Right now, prediction markets look like degen toys. Low liquidity, half-baked products, random bets on Polymarket. But don’t be fooled, once the rails are built, these markets will become the most important sensors of the financial machine that runs the world.

The Market as an Autonomous Entity

My view of the market is influenced by Nick Land’s perspective: the market as an autonomous entity, without a clearly defined goal, yet with the undeniable drive to expand itself. This expansion happens by making the exchange of information increasingly efficient, and by constantly refining coordination among participants.

When people speak about hyperfinancialization, it should not be seen as an artificial trend but rather as a natural consequence of the growth of this external entity. I don’t want to make this too abstract, because my belief is simple: markets are an emergent property of human society. From the moment early humans started trading goods instead of covering all their needs alone, a new dynamic was born. The market was not “invented,” it emerged as a superior way of living together.

Prediction Markets as the Sensors of Reality

Prediction markets are literally the act of putting a price on real-world information. If we continue with the idea of the market as an autonomous entity, then prediction markets become its sensory system. They are the receptors that connect this entity to the real world more directly than almost any other mechanism.

For example, if I see that Coca-Cola’s stock dropped 50% in a single day, the reasons could be countless: the U.S. market as a whole collapsed, the CEO was replaced by someone unpopular, a major lawsuit was lost, or maybe the company was banned from a large region. The point is that the price alone aggregates general perception of humanity about the idea or assets that the stock represents, not granular truth.

But if there were a prediction market on “Will Coca-Cola be banned in the United States by the end of this year?” trading at 99% yes, I now have information that is far more specific, actionable, and accurate. This is the difference: while stock prices reflect diffuse perception, prediction markets slice reality into sharp, testable questions.

The Death of the Insider

Why would anyone participate in a prediction market? One simple answer is that insiders can profit from it. For centuries, “insider” was a powerful term: those with privileged access to information could frontrun the rest of the world. Markets, in their primitive state, had blind spots, and insiders exploited them for immense profit at the expense of retail.

Memecoins today are an experimental ground where this dynamic is visible in its purest form. Information asymmetry creates inefficiencies, which allow some to become wildly rich while others are left rekt. This is not a bug of markets, it is a sign of their immaturity. But as markets mature, as information moves faster and becomes more efficiently priced in, the concept of “insider” fades away.

In the world we are heading into, “insider” will become an obsolete term. Perhaps we will call them arbitrageurs or something similar, but the classic notion of someone sitting on privileged information while the market sleeps is disappearing.

Polymarket and the Current Frontier

Right now, Polymarket is the leader in this space. They’ve not only built a strong product but also managed to capture attention beyond the crypto bubble. Their viral prediction events and clever marketing stunts, like the partnership with Retardio and even firing an intern publicly, prove they understand both attention and crypto culture. Still, much remains to be improved.

The biggest missing feature is permissionless event creation. Anyone should be able to create a market, not just propose it. This sounds simple but opens a complex set of implementation challenges. The central issue, as always, is liquidity. To long something, you need someone willing to short it. Creating a permissionless system where liquidity naturally balances is an unsolved puzzle.

PumpFun solved a similar problem for low-cap tokens by introducing virtual liquidity pools through bonding curves. Whoever figures out a similar mechanism for prediction markets, will unlock a massive breakthrough.

And this is not only about solving liquidity. Such a mechanism creates a growth loop. Every time someone creates a new event, they promote it, just as PumpFun creators promote their tokens. Incentives align perfectly when creators also receive fees. Suddenly, markets scale not only in depth but also in breadth, with countless new questions priced in parallel.

The Problem of Resolution

Even with liquidity solved, another massive problem remains: resolution. Who decides the outcome of an event? This is one of Polymarket’s biggest weaknesses and the main reason why many potential participants hesitate to commit serious capital. If resolution is not 100% reliable, the market loses its credibility.

The logic is clear: the resolver must be impartial, with aligned incentives to reveal the truth. But how? There are several possibilities:

• A trusted individual with recognized expertise or integrity.

• A panel of experts coordinated by game-theoretic incentives, similar to how Kleros operates.

• An official trusted institution dedicated to a niche, like the NBA publishing results of its games.

In the same way that multiple memecoins launch around every cultural event but only one eventually captures liquidity, we can imagine a future where multiple prediction markets exist around the same event. The one with the most trusted resolver, or simply the first to launch, might dominate and absorb all liquidity.

The Question of Leverage

Another frontier is leverage. This is notoriously difficult in illiquid assets, and past attempts in areas like memes have failed. But leverage is fundamental for deepening hyperfinancialization. I don’t know exactly how it will be implemented in prediction markets, since resolution itself implies liquidations other complex dynamics, but it seems inevitable that someone will figure it out.

Final Thoughts

Let me be clear: I don’t necessarily want to build this myself. I’m not sure I feel comfortable creating something that accelerates hyperfinancialization directly. But whether we like it or not, this path is inevitable. My role here is not moral judgment but observation, analysis, and perhaps a bit of speculation.

As someone who enjoys onchain products, it is an exciting exercise to imagine what a fully developed prediction market ecosystem could look like. The answers to liquidity, resolution, and leverage are not just technical upgrades, they are the keys to turning markets into full sensory systems for reality itself. And once that happens, prediction markets won’t just reflect the world, they will become the battleground where truth itself gets priced.