The following is a guest post by Nischal Shetty, founder of WazirX and Shardeum, highlighting the growing trend of cryptocurrency-based prediction markets and their potential impact on the financial landscape.
A recent incident on the crypto prediction platform Polymarket, where an anonymous trader made a significant profit from a bet on the exclusion of Nicolás Maduro from power, has brought attention to the increasing popularity of such markets. This event, along with others, demonstrates the rising interest in speculative markets, particularly those involving geopolitical outcomes and leveraged exposures. The controversy surrounding Polymarket’s refusal to process certain contracts has also raised questions about regulatory clarity and the need for more defined guidelines in the industry.
The Rise of Decentralized Perpetual Contracts
The year 2025 marked a significant shift in the cryptocurrency market, with the infrastructure for decentralized perpetual contracts evolving from niche experiments to mainstream infrastructure. Leading platforms have transitioned from general-purpose shared blockchains to purpose-built environments, resulting in improved execution, reduced latency, and increased liquidity. This transformation has enabled decentralized perpetrators to close the performance gap with centralized counterparts, making them more attractive to traders.
Advancements in Liquidity Design
Speed alone has not driven the adoption of decentralized perpetual contracts; rather, it is the improvements in liquidity design that have made a significant impact. Platforms have redesigned liquidity from the ground up, introducing internal matching systems, LP-backed pools, and yield-earning collateral, which have enhanced capital efficiency and user outcomes. These changes have led to sustained volume and reliable execution, making decentralized perpetrators more appealing to traders.
Mainstream Adoption and Sales
The most underrated change in 2025 was the integration of perpetual futures into products already used by users, such as wallets and messaging apps. This has broken down the barriers to entry, allowing users to trade with leverage from the same place where they store or communicate assets. As a result, there has been an increase in first-time leverage users, broadening the user base and expanding market participation.
Expansion of Wealth and Market Growth
The growth of decentralized perpetrators has not been limited to crypto-only offerings. Several platforms have expanded synthetic exposure to forex, commodities, and stocks, providing traders with 24/7 access to global markets and leverage not possible in traditional retail channels. This has created new demand, particularly in emerging markets where access to global derivatives is limited or expensive.
Regulatory Clarity and Reduced Existential Risk
Regulatory frameworks have played a crucial role in reducing uncertainty and existential risk in the industry. Clearer guidelines for stablecoins and settlement assets have increased institutional comfort, allowing them to experiment with decentralized perpetrators. However, the lack of regulatory oversight in certain jurisdictions, such as India, has raised concerns about the potential risks and need for more effective regulation.
Conclusion and Future Outlook
The convergence of mature infrastructure, improved liquidity models, mainstream sales, and reduced regulatory uncertainty has turned decentralized perpetrators into a reality. While the risks associated with embedded leverage and retail damage are significant, the potential benefits of increased market participation and access to global derivatives cannot be ignored. As the industry continues to evolve, it is essential for policymakers, financial institutions, and regulators to take notice and work towards creating a more comprehensive and effective regulatory framework.
Read the full article on Cryptoslate: https://cryptoslate.com/crypto-bets-on-war-go-mainstream/
