Prediction market "Old Cannon" recounts ten years of evolution: from Augur's "innovation theater" to Polymarket's practical breakthroughs.

Augur is one of the earliest prediction markets in the cryptocurrency space, and Joey is a co-founder. From this perspective, he should be one of the people most affected by the changes in the prediction market. Let's see how he views the changes in the prediction market:

In a recent interview, he shared about the failures and successes of prediction markets:

He believes that Augur faced three major problems in its early stages: low liquidity, poor user experience, and regulatory uncertainty, which ultimately led to a failure to achieve timely matching of products and markets. At the same time, he believes that Augur has demonstrated the potential of encryption-native innovation, but it has also exposed the gap between concept and practicality: what was built 10 years ago was “innovation theater,” and now the focus needs to be on real demand.

He believes that the lesson to be learned is that prediction markets need to address the “oracle problem” (real-world data input) and user barriers, rather than relying solely on the concept of decentralization; furthermore, founders should avoid “premature decentralization” and first build a centralized prototype to test the market before going on-chain.

Today, Joey believes that the breakthrough of Polyamarket is mainly due to its real-time event predictions (such as elections and sports) and high liquidity design, which attracts non-encryption users. For example, it aggregates information more accurately than traditional polls, and the surge in trading volume during the 2024 U.S. presidential election proves its value as an “information market.”

When talking about whether prediction markets are just gambling, his view is that prediction markets are no longer just niche gambling, but a risk hedging tool. For example, companies can use it for supply chain forecasting, transcending the stereotype of “just gambling.”

This marks the shift of encryption from speculation to practicality. Similar to the stock market, prediction markets involve speculation, but the core is information discovery. Joey believes that if regulators view it as pure gambling, they will miss out on economic benefits.

In the future, the United States may require prediction markets to comply with KYC/AML regulations, limiting anonymous transactions; the EU and Asian policies are more friendly, but the US leads global standards. Regulation is a double-edged sword; on one hand, clarity will attract institutions, but excessive regulation (such as banning bets on certain types of events) could stifle innovation. He suggests that prediction market projects actively cooperate with regulators to avoid a “confrontational model.”