Prediction markets sound great, claiming to make price mechanisms more efficient and rational. But the reality may not be so ideal.

Upon closer inspection, the liquidity in these prediction markets is actually sustained by subsidies. Without market maker incentives, no one would provide liquidity. Moreover, the distribution of liquidity is quite uneven—events that are easier to model and bet on are truly where the capital converges. Those complex, hard-to-quantify events? Basically ignored.

What's more interesting is that "probabilizing" prices sounds scientific, but it doesn't change traders' speculative nature. Whether to hype or to bet, they still do what they do. Where does the capital flow? Often concentrated in the near-settlement time window or in assets with particularly thin order books. This creates a strange phenomenon—on the surface, it looks like a rational probability market, but in practice, it's more like an upgraded casino, just using different tools.

Industry thinkers like Vitalik have also reflected on this issue. Whether prediction markets are the future of financial innovation or just an upgraded speculative tool remains a topic worth deeper discussion.