why prediction markets don't work

The discussion on Crypto Twitter about why prediction markets don’t work really captures the essence of the expectations gap between crypto core enthusiasts/leaders and the users (“the people”).

Crypto enthusiasts love the idea of prediction markets and the information efficiency they can bring to the world when done on an internet scale (Vitalik’s take’).

Yet, they seem to overlook that, at the moment, prediction markets are - (drum roll)

not fun.

We can label it differently (UX, etc.), but the truth is they’re just not as much fun right now. or perhaps it’s better said - they’re much less fun compared to other crypto activities.

For example:

• betting on hamster races on telegram - really fun
• swapping meme coins on uniswap - really fun
• flipping jpegs on blur - really fun
• betting on who will be the next president of Argentina - much less fun. maybe around 10%-15% fun level of the above activities.

In terms of contribution to the efficiency of society:

• betting on hamster races on telegram - zero contribution
• swapping meme coins on uniswap - zero contribution
• flipping jpegs on blur - zero contribution
• betting on the next president of Argentina - significant contribution to information efficiency

We need to bring the fun level of prediction markets closer to other activities. then, we’ll reach the ‘changing the world’ zone - lots of fun and significant contribution.