"Prediction Market" Breakthrough Moment: Why Are Giants Competing for Pricing Uncertainty?

When was the last time you heard about a billion-dollar funding round for Web3?

On October 7, 2025, the prediction market Polymarket officially announced that the parent company of the New York Stock Exchange, Intercontinental Exchange (ICE), will make a strategic investment of $2 billion, with a post-investment valuation reaching $9 billion. This is not only one of the highest funding amounts obtained by projects in the Web3 field in recent years but also elevates the potential and popularity of prediction markets to the center stage.

Interestingly, recently, whether it is decentralized players like Hyperliquid joining the new game or compliant latecomers represented by Kalshi accelerating their efforts, this competition is visibly speeding up.

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

From Polymarket to Kalshi, blooming in multiple places

Decentralized prediction markets have always been one of the important practical tracks in the early applications of blockchain. For example, I frequently saw examples of early players like Augur in many popular science books years ago—whether it's elections, weather, inflation, sports, or IPOs, users can directly trade "yes/no" contracts in a decentralized manner.

However, in reality, although the concept was proposed early on, it wasn't until the emergence of Polymarket that this concept truly broke through its boundaries, and this was largely boosted by the 2024 U.S. presidential election.

In the context where traditional polls generally lean towards one side, Polymarket ultimately demonstrated that this decentralized prediction market, which uses "real money" for voting, has extremely high value as a reference for observing market trends with its precise predictions and verifiable price signals that surpass polls.

This has also led to Polymarket frequently becoming a reference source for probability cited by mainstream media in various events over the past six months. However, the prediction market has been struggling under the constraints of compliance. For example, in 2022, Polymarket was fined $1.4 million by the Commodity Futures Trading Commission (CFTC) for operating an unregistered derivatives market and was prohibited from providing services to U.S. users.

In the past two years, Kalshi, which was established even earlier than Polymarket, has emerged as a standout by choosing a compliance-focused path—becoming the first prediction market platform regulated by the U.S. Commodity Futures Trading Commission (CFTC). Additionally, in October 2024, a federal court ruled that it was permitted to launch the first regulated election market in the U.S., further solidifying Kalshi's regulatory status.

Source: polymarketanalytics

As of October 10, 2025, based on the comparison of data from Polymarket and Kalshi, aside from the total trading volume where Polymarket significantly outperformed with $1.3 billion vs $410 million, Polymarket has fallen behind Kalshi in terms of the number of markets (10,200 vs 43,500) and the open contract volume ($170 million vs $240 million).

It is worth noting that in order to re-enter the U.S. market, Polymarket has actually adopted a compliance integration strategy this year: as early as July, it acquired the trading platform QCX LLC, which holds a CFTC license, for $112 million and has begun self-certifying event contracts, including sports events and election markets.

This is likely also related to the recent massive funding of 2 billion dollars, and Polymarket CEO Shayne Coplan tweeted with the POLY symbol on October 9, which could become a key variable in the competition between the two giants.

From prediction markets to a larger parent set

Many people may wonder why ICE, the parent company of the New York Stock Exchange, would place a massive bet of $2 billion on Polymarket.

This requires stepping out of Web3 and understanding the prediction market from a larger financial mother set.

First of all, ICE has been actively laying out in the crypto field for many years, including the layout of cryptocurrency financial products through its parent company and multiple affiliated entities, covering targets such as Bitcoin spot and futures contracts, as well as the well-known cryptocurrency trading platform Bakkt.

Secondly, prediction markets are essentially a subset of "trading platforms," or another form of presentation, for example, Polymarket has many price prediction bets on mainstream crypto assets like BTC and ETH at different time points such as the end of October and the end of the year.

Theoretically, if we infinitely subdivide the time points for realizing predictions, from the end of the year to the present moment, then to 1 minute later, and 1 second later, this essentially becomes an instant "bet" (buying and selling behavior) on the trading platform. What ICE values may be precisely this ability to finance all uncertainties, which can expand the boundaries of existing futures, options, and other derivatives markets.

Therefore, platforms like Polymarket with a massive 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 is not focused on a single application, but rather betting on the potential of predicting market "derivatizing everything" uncertainties.

For this reason, in addition to the competition from Polymarket and Kalshi, which resemble a specialized path in event markets, decentralized players like Hyperliquid are also exploring a hybrid approach of integrating prediction modules at the entrance of high-performance contract platforms. Each of these two paths has its advantages and disadvantages, but they may complement or compete with each other in the future.

Hyperliquid as a new variable for decentralized players

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

In short, HIP-3 allows for the permissionless creation and launch of any asset's derivatives market on Hyperliquid, which completely breaks the limitation that past Perp DEXs could only trade mainstream cryptocurrencies (for further reading, see "The 'Singularity Moment' of Perp DEX: Why Hyperliquid Can Kick Open the Door to On-Chain Derivatives?").

This not only means an open contract deployment mechanism but also lays the 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 lower interest rates at the next meeting?"
• "Will BTC break 70,000 USD this week?"
• "Will Arbitrum TVL exceed Base by the end of the month?"

In this architecture, the prediction market is no longer an independent track, but rather a submodule within the on-chain high-performance derivatives system. Due to its reuse of Hyperliquid's matching depth, clearing system, and order book logic, it inherently possesses higher trading efficiency and capital utilization.

In contrast, Polymarket's model is more focused on "event trading", while Hyperliquid's model is more focused on "price trading"—one starts from information, the other from structure, yet both point to the same ultimate goal: to have the probabilities of the future priced in real time by the market.

Written at the end

Overall, with the involvement of heavyweight decentralized players like Hyperliquid and the $2 billion investment from ICE as key points, the prediction market is no longer just a small tool for people to "bet" or "predict the future," but has become a forward outpost 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 highly liquid financial derivatives market, becoming an indispensable financial primitive in the DeFi infrastructure.