The "prediction market" breaks the circle: Why are giants competing for pricing uncertainty?

When was the last time you heard of a billion-dollar funding round for Web3? On October 7, 2025, the prediction market Polymarket officially announced that Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, would make a $2 billion strategic investment in it, with a post-money valuation of $9 billion. This is not only one of the highest funding amounts received by a Web3 project in recent years, but also puts the potential and popularity of prediction markets front and center. Interestingly, the recent race is visibly accelerating, whether with decentralized players like Hyperliquid joining the fray or compliant latecomers like Kalshi catching up.

What lies behind this is not only about who will dominate the future prediction market, but also about how to financialize all uncertainties in the real world.

From Polymarket to Kalshi, multiple applications are blooming

Decentralized prediction markets have always been one of the important practical tracks for early blockchain applications. For example, I frequently saw examples of early players like Augur in many popular science books going back many years. Whether it was elections, weather, inflation, sports, or IPOs, users could directly trade "yes/no" contracts on decentralized platforms.

But in fact, although the concept was proposed early, it was not until the emergence of Polymarket that this concept was truly broken out of the circle, and this was largely inseparable from the boost of the 2024 US presidential election:

In the context of traditional polls generally tending to one side, Polymarket ultimately proved that this decentralized prediction market that votes with "real money" has extremely high reference value for observing market trends with its accurate predictions and verifiable price signals that surpass polls. This has led to Polymarket becoming a frequent source of probability references cited by mainstream media in various events over the past six months. However, prediction markets have always struggled with compliance. For example, in 2022, Polymarket was fined $1.4 million by the U.S. Commodity Futures Trading Commission (CFTC) for operating an unregistered derivatives market and was banned from providing services to U.S. users. In the past two years, Kalshi, which was established earlier than Polymarket, has emerged as a rising star, choosing a path focused on compliance. It became the first prediction market platform regulated by the U.S. Commodity Futures Trading Commission (CFTC), and in October 2024, a federal court ruled that it was allowed to launch the first regulated election market in the United States, further solidifying Kalshi's regulatory position. Source: polymarketanalytics As of October 10, 2025, from the data comparison of Polymarket and Kalshi, in addition to the total trading volume of Polymarket with US$1.3 billion vs US$410 million, Polymarket has fallen behind Kalshi in terms of the number of markets (10,200 vs 43,500) and open interest (US$170 million vs US$240 million). It's worth noting that Polymarket has also adopted a compliance-focused strategy this year to re-enter the US market: as early as July, it acquired QCX LLC, a CFTC-licensed trading platform, for $112 million and has begun self-certifying event contracts, including those for sports and elections. This is likely a combination of its recent $2 billion funding round. Furthermore, Polymarket CEO Shayne Coplan also posted a tweet with the POLY symbol on October 9th, potentially becoming a key variable in the competition between the two major players.

From Prediction Markets to Larger Matrix

Many people may be curious why ICE, the parent company of the New York Stock Exchange, made a huge $2 billion bet on Polymarket?

This requires stepping beyond Web3 and understanding the prediction market from the perspective of the larger financial matrix. First, ICE has been actively investing in the crypto space, including through its parent company and multiple affiliated entities, which have been developing crypto financial products for years. These products include Bitcoin spot and futures contracts, as well as the well-known crypto trading platform Bakkt. Second, prediction markets are essentially a subset of "trading platforms," ​​or simply another form of presentation. For example, Polymarket offers numerous price predictions for mainstream crypto assets like BTC and ETH at various points in time, such as the end of October and the end of the year. Theoretically, if the timeframe for prediction fulfillment is infinitely subdivided, from the end of the year to the end of today, to one minute later, or one second later, this essentially becomes an instant "bet" (buying and selling behavior) on the trading platform. Perhaps ICE values ​​this ability to financialize all uncertainty, expanding the boundaries of existing derivatives markets like futures and options. Therefore, platforms like Polymarket, with their vast user base and trading volume, can serve as a key entry point for ICE Group's future structured financial products, institutional hedging tools, and information pricing services. In other words, ICE isn't focused on a single application; rather, it's betting on the potential of prediction markets to "derivative all" uncertainty.

For this reason, in addition to the competition between Polymarket and Kalshi, which is more like a specialized path for event markets, decentralized players such as Hyperliquid have also begun to explore a hybrid path of inserting prediction modules at the entrance of high-performance contract platforms. Both paths have their own advantages and disadvantages, but they may also complement or compete with each other in the future.

New variables for decentralized players such as Hyperliquid

For example, the HIP-3 proposal passed by Hyperliquid introduced a permissionless, developer-deployed perpetual contract market on the core infrastructure. Previously, only the core team could list trading pairs, but now any user who stakes 1 million HYPE can deploy their own market directly on the chain.

In short, HIP-3 allows the creation and listing of derivatives markets for any asset on Hyperliquid without permission, which completely breaks the limitation that Perp DEX can only trade mainstream cryptocurrencies in the past (Extended reading "perp DEX's "Singularity Moment": Hyperliquid Why can we kick open the door to on-chain derivatives? 》).

This not only means an open contract deployment mechanism, but also lays a technical foundation for subsequent prediction market modules. In the future on Hyperliquid, users may be able to directly trade such markets:

• "Will the Federal Reserve cut interest rates at its next meeting?"

• "Will BTC break through $70,000 this week?"

• "Will Arbitrum TVL exceed Base at the end of the month?"

Under this architecture, the prediction market is no longer an independent track, but a sub-module in the on-chain high-performance derivatives system, and because it reuses Hyperliquid Their matching depth, clearing system, and order book logic naturally offer higher trading efficiency and capital utilization.

In comparison, Polymarket's model leans more towards "event trading," while Hyperliquid's model leans more towards "price trading"—one starting from information, the other from structure, yet both aim for the same end goal: allowing future probabilities to be instantly priced by the market.

Final Note

Overall, with the entry of heavyweight decentralized players like Hyperliquid and ICE's $2 billion investment as key milestones, prediction markets have become more than just a tool for "betting" or "predicting the future." Instead, they have become a frontier for institutions, analysts, and even central banks to observe market sentiment. This also means that it is no longer just a paradise for speculators, but is rapidly transforming into a highly efficient and liquid financial derivatives market, becoming an indispensable financial primitive in DeFi infrastructure.