CertiK highlights growth and emerging risks shaping the prediction markets landscape.
Prediction markets experienced rapid growth in 2025, with annual trading volume increasing fourfold and activity consolidating around a small number of platforms, according to the 2026 Certik Skynet Prediction Markets Report.
Kalshi, Polymarket, and Opinion now account for the majority of global trading volume, each operating under different regulatory frameworks and technical architectures.
As per the report, between 2024 and 2025, prediction market volume jumped from $15.8 billion to $63.5 billion. User counts followed a similar trajectory.
Although overall network liquidity in prediction markets grew steadily, by mid-January BNB Chain had overtaken Polygon as the leading liquidity network, accounting for over a third of total volume.
Security Risks Intensify
However, the expansion also introduced new risks, with third-party infrastructure emerging as a key vulnerability.
In December 2025, Polymarket’s third-party authentication provider was breached, highlighting how hybrid Web2/Web3 systems can create single points of failure, even when the underlying smart contracts remain secure.
CertiK, Web3 security services provider, warns that on-chain platforms continue to face persistent threats, including oracle manipulation, administrative key vulnerabilities, and front-running.
Research cited in the report shows that during peak airdrop-driven incentive periods, up to 60% of trading volume on some platforms was artificial, distorting liquidity and market activity. Despite this, probability outputs across major platforms generally remained reliable for forecasting outcomes.
Regulation and Outlook
However, regulation will play a decisive role in which platforms survive and which markets can operate.
The legal landscape remains fragmented: prediction markets are recognized as legal financial products in some jurisdictions, banned as gambling in others, and undefined in many more.
In the U.S., Kalshi’s CFTC challenge confirmed federal legality, but state-level rules, such as New York’s ORACLE Act, could complicate compliance. Several EU countries have banned Polymarket as unauthorized gambling, while jurisdictions like Dubai, Singapore, and Hong Kong may provide clarity in the near term.
Platforms may face geo-blocking requirements or lobbying pressures as they navigate this patchwork of regulations, and EU gambling classifications could be challenged as platforms push for recognition as financial products.
Why This Matters
The rapid growth and consolidation of prediction markets, combined with security vulnerabilities and a fragmented global regulatory landscape, could reshape how financial risk and event outcomes are traded and forecasted worldwide.
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