Hashed Open Research Calls Prediction Markets Next Information Infrastructure, Urges Policy Debate

Hashed Open Research, the think tank of blockchain, artificial intelligence and content-focused venture capital firm Hashed, said June 16 that it had published a report analyzing the state of prediction markets and the challenges they face.

The report, titled "The Emergence of Blockchain-Based Prediction Markets and Immediate Challenges," said blockchain-based prediction markets tied to future events in politics, economics and sports are developing beyond simple betting platforms into a new information infrastructure. It added that prediction markets emerged as a key topic for global capital markets and the media industry during the U.S. presidential election, with growing attention on their role in information production and price discovery through collective intelligence.

According to HOR, combined monthly trading volume on leading prediction market platforms Polymarket and Kalshi reached $10 billion in November 2025. The report also found broader participation by traditional finance and media companies, including Intercontinental Exchange, the parent of the New York Stock Exchange, and social media platform X.

The report said prediction market prices do not always reflect objective truth. HOR analyzed 48,664 Polymarket markets closed as of Feb. 7 and found that the average error based on prices seven days before resolution was 4.1 percentage points.

In the 40% to 60% probability range, where outcomes were hardest to predict, the average error widened to 6.0 percentage points. The analysis also found a tendency to overstate actual probabilities.

The report also flagged concentration of decision-making authority in market operations as a key risk. Major dispute-resolution protocols such as UMA and Kleros use token-holder voting, which can concentrate voting power among a small number of large holders, creating a risk of manipulated rulings through vote-buying or bribery attacks.

HOR said the global regulatory environment is also shifting. In the U.S., there is a push to recognize prediction markets as legal financial products. In South Korea, their legal status remains unclear because gambling laws, the Capital Markets Act and the Game Industry Promotion Act may all apply.

A HOR official said prediction markets are not simply financial products or gambling, but a new data and market infrastructure linked to the information, finance and media industries. The official added that they could play a bigger role in social decision-making and information aggregation, and said broader social review and institutional experimentation are needed to determine whether prediction markets can function as true information infrastructure.