#PredictionMarkets Hit $63.5B but Face Sustainability Challenge, CertiK Reports


Annual trading volume across prediction markets reached $63.5 billion in 2025, up from $15.8 billion the previous year, according to #blockchain security firm CertiK. The fourfold expansion masks underlying concerns about artificial activity and platform security that could threaten sector stability.


Three platforms now dominate #liquidity distribution: Kalshi, Polymarket and Opinion. Growth has been fueled primarily by incentive programs and event-driven spikes rather than organic user demand, CertiK's Monday report states.


Academic research referenced in the analysis found that wash #trading peaked near 60% of Polymarket's reported volume during incentive periods. Traders executed circular transactions to farm rewards, inflating liquidity metrics without disrupting price accuracy on the platform.


CertiK told Decrypt that distinguishing between inflated volume and broken markets requires examining whether artificial trading alters price formation. Persistent cross-platform price gaps on identical events that arbitrage fails to close would indicate manipulation affecting probability discovery.


The security firm has not identified evidence that wash trading distorts prices at scale on major platforms. Market probabilities have remained generally reliable despite elevated artificial activity, though CertiK noted data limitations in its assessment.


Platform architectures present additional vulnerabilities as prediction markets scale. Hybrid Web2/Web3 designs expose systems to attack surfaces from both traditional and #blockchain infrastructure simultaneously, the report warns.

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February 10, 2026 at 8:21 PM
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