Ethereum co-founder Vitalik Buterin stated that the prediction market industry is gradually drifting away from its original mission and increasingly resembles a speculative marketplace. He believes that excessive focus on short-term bets from cryptocurrency prices to sporting events makes the sector dependent on momentary hype rather than long-term social benefit.

Buterin noted that the ecosystem is essentially built on an imbalance between informed participants and those who lose money due to a lack of knowledge. He claims that retail investors bear the brunt of these losses. This model, the developer believes, creates an environment that incentivizes impulsive trading rather than sound analysis. While he doesn't consider profiting from erroneous predictions immoral per se, the excessive reliance on participants' ignorance appears to be a systemic problem.

As an alternative, Buterin proposed rethinking the architecture of prediction markets. He envisioned them serving as a hedging function, tied to price indices for goods and services in different regions. Users, using local language models, would be able to create personalized betting portfolios that would offset rising prices for the goods they need. This approach would transform prediction markets into a tool for financial protection, rather than a platform for gambling.

Buterin suggested the possibility of denominating such markets in income-producing assets instead of traditional stablecoins. This could potentially reduce the crypto industry's dependence on fiat currencies and the dollar as a unit of account. He has previously emphasized that stablecoins should be oriented not toward individual national currencies, but toward broader market indices.