can transform how users gather information on social media, science, news, governance, and other fields.
Buterin championed the idea in a November 9 article titled “From prediction markets to info finance.” In his vision, info finance is a three-sided market in which bettors make predictions, viewers read predictions, and the market projects forecasts about the future as a public good.
Widening the Scope of Prediction Markets
Buterin said broadening the scope of prediction markets to support this new category would entail leveraging finance “as a way to align incentives” to provide viewers with valuable information.
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“Different actors make different buy and sell decisions because of different opinions about what will happen in the future (in addition to personal needs like risk preferences and desire to hedge), and you can read market prices to infer a lot of knowledge about the world,” Buterin wrote.
According to the Ethereum co-founder, information finance is an “incredibly powerful category” with use cases in areas like decentralized autonomous organizations (DAOs), public goods funding, personal tokens, advertising, and scientific peer review.
In DAO applications, info finance presents several solutions to decentralized governance problems. For example, it can mitigate centralization risks if key proposals are decided by prediction markets along with humans and AI forecasting the votes.
“The key is the balance between market and non-market: the market is the "engine", and some other non-financialized trustworthy mechanism is the "steering wheel",” Buterin noted.
Buterin believes AI technology would be instrumental in turbocharging info finance because most of the concept’s “interesting” applications are “micro” questions that involve millions of mini-markets for low-consequence decisions.
Per his idea, AI would allow users to get high-quality information even on small markets with $10 of volume.
Read about Vitalik Buterin’s plan to reduce Ethereum’s bloat and complexity:
Vitalik Buterin Shares Plan to Reduce Ethereum’s Bloat and Complexity
Stay updated on Uniswap’s step to revolutionize cross-chain trading:
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