Prediction markets are having a moment. After Joe Biden’s halting debate performance last month led to speculation that he might drop out of the race, the blockchain prediction market Polymarket – where users had already been betting on the incumbent’s election odds – became a useful resource for gleaning public sentiment.
Polymarket lets users bet on everything from sporting events to science. Although it’s illegal to bet on election outcomes in the United States, Polymarket’s global prediction markets have earned citations alongside traditional voter polls in Beltway discussions concerning the 2024 U.S. presidential election.
Now, the Coinbase Ventures-backed Vega network is joining the competitive fray with its own betting-focused upgrade. Vega, a blockchain and decentralized exchange (DEX) that uses the Cosmos network infrastructure, is one of a number of crypto platforms focused on perpetual futures – a tool for speculating on future asset prices.
Vega’s new update expands its DEX app to accommodate prediction markets, allowing users to bet on the outcomes of future events just as they can currently bet on future token prices.
At least initially, Vega’s prediction market will differ from Polymarket’s in that it will be more of an open framework than a fully fleshed betting app. Vega will continue to look like a conventional decentralized crypto exchange: Users will be able to trade assets like normal, with the only difference being that some of those assets will now proxy as prediction bets.
Polymarket, by contrast, is a standalone app built on top of the Polygon blockchain ecosystem. It presents traders with a casino-style betting interface similar to that of Draft Kings or other internet betting platforms.
“The starting point here is we’re developing the protocol, building out the primitives, enabling this to be built,” explained Vega founder Barney Mannerings. “The people building on Vega and launching markets can kind of launch their own products with their own [user experience (UX)], and even bring in sports, news or whatever.”
While bet-on-anything apps have their detractors, Vega’s upgrade underscores the increasing enthusiasm around prediction markets as a potential breakout use case for blockchain technology.
“I wouldn’t be surprised at a – especially if prediction markets take off – if you don’t find some of the other DEXs that are offering perpetual or futures to start doing this, because it just seems to make sense to me,” said Mannerings.
