What are the Best Prediction Markets in 2024?
Are you new to prediction markets?
If so, you’ve probably noticed that there are many prediction market platforms to choose from these days. This may feel a bit overwhelming at first, but don’t fret—we’re here to help.
In this blog post, we will explore the current onchain prediction market landscape, analyze the most popular platforms, and compare their features so that you can make informed decisions as a smart user.
What Exactly are Prediction Markets?
At their core, prediction markets are online platforms where users can wager on the outcomes of future events.
In onchain prediction markets, users compete directly with one another, not against the “house.” Blockchains enable users to participate in peer to peer markets with decentralized resolution in a trustless and transparent manner. There’s no house that takes a massive cut, blocks users from winning, or decides who wins.
There are two main categories of prediction markets:
Financial markets involves predicting financial outcomes such as stock prices, cryptocurrency movements, and economic indicators. Popular among traders and market enthusiasts, it's a common and established category.
Political markets center around predictions related to political outcomes, including elections, policy changes, and government decisions. This category is well-recognized and engages participants interested in political developments.
Exotic markets cover a vast amount of topics including weather predictions, entertainment outcomes (like award shows or reality TV), or even specific social or cultural phenomena. These markets represent the greatest potential for crypto innovation within the prediction market space.
Sports markets are the most common. These markets enable people to bet on the outcomes of sporting events, such as the winner of a game, the final score, or specific player performances. In these markets, participants buy or sell shares based on their predictions, and the value of these shares fluctuates according to the likelihood of the predicted outcome happening.
The most popular type of prediction market setup is the Binary Options model, which involves financial derivatives that enable participants to bet on yes/no or true/false event outcomes. There are only two possible results: the event happens, or it doesn't. Traders predict if a specific event (e.g., Bitcoin’s price hitting a target) will occur by a set time. If correct, they receive a fixed payout; if wrong, they lose their investment. Binary options have a fixed risk/reward structure and an all-or-nothing outcome, making them popular for quick, decisive speculation. These markets are often the easiest to resolve, especially when there is a clear market rules and a credible, easily-accessible outcome verification source.
Other prediction market setups include scalar, categorical, and parimutuel markets.
What Happens “Under the Hood”
Onchain prediction market platforms operate on various blockchain networks, with many utilizing Ethereum layer 2 chains for their lower gas fees, faster transaction times, and enhanced scalability.
Prediction markets rely on different mechanisms to facilitate trading and ensure liquidity within markets. The two most common models are order books and automated market makers (AMMs). Each comes with its own advantages, trade-offs, and ideal use cases.
Order Book: A systems that matches buy and sell orders, enabling users to place trades at specific prices. It’s commonly used in traditional financial markets and several prediction market platforms. The key advantage of this model is the control it gives users by allowing them to set precise prices for trades. However, its effectiveness depends heavily on active participation and liquidity; without sufficient users placing orders, trades may not execute efficiently. This model is ideal for experienced users who want full control but can be complex and intimidating for beginners.
AMM: A system that uses liquidity pools, where users trade directly with a pool of assets rather than matching with individual buyers or sellers. DeFi platforms like Uniswap popularized this model for its simplicity and constant liquidity—users can always execute trades, even in low-volume markets. However, AMMs can suffer from slippage when the price moves significantly during large trades due to limited pool liquidity. While AMMs offer a user-friendly experience and constant access to liquidity, they lack the precision and flexibility provided by order books.
It is also critical for prediction markets to have a mechanism for handling market settlement and dispute resolution. There are currently four main models:
Centralized Resolution: A centralized entity (usually the platform itself or a trusted data provider) decides the outcome of the market.
Oracle-Based Resolution: Oracles are networks of data providers that read real-world information and report it to smart contracts onchain. With this method, the outcomes of markets are determined by external data fetched from oracles (e.g., price feeds, election results, sports scores).
UMA’s Optimistic Oracle uses optimistic verification combined with a decentralized dispute resolution mechanism to settle prediction markets quickly, efficiently, and accurately.
Hybrid Models: Some platforms combine several resolution methods. For example, a market might initially use a centralized oracle but offer community dispute resolution or arbitration as a backup.
Prediction Market Platform Analysis
Now that you know the basics, let’s analyze the most popular prediction market platforms and compare them against each other.
Polymarket
Polymarket is the most popular decentralized prediction market platform. One of its unique features is the ability for users to trade shares before an event is resolved, making markets dynamic and profitable even before outcomes are known. However, Polymarket has faced regulatory issues in the U.S., and users in certain regions are restricted from participating. You can track Polymarket’s performance data here.
Market Categories: Sports, financial markets, political markets, and exotic markets.
Blockchain(s): Polymarket is deployed on Polygon, which offers lower fees and faster transactions compared to Ethereum.
Mechanism Design: Polymarket uses a discrete-time double auction order book system, where users place buy and sell orders at specified prices. Trades are not matched instantly but are instead processed at set intervals, allowing orders to be batched together. This approach improves price discovery, especially in markets with lower liquidity, and helps keep transaction costs low while maintaining fair and efficient trading.
Resolution Method: Optimistic Resolution (with Dispute Mechanisms)—Polymarket uses UMA’s Optimistic Oracle to settle markets and resolve disputes in a decentralized manner.
Live Incentives: Polymarket currently provides USDC trading rewards through its Liquidity Rewards Program, where users can earn rewards by placing limit orders that help maintain market liquidity. These rewards are distributed based on how close the orders are to the market's average price—the more competitive the orders, the higher the potential earnings. The rewards are paid out daily to incentivize active participation in the platform’s markets.
predict.fun
predict.fun is a new decentralized prediction market that allows users to predict outcomes in various fields and focuses on seamless, cost-effective trading with no maker fees and capped taker fees. Their platform is very unique and enables users to earn yield on their bets. You can track predict.fun’s performance data here.
Market Categories: Sports, financial markets (primarily cryptocurrency), and political markets.
Blockchain(s): It operates on the Blast L2 blockchain, which offers a fast and efficient user experience with low transaction costs. Users can generate yield on their bets thanks to Blast’s native yield.
Mechanism Design: The platform uses a limit order book system, allowing users to place trades at specified prices and accumulate points by placing orders close to the market price.
Resolution Method: Optimistic Resolution (with Dispute Mechanisms) — predict.fun uses UMA’s Optimistic Oracle to settle markets and resolve disputes in a decentralized manner.
Live Incentives: Predict.fun is currently rewarding early users with unique incentives tied to the platform’s growth. Users can accumulate Blast Gold points through market participation, with rewards scaling based on how close the orders are to the market's last price. There is also the possibility of future token airdrops.
SX Network
SX Network is both the longest-running web3 betting platform and largest decentralized prediction market. SX launched its own EVM-compatible blockchain, which handles every aspect of the betting process, from market creation to settlement, ensuring everything is performed on-chain.
Market Categories: Sports, financial markets (cryptocurrency), and political markets.
Blockchain(s): SX Network is it’s own blockchain built on Polygon Edge, making it an EVM-compatible Layer-2 blockchain that offers Ethereum’s security with Polygon’s scalability.
Mechanism Design: SX Network operates on a peer-to-peer betting system, meaning users can both offer and accept bets, unlike traditional sportsbook models. Users create markets through a sports market API or a GUI dApp. After a market is created, a unique market hash is stored in the Market Registry, ensuring transparency and traceability. This design is facilitated by a central limit order book (CLOB) system, where users can place buy and sell orders for prediction markets, and trades are matched in real-time based on price and availability. This model allows for transparent, decentralized trading and gives users control over their pricing and execution of trades.
Resolution Method: Oracle-Based — The protocol uses oracles to report event outcomes and relies on Network validators to vote on these outcomes, achieving consensus through majority (two-thirds) voting. Market creators report outcomes as either a win, loss, or void, ensuring fair settlement.
Live Incentives: Users can earn SX tokens by participating in bets and staking on the platform. The protocol is community-driven, with all fees collected from prediction markets funneled into a community treasury.
Limitless
Limitless is a prediction market platform that allows users to create their own markets. They have been steadily growing, with a notable increase in both all-time trading volume and weekly active users. You can view Limitless’s performance data here.
Market Categories: Limitless enables user-generated markets, focusing on financial markets (price predictions for cryptocurrencies and stocks) and exotic markets (headlines about current events and news).
Blockchain(s): The platform is built on Base, which offers a scalable environment with lower fees.
Mechanism Design: Limitless uses a continuous price discovery mechanism similar to binary options. Participants can trade outcome shares in real-time until market resolution. They currently use a CPMM rule, but a more advanced AMM is in development.
Resolution Method: Centralized — Markets are currently resolved by the Limitless team. However, they plan to automate market resolution for deterministic markets, like price predictions, using data feeds in the future.
Live Incentives: Limitless pays liquidity providers 1% fees on every transaction. Additionally, they offer creator rewards for market suggestions that generate volume. The rewards vary depending on the market's volume upon debut and over time.
Drift BET
Drift Protocol, originally a decentralized exchange (DEX), recently introduced BET (Betting Earn Terms) on Solana. A unique feature of BET is the ability to trade using any collateral supported by Drift, including over 30 assets. This flexibility enables users to hedge their bets and provides a more versatile experience compared to other platforms that typically limit users to a single type of collateral. You can view Drift BET’s performance data here.
Market Categories: Financial markets, politcal markets, and exotic markets. Formula 1 and sports markets coming soon.
Blockchain(s): Drift operates on the Solana blockchain, known for its high-speed transactions and low fees, making it ideal for capital-efficient prediction markets like BET.
Mechanism Design: Drift’s BET markets integrate seamlessly into the broader decentralized exchange, allowing users to utilize any collateral available on the platform. The capital-efficient design enables more complex betting strategies, such as hedging, which offers flexibility beyond traditional prediction markets.
Resolution Method: Centralized — Market outcomes on Drift are determined by an in-house security council, which handles the listing, arbitration, and resolution of markets.
Live Incentives: Drift offers users the opportunity to earn yield on their bets by allowing the use of yield-bearing stablecoins and other crypto assets as collateral. This feature allows users to generate additional returns as events progress and unfold.
Azuro
Azuro is considered a decentralized infrastructure and liquidity layer for building prediction markets and related applications. Not only do they supply prediction markets, they also provide toolkits for developers to create and launch custom prediction apps with ease. A key feature is Azuro’s Liquidity Tree model, which helps optimize capital usage and reduce slippage. This feature improves liquidity management for all prediction markets built on the protocol. You can view Azuro’s performance data here.
Market Categories: Sports and exotic markets.
Blockchain(s): Azuro is deployed on EVM-compatible blockchains, making it highly versatile and accessible to developers and users across various Ethereum-based ecosystems.
Mechanism Design: The Azuro protocol uses a hybrid oracle/automated market maker (AMM) system to determine market odds and ensure transparency in the outcome resolution. This setup allows for more liquid markets while offering fair and accurate pricing across events. Their platform also use a unique Liquidity Tree model, which offers a more efficient way to manage liquidity by organizing funds into a tree structure. This structure allows liquidity providers to allocate assets more strategically, minimizing wasted capital and slippage.
Resolution Method: Hybrid (Centralized and Oracle-Based) — Azuro's current resolution mechanism uses permissioned Data Providers who create, manage, and resolve markets. These providers act as trusted entities to supply event outcomes. This setup is partially centralized since it relies on a set group of providers rather than a fully decentralized process. Azuro plans to make this role permissionless in the future, aiming for a more decentralized and transparent system. While the protocol also incorporates oracles and a peer-to-pool model, the move toward a permissionless system is intended to reduce reliance on centralized entities.
Live Incentives: Azuro incentivizes liquidity providers by allowing them to choose where to allocate their funds within the Liquidity Tree. This model provides flexibility, optimizing returns while minimizing risks associated with market liquidity. Liquidity providers also earn a percentage of the profits generated by the markets they support.
Hedgehog Markets
Hedgehog Markets is a decentralized prediction market platform that focuses on transparency and ensuring public access to market data. Their platform provides "no-loss markets," which allow participants to bet without risking their initial capital. User funds generate yield through DeFi protocols while markets are open, reducing risk and enhancing engagement.
Market Categories: Sports, financial markets, political markets, and exotic markets.
Blockchain(s): Hedgehog operates on the Solana blockchain, which enables lightning-fast transactions and low fees.
Mechanism Design: Hedgehog utilizes both peer-to-peer betting and an AMM model. Their platform features parimutuel pools, which allow multiple users to contribute to a collective pool without the need for a market maker. In addition to this, they offer traditional prediction markets and the ability to sell shares at any time.
Resolution Method: Oracle-Based — Hedgehog Markets currently uses Switchboard, a decentralized oracle network on Solana. All transactions and market resolutions are fully on-chain and the outcomes of events are determined via smart contracts. However, Hedgehog is developing its own optimistic oracle on Solana to ensure accurate and decentralized market resolutions.
Live Incentives: Users have the opportunity to stake their predictions within pooled prediction markets and earn passive yield from the trading volume. This adds an additional engagement layer for participants and attracts more liquidity to the platform.
Overtime Markets
Overtime Markets is a decentralized sports prediction market platform built on Thales Protocol. Although their platform in comparatively new, Overtime trading volume and active user count is growing quickly. You can view Overtime Market’s performance data here.
Market Categories: Sports (including eSports) and political markets.
Blockchain(s): Overtime is built on the Thales Protocol, which is deployed on Optimism, Arbitrum, and Base.
Mechanism Design: Overtime operates as a sports AMM (automated market maker), allowing users to buy and sell UP or DOWN positional tokens for live sporting events. The market operates on an order book basis, with liquidity provided by the AMM. Token prices reflect the likelihood of an event’s outcome and are updated frequently based on market activity. The positional tokens settle at market expiry based on the event’s real-world outcome.
Resolution Method: Oracle-Based — Overtime uses Chainlink oracles to provide tamper-proof sports data feeds from providers like Pinnacle Sports and JsonOdds. These oracles ensure accurate and decentralized settlement of markets by determining the outcome of the events onchain.
Live Incentives: Overtime offers incentives through its THALES staking system, which allows users to earn rewards based on their trading volume and participation in the sports markets. Stakers are also rewarded when the platform generates volume.
New & Upcoming Prediction Market Platforms
The prediction market space is growing fast. Here are a few new platforms to keep an eye on:
9Lives is a cutting-edge prediction market platform built by Superposition. It offers deep liquidity and advanced trading features through its dynamic pari-mutuel market (DPM) model. Built on Arbitrum Stylus, it eliminates order books for continuous settlement, reducing costs and risks for participants while enabling complex order types like leverage and options.
OutcomeMarket, built by Wintermute, is a permissionless smart contract for a US presidential election prediction market. It is accessible across Ethereum, Base, and Arbitrum, supported by Chaos Labs' Edge Proofs Oracle to ensure tamper-proof and reliable data. OutcomeMarket introduces two tokens, $TRUMP and $HARRIS, which are ERC-20 compatible and can be used in various DeFi applications. Its design allows for direct participation across multiple chains without the need for asset bridging, and any trading venue can list the tokens without minting or transaction fees.
TMR.NEWS is a natural language prediction market for forecasting tomorrow's New York Times headline. Users can type any sentence as a prediction and stake an amount on it. These predictions are judged on-chain using OpenAI, with data from the New York Times brought on-chain via web proofs. Built on Base, the platform's contracts are verified on BaseScan.
Swipe is a prediction market platform described as the “Tinder of prediction markets.” Users swipe left or right to place bets across various market categories including crypto, politics, sports, and major events. The platform focuses on short-term events and aims to deliver fast results for quick engagement. It is built as a Telegram mini-app, making it easy to connect with friends, share predictions, and bet together. Swipe features user-generated predictions and a unique bonding curve for market creation. Additionally, it offers incentives including daily free swipes and a points-based rewards system.
Additionally, there are three upcoming platforms that are worth paying attention too:
PredictHUB is going to be the first decentralized prediction market platform to launch on Arbitrum. They will be using UMA’s Optimistic Oracle to settle markets and resolve disputes. Their Testnet is currently live, and they plan on deploying their Mainnet application mid-September 2024.
Infinite Games is an emerging decentralized AI prediction engine that integrates AI Large Language Models (LLMs) to improve forecasting accuracy for various types of future events including political, economic, and sports-related predictions. The platform incentivizes "predictors," enabling anyone to launch LLM-based predictions that can analyze data across domains to make informed forecasts. This model uses cross-domain inference to aggregate large amounts of real-world data and improve prediction accuracy and speed. Infinite Games will be using UMA’s Optimistic Oracle to settle markets and resolve disputes.
Myriad Markets is a prediction market platform integrated with digital media that’s transforming passive content consumption into interactive engagement. Users can predict outcomes directly within the content through a browser extension and stake on future events. The platform also incorporates gamified elements like "quests," where users earn points by completing tasks such as reading articles or watching videos. This creates a more interactive experience while offering media companies insights into consumer behavior, contributing to a sustainable revenue model for content creators and publishers.
Inertia is a mobile-first prediction market building on the Avalanche blockchain. Their platform is designed to appeal to a broad audience, catering both to "hyper degenerate" users who thrive on speculative markets and to more casual users, or "normies," interested in various topics. Inertia’s mobile-first approach aims to address the accessibility challenges faced by existing desktop-first prediction markets.
How to Choose a Prediction Market Platform
As you’ve seen, there are a lot of platform options to choose from. This is a good thing because competition leads to industry-wide improvement and gives users the freedom of optionality.
The truth is, there is no one-size fits all solution here. The best one for you depends on your specific values, goals, and desired user experience. Ask yourself:
What types of markets do I want to trade?
Which blockchains do I prefer?
Is there a specific mechanism design I prefer?
What resolution method do I like the best?
How important are bonus incentives to me?
How supportive is the team and community?
If anything, you can try all of them and pick the one(s) you like the most.
Good luck, and happy predicting! 🔮
Get Involved
Want to earn rewards for securing prediction markets? Learn how to get started as a voter in UMA’s Optimistic Oracle here.
Ready to build your own prediction market platform? Learn how to build using the Optimistic Oracle as your backbone here.
Also, make sure to follow UMA on Twitter and join our Discord community to stay up to date on everything prediction markets.
