Predicting the Market Super Cycle: From Gaming to the Awakening of the Internet Expectation Market

Written by: APRO Team

Prediction markets are humanity’s collective bets on uncertainty.

Prediction, one of humanity’s oldest economic and social activities, is undergoing a thorough reconstruction driven by the wave of blockchain technology, from the underlying logic to the superstructure. The prediction market track has never been closer to its pivotal moment; it is no longer just a DeFi branch or a compliant gambling platform, but an awakening super-asset market — Internet Expectation Market (IEM).

IEM is not simply a game, probability prediction, or a generalized gambling product. Its revolutionary significance lies in the first-time packaging of previously hard-to-standardize and hard-to-financialize event expectations (Expected Value, EV) into more systematic, circulating, tradable, hedgable, and composable financial products. This creates a new form of asset issuance that transcends traditional concepts like securities and tokens, turning humanity’s collective judgment of the future into an independent, globally tradable asset class.

1. Overview of Prediction Markets: 2 Super, 3 Strong, and 200+ Challengers

Prediction markets are entering a super cycle. According to Dune Analytics, the phenomenon-level explosion of prediction markets in 2025 is shifting into a rapid growth phase, with Polymarket and Kalshi as dual oligopolists plus several strong competitors on BSC, maintaining a stable pattern. By 2025, the total trading volume exceeds $40 billion, with multiple monthly peaks surpassing $10 billion, and weekly volumes still reaching tens of billions in early 2026. In mainstream prediction markets, trading activity related to political, macroeconomic, and social events strongly correlates with real-world event heat, validating its function as a “social sentiment barometer.” Future cross-chain prediction protocols, AI-enhanced prediction markets, and on-chain shared liquidity protocols are expected to participate.

Source: Public Data Compilation

According to PredictionIndex.xyz data, the total trading volume of prediction markets in 2025 reaches $50.25 billion, with both Polymarket and Kalshi exceeding $20 billion each. Starting from Q4 2025, prediction markets on BNB Chain, Base, and Solana have seen rapid growth, with Opinion’s daily trading volume since 2026 averaging around $20 million, approaching Polymarket and Kalshi.

Source: Dune.com

Beyond mainstream platforms, more small- and medium-sized, feature-rich new prediction markets are emerging. Rootdata has recorded over 200 prediction market projects, including 42.space, Predict.fun, and Bento in YZi Labs’ EASY Residency Season 2. APRO has summarized the current mainstream prediction markets:

Source: PredictionIndex.xyz

2. Prediction Markets Are Naturally Evolving Toward Information Pricing and Asset Issuance

Since 2025, the growth drivers of prediction markets have quietly shifted. The speculative nature is gradually transforming into a greater role in information pricing and non-standard asset issuance and trading. Prediction markets are migrating upward in the information dissemination chain.

3. Under the Boost of Crypto and AI, the Potential of Prediction Markets Is Still Significantly Underestimated

With explosive growth in trading volume and influxes of institutional and mainstream participants, prediction markets are gradually moving away from mere games or gambling toward a larger narrative — they are beginning to become the most powerful infrastructure for collective expectation consensus, truth discovery, information dissemination, and asset issuance in the Internet era — we call this the Internet Expectation Market (IEM).

The difference between IEM and traditional prediction markets is that IEM heavily relies on Crypto and AI, features decentralization, and possesses limitless scalability in depth and breadth. We envision a scenario where any user with a smart device and internet can create prediction markets for any event or expected outcome, and conduct permissionless, 24/7, peer-to-peer trading via Crypto.

Most people in the Internet era are mere spectators: observing macro data, elections, markets, others’ judgments, but rarely participating — expressing zero-cost opinions with no consequences, with viewpoints ultimately becoming noise. IEM will change this: opinions must be backed by real funds — anyone can directly participate in pricing and bear the consequences. More importantly, it revalues the on-site perception of ordinary people (barbers, drivers, workers) with real value: these intuitive insights, previously ignored and non-circulable, can now be created, traded, and settled. The “event expectation value” that was inaccessible to capital markets becomes an independent, new asset class.

Before the advent of cryptocurrencies and the AI wave, prediction markets already existed but were mostly centralized, experimental, or academic, such as Iowa Electronic Markets and Good Judgment Open. Limited by trust issues, regulatory barriers, low liquidity, and high operational costs, large-scale adoption was difficult. With Crypto and AI, IEM becomes a true “decentralized truth machine”: continuously producing high-value, tamper-proof data streams that provide reliable signals for insurance, derivatives, investment decisions, and DAO governance, supported by economic incentives. IEM can be expressed as two equations:

Equation 1: Prediction Market + Crypto + AI = Internet Expectation Market

In IEM, prediction markets heavily depend on AI and Crypto, creating a new form of asset issuance beyond securities, currencies, and tokens:

Prediction Market

Provides a price discovery mechanism through collective wisdom, allowing market prices to naturally converge based on the real beliefs and information of a vast number of participants, forming the closest approximation to truth.

Crypto

Enables decentralized circulation, hedging, and global participation, freeing expectation assets from geographical and institutional barriers, allowing anyone, anywhere, to trade, hedge risks, and participate in global event pricing instantly.

AI

Enhances long-tail event analysis and automation, rapidly transforming massive fragmented, unstructured, and marginalized uncertainties into tradable contracts, significantly reducing creation and settlement costs, and expanding event coverage in depth and scope.

Equation 2: Internet Expectation Market = Information Market + Risk Market + Gambling Market

IEM is a validation of prediction markets. Under the IEM framework, prediction markets will move beyond speculation, possessing the triple attributes of Information Market + Risk Market + Gambling Market:

(1) Information Market

The most profound aspect of IEM is its role as a distributed information aggregation and truth discovery mechanism. Prices dynamically reflect collective expectations of EV, and trading behavior itself is a process of information dissemination and verification. Informed actions cause sharp price fluctuations, often serving as early signals of truth.

In November 2025, Google announced a strategic partnership with Polymarket (and Kalshi), integrating Polymarket’s real-time odds and probabilities directly into Google Search and Google Finance. Users searching for “Will the US enter a recession in 2025?” or “2026 GDP growth forecast” can see implied market probabilities alongside traditional financial data through natural language queries. In January 2026, Polymarket reached an exclusive data-sharing agreement with Dow Jones (including The Wall Street Journal, Barron’s, MarketWatch, etc.). Media like WSJ will embed Polymarket’s real-time probability modules into digital platforms and some print editions, such as launching a “Market Implied Return Expectation Calendar,” directly showing collective expectations for company earnings, rather than relying solely on analyst opinions.

These events indicate that prediction markets are moving from fringe tools into mainstream information ecosystems. The world’s largest search engines and traditional financial media are beginning to treat “market prices” as authoritative signals of collective expectations, helping users more quickly uncover hidden truths. In the future, media will cite “prediction markets show…” to verify news, and individuals, enterprises, or nations may use these signals to assist governance and optimize strategic decisions. This attribute elevates IEM beyond financial tools, making it the most powerful collective intelligence system of the Internet age, with its trading evolving into more diverse forms.

(2) Risk Market

To professional players, IEM is a global, barrier-free risk hedging infrastructure. It encapsulates the expected outcomes of macroeconomic, geopolitical, climate, and technological uncertainties—originally difficult to standardize—into tradable, composable financial products, allowing users to trade and hedge instantly.

Modern platforms like Polymarket and Kalshi inherit and greatly amplify this attribute: through blockchain or CFTC regulatory frameworks, they enable frictionless access worldwide/US, allowing users to hedge complex risks such as Federal Reserve rate paths, geopolitical conflicts, climate disasters, AI regulation, corporate earnings surprises, and crypto price shocks. For example, some Bitcoin holders/miners trade markets like “Bitcoin Q1 2026 drops below X USD” or “Federal Reserve rate path” on Polymarket and Kalshi as a low-cost alternative to spot holdings, with more transparency and efficiency than traditional puts.

(3) Gambling Market

To ordinary users, prediction markets are the most accessible entry point into finance. High-profile events (elections, sports, entertainment) attract massive traffic, and users start from “playing around,” expressing personal expectations through buying and selling contracts. They present complex expectation assets in the most intuitive way, allowing retail participants to gradually understand the deep value of circulation, trading, hedging, and composability through entertainment.

For example, Polymarket partners with UFC, NHL, and other event prediction markets, integrating real-time odds and brand exposure into related digital platforms. Fans can buy and sell contracts like “Who KO’s in the next round,” experiencing the fun of “watching and trading,” turning passive viewing into active participation. This transforms entertainment betting into active engagement — fans learn price discovery logic while debating or following stars, often becoming “addicted” and expanding into sports markets.

4. What Infrastructure Does the Prediction Market Need Under the IEM Narrative?

Prediction machines, as the final piece of the Internet Expectation Market puzzle, will benefit from the prediction market super cycle.

In the Web2 era, prediction markets were limited by trust, regulation, and efficiency issues. Crypto and AI provide core support from the bottom up. Crypto’s decentralization, smart contract capabilities, and global stablecoin settlement, along with AI’s productivity leap, create an ideal technological and economic environment for prediction markets.

It’s important to note that public chains (like BNB Chain, Solana, Base, Ethereum), stablecoins (USDT/USDC/USD1/U), and DeFi composable suites are already highly mature. AI and DAOs are also continuously evolving to meet IEM development needs. However, the final critical piece—prediction machines—is still in rapid development.

The requirements for prediction machines in prediction markets differ significantly from those in DeFi or RWA sectors. They evolve from simple data transfer tools to “complex event verification and understanding engines” supporting the trustworthy settlement of expectation assets. The core evolution involves aggregating and understanding multi-source heterogeneous data (such as sports, macroeconomic indicators, news), and using LLMs and other technologies for semantic extraction and logical reasoning, transforming unstructured information into programmable contract conditions. The next-generation prediction machine will tend toward modular data service platforms, enabling rapid creation and reliable settlement of long-tail, sudden, and diverse events.

Core features needed for prediction machines to meet the rapid growth of IEM include:

• Sufficiently fast performance to meet real-time demands of rapidly changing markets (millisecond response, high throughput);
• Broad data coverage to support the increasing complexity of prediction market targets (multi-chain, multi-source, heterogeneous data);
• Deep integration with AI, capable of solving complex problems (using LLMs for semantic understanding, logical reasoning, and programmable transformation);
• High integration with the ecosystem (such as chains, DeFi composable suites), enabling modular data services, seamless integration, and composability.

In this context, many Web3 prediction machine projects are already demonstrating enhanced AI capabilities, shifting from simple price feeding tools to “complex event verification and understanding engines”—integrating millisecond response, multi-source heterogeneous data, AI semantic reasoning, logical judgment, programmable contract transformation, and high composability with DeFi and prediction ecosystems. By continuously expanding coverage in sports, macro, and event data, strengthening multi-layer AI verification, and modular services, it is expected that prediction machines will evolve from data providers into full-stack infrastructure supporting the trustworthy settlement of any event expectation assets, gradually filling the last piece of the IEM puzzle.