Ethereum (ETH) creator Vitalik Buterin isn’t dissuaded by the controversy surrounding the decentralized betting platform Polymarket.
The Polygon-based betting platform has sparked criticism for offering war markets related to the ongoing conflicts in the Middle East between Israel, Hezbollah and Hamas.
Markets like “Israeli forces enter Lebanon in September?” and “U.S. evacuates Beirut Embassy by October 31?” allow users to bet on the outcomes of geopolitical conflicts.
One X user argued that it “feels wrong that Polymarket has an entire Hezbollah betting section that makes a war look like a football game to bet on.”
Buterin, a Polymarket investor, pushed back against that opinion and declared his support for decentralized betting platforms, arguing that they have a purpose beyond the simple financialization of global events.
“The point of Polymarket is that from the perspective of traders, it’s a betting site, but from the perspective of viewers it’s a news site. There are all kinds of people (including elites) on Twitter and the internet making harmful and inaccurate predictions about conflicts, and being able to go and see if people with actual skin in the game think that something has a 2% chance or a 50% chance is a valuable feature that can help keep people sane.
It’s not about ‘make money from bad stuff happening,’ it’s about creating an environment where speech has consequences (so both unjustified fearmongering *and* unjustified complacency are punished), without relying on governmental or corporate censors.”
Zach Rynes, a community liaison for the decentralized oracle network Chainlink (LINK), then questioned whether Buterin would support an assassination market, which could incentivize a bettor to take violent action to influence an outcome.
The Ethereum creator responded, outlining his opposition to assassination markets.
“Augur from the beginning had an instruction for their oracles to vote invalid on any resolution for assassination markets. To me the dividing line is: is the market acting as a primary *incentive* for people to do bad things so they can insider-trade on them?”
However, Rynes countered that decentralized betting markets could also end up influencing other events if the wagers get big enough.
“It’s an extreme example, but any prediction market about an influenceable event will start to either incentivize action or subsidize the inevitable if sufficiently liquid enough, even if that wasn’t the original intention.
If these markets traded with $100 million+ liquidity, would that change the outcome? Maybe not, but if insider traded, would they not be subsidizing war?
I don’t think prediction markets are passive observers, their existence influences outcomes when operating at scale.”
Buterin conceded that point but argued Polymarket is currently “far away from that” scenario. He suggested the platform implement size-based soft-caps to prevent things like war incentivization.
“Perhaps have a fee that increases as the size approaches the max, and use 100% of fee revenues to subsidize socially valuable markets with very low ‘organic’ volume?”
Polymarket itself argues the point of its Middle East-related markets is “to harness the wisdom of the crowd to create accurate, unbiased forecasts for the most important events to society.”
“That ability is particularly invaluable in gut-wrenching times like today. After discussing with those directly affected by the attacks, who had dozens of questions, we realized that prediction markets could give them the answers they needed in ways TV news and Twitter could not.
Note: we are taking 0 fees on this and providing the service at a loss.”
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Follow us on X, Facebook and Telegram
Featured Image: Shutterstock/klyaksun/monkographic
Read the full article here
