What exactly is a prediction market? A single chart to help you understand quickly.

In simple terms, a prediction market is a platform that allows users to invest or trade based on their judgments about future events. From political elections and sports competitions to cryptocurrency market trends, almost any uncertain event can become a prediction target.

The core logic of prediction markets is straightforward: if you have an opinion on the outcome of an event, you can buy related prediction shares. When the event occurs, your shares become valuable; if it goes the other way, you incur a loss. The more market participants there are, the more accurate the price signals become, which is why prediction markets are considered effective tools for discovering true probabilities.

This sector has seen many innovative projects emerge. Some focus on native on-chain experiences, some specialize in specific sectors (like crypto or sports), and others innovate on liquidity mechanisms. Regardless, these projects are exploring new ways to drive information aggregation through economic incentives.

For users, participating in prediction markets is both a test of judgment and a source of profit. For the ecosystem, these applications enrich the dimensions of Web3 and push the boundaries of decentralized finance.