Vitalik Buterin Changes Stance on Prediction Markets, Warns of ‘Cursed’ Slide into ‘Corposlop’

Ethereum co-founder Vitalik Buterin warns that prediction markets are drifting toward low-value gambling rather than long-term utility. He argues that excessive reliance on such activity creates what he calls a “fundamentally ‘cursed’” dynamic.

“Prediction markets seem to be over-converging to an unhealthy product market fit: embracing short-term cryptocurrency price bets, sports betting, and other similar things that have dopamine value but not any kind of long-term fulfillment or societal information value,” Buterin wrote.

He described this slide toward low-value, high-volume betting as “corposlop,” a term he uses to describe platforms that focus on mass-market, addictive gambling products instead of substantive, socially beneficial financial tools.

Recently I have been starting to worry about the state of prediction markets, in their current form. They have achieved a certain level of success: market volume is high enough to make meaningful bets and have a full-time job as a trader, and they often prove useful as a…

— vitalik.eth (@VitalikButerin) February 14, 2026

Notably, in December 2025, he described participation in prediction markets as “healthier” than in traditional markets and argued that concerns around prediction markets were exaggerated and that these markets represented a more truth-seeking alternative to traditional finance.

A Pivot Toward Generalized Hedging

Buterin proposes that, rather than relying on the current model dominated by short-term betting, prediction markets could evolve into highly personalized hedging tools.

By allowing individuals to hold assets like stocks or ETH for growth and then use prediction market positions to achieve stability, prediction markets could potentially replace the need for fiat-backed stablecoins.

“We do not need fiat currency at all!” he wrote. “People can hold stocks, ETH, or whatever else to grow wealth, and personalized prediction market shares when they want stability.”

Buterin suggests prediction markets evolve into generalized hedging utilities, offering insurance-like functions rather than mere speculative entertainment.

A Strategic Dilemma for the Industry

Buterin’s recalibrated position arrives as prediction markets experience rapid growth and increased institutional investment; platforms including Kalshi and Polymarket now command multi-billion dollar valuations, while major players like Jump Trading and Coinbase stake significant claims.

His comments point to a structural dilemma for the industry: a choice between competing product equilibria – one driven by short-term engagement and transactional volume, and another by long-term hedging and utility.

For existing platforms that thrive on sports and crypto bets, a successful pivot requires realigning incentives rather than abandoning basic models.

This article was written by Tanya Chepkova at www.financemagnates.com.

Source link