Vitalik Buterin Defends Polymarket, Rejects Gambling Label and Praises Its Potential
Buterin said that putting Polymarket into the category of "gambling" is a big misunderstanding. (Photo by Bernard Annebicque/Sygma/Sygma via Getty Images)
Key Takeaways
- Online crypto prediction platform Polymarket has found a new ally in Ethereum co-founder Vitalik Buterin.
- Buterin said putting Polymarket’s likes in the gambling category is a big mistake.
- Despite a US ban, the volume of trades of betting platforms like Polymarket has grown by 3X.
Ethereum co-founder Vitalik Buterin, a big-time privacy advocate, has backed Polymarket, a crypto prediction platform.
During his recent interaction on X, Buterin said that putting Polymarket into the category of “gambling” is a massive misunderstanding. He added that the Polymarket falls under the prediction market category and often acts as a tool for the common public to learn about certain social events without the bias of today’s legacy media.
Vitalik Says Polymarket Is a Social Epistemic Tool
Talking about the importance of prediction markets, Buterin added that these applications act as social Epistemic tools that help the common public see how critical certain events are. He added that these tools are less vulnerable to biased editorial opinion than social media or news websites.
Epistemic tools refer to objects and artefacts used in knowledge production. Similarly, social epistemology tools refer to the tools that help a society learn and acquire knowledge about certain events.
Buterin was responding to a comment about his views on decentralized finance and how he has been critical of many DeFi protocols while promoting “gambling/prediction markets like Polymarket and a centralized stablecoin like USDC.”
Polymarket Growth Amid Regulatory Scrutiny
Polymarket is a crypto-prediction platform that allows users to bet on specific events and their possible outcomes. Some of the most popular prediction events include the U.S. presidential elections 2024, the popular vote, RFK Jr.’s endorsement of Trump, Fed Interest rate hikes and more.
The crypto prediction platform has grown exponentially over the past few months and has become a prominent place for United States election betting. The platform’s trading volume surged from a mere $63 million in May to over $1 billion in August.
Over $700 million worth of bets have been placed on the U.S. presidential election, followed by the popular vote winner, with over $150 million in betting volume. The recent arrest of Telegram founder Pavel Durov also gained much traction over the weekend, with over $90,000 in bets placed on Durov’s possible release in August.
The rise in popularity and trading volumes, however, has come at a cost of heavy regulatory scrutiny. The platform has been under the regulatory radar of the U.S. Commodity Futures Trading Commission (CFTC) since 2022, which fined the platform a penalty of $1.4 million in 2022.
Elizabeth Warren Calls For a Ban
Anti-crypto lawmakers Elizabeth Warren and Senator Jeff Merkley launched a campaign to ban access to prediction and betting platforms like Polymarket. Although Polymarket is not mentioned directly, its tremendous success and popularity are a crucial reason behind the Democratic legislature’s move.
However, it is essential to note that Polymarket has already been banned for US citizens since the CFTC’s 2022 penalty. However, in this day and age of technology, users always find a way to circumvent such bans.
Another report from DeFi Lama, a DeFi data aggregator platform, revealed that despite a ban on such prediction platforms, the volume of such platforms has tripled.
A Bloomberg report from Aug. 1 revealed that several users, on condition of anonymity, have been actively using the betting platform despite a ban on US citizens’ use.
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