Prediction markets are moving toward mainstream adoption, but they also reveal many issues.

Here's an interesting case: a leading prediction market platform once launched a "Pizza Index" to monitor foot traffic changes at pizza shops near the Pentagon. As a result, during a certain geopolitical event, the orders at these shops suddenly surged, and the platform immediately sounded the alarm.

It was later discovered that the entire military operation from decision to execution took only 1 hour and 22 minutes—that is, intelligence was leaked to the market in advance through some channel. Insiders used prediction market bets to profit quickly from asymmetric information.

What does this example illustrate? While prediction markets have a unique advantage in discovering the true price of information, they also become breeding grounds for insider trading. Data can very sensitively reflect market expectations, but conversely, powerful individuals can exploit information asymmetry to "cut leeks" here.

As prediction markets become more mainstream, such regulatory loopholes will become increasingly prominent. How to preserve market efficiency while preventing information abuse is a major challenge facing the entire industry.