Vitalik Buterin defended prediction markets against ethical criticism in heated exchanges with industry figures who argue betting on real-world deaths explains crypto’s mainstream reputation problem. Buterin positioned prediction markets as superior truth-seeking mechanisms compared to social media platforms. The debate erupted when Quilibrium founder Cassie Heart challenged the morality of platforms allowing users to bet on conflict outcomes. “I don’t know fam but if you ask me the idea of gambling on whether a bunch of people are going to die is why this industry is hated by the majority,” Heart wrote.
Buterin acknowledged theoretical risks that prediction markets could incentivize harmful behavior. However, he dismissed concerns for small-scale markets covering large-scale events. The Ethereum founder compared prediction markets to traditional stock markets, noting political actors could profit from disasters by shorting stocks with far higher trading volumes. Buterin contrasted prediction markets with social media, where users make claims like “THIS WAR WILL DEFINITELY HAPPEN” without financial accountability.
He shared personal experiences using Polymarket to calibrate emotional responses to alarming news headlines. “I can personally report a few times reading a news headline, feeling scared, then checking polymarket prices and feeling calmer,” Buterin wrote. The founder argued bounded pricing between zero and one reduces reflexivity effects and pump-and-dump behavior common in traditional markets. Heart escalated criticism with provocative scenarios suggesting prediction markets could incentivize violence to influence outcomes. Polymarket recently launched in the United States in early December 2025 after nearly three years of regulatory prohibition.
Polymarket recently launched in the United States in early December 2025 after nearly three years of regulatory prohibition. Vitalik Buterin has defended prediction markets as tools for clearer truth-seeking signals compared with social media platforms. He argues these markets provide accountability and a more measured way to gauge public sentiment around real-world events, challenging the notion that betting on outcomes undermines credibility in crypto discourse. Buterin acknowledges theoretical risks that prediction markets could incentivize harmful behavior but suggests the concerns are less pressing for smaller markets covering large-scale events.
He draws parallels to traditional stock markets, noting that political actors could profit from disasters by shorting heavily traded assets, thereby introducing financial incentives that can reflect real-world probabilities. He contrasts prediction markets with social media claims, which often spread headlines without financial accountability. The discussion also touches on how pricing models—bounded between zero and one—can reduce reflexivity and pump-and-dump dynamics seen in other markets, though critics still raise questions about impact and ethics.
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