Prediction markets should become hedging platforms, says Buterin

Prediction markets should pivot from short-term betting and move toward becoming price stability instruments for consumers, Buterin argued.

Ethereum co-founder Vitalik Buterin said he is starting to “worry” about the direction of prediction markets and suggested that they shift to become marketplaces to hedge against price exposure risk for consumers.

Prediction markets are “over-converging” to “unhealthy” products that are focused on short-term price betting and speculative behavior as opposed to long-term building, Buterin said in an X post.

Instead, onchain prediction markets coupled with AI large-language models (LLMs) should become general hedging mechanisms to provide consumers with price stability for goods and services, Buterin said. He explained how this system would work:

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