Vitalik Buterin, co-founder of Ethereum
“Predictive markets seem to be slipping more and more into an unhealthy pattern: they focus on short-term bets on cryptocurrency exchange rates, sports betting, and other things that provide only momentary dopamine but no long-term value or benefit to society,” the programmer wrote on the X network.
Buterin divided market participants into “smart traders” who profit from information and “losers” who absorb losses. To the second group he attributed mainly retail investors, writes forklog.com.
Dependent on these dynamics, platforms risk creating communities where uninformed trading is encouraged.
“There’s nothing fundamentally immoral about taking money from people with stupid opinions. But there is something fundamentally ‘damning’ about relying too heavily on it,” he noted.
AI personalization and the abandonment of stablecoins
To solve the problem, Buterin proposed a new architecture: prediction markets should become a hedging tool tied to price indices of goods and services by region.
The concept assumes that users will run local language models. Neural networks will analyze individual consumer habits and form a portfolio of bets that will compensate for rising prices of necessary goods.
The Ethereum co-founder also admitted that such markets could be denominated in income-generating assets. This would create the conditions for the complete abandonment of stablecoins tied to fiat currencies.
“We don’t need fiat currencies at all! People can hold stocks, ETH or whatever for wealth growth, and use personalized shares of prediction markets for stability,” he said.
