Photo credit: Chet Strange/Bloomberg

Vitalik Buterin, co-founder of Ethereum, recently claimed that putting prediction markets like Polymarket in the “gambling” category is a “misunderstanding of what prediction markets are or why people (including economists and policy intellectuals) are excited about them.”

Buterin further explained that prediction markets are a “social epistemic tool,” allowing the public to view certain events' importance and what might happen. He mentioned that prediction markets are “much less vulnerable to biased editorial opinions than social media or news websites.”

Ethereum's co-founder explained the importance of prediction markets, saying: 

“Conditional prediction markets have applications in governance, which we're starting to see already.” 

Despite Buterin’s explanation, the crypto community criticized the Ethereum co-founder’s stance on prediction markets, especially Polymarket. Some X users still believe that it is very much like gambling. 

O.LAB, a self-proclaimed decentralized prediction market, claimed that Polymarket is not completely decentralized or permissionless. They pointed out that Polymarket is “centrally operated” by the team, similar to a casino business. 

Commenting on what an ideal prediction market should consist of, O.LAB said that it should consist of a completely decentralized infrastructure and governance with an ethics committee. 

Buterin’s discussion on prediction markets began when an X user under the pseudonym of “Millie” accused the Ethereum co-founder and Ethereum Foundation of disliking DeFi. Trying to understand from the Ethereum co-founder’s viewpoint, Millie claimed that Buterin might be a “purist,” believing that DeFi is only when it has no reliance on trusted oracles and multsigs. 

Furthermore, Millie claimed that it is almost ironic that Buterin would “shill” stablecoin like USDC and “ask for less DeFi in the same breath.”

In response to Millie’s accusations, Buterin mentioned that he prefers applications that are useful in a sustainable way while maintaining principles such as permissionlessness and decentralization.

Although Buterin claimed decentralized stablecoins are great, the Ethereum co-founder said USDC is practically convenient and used by a lot of people. Buterin further explained, “If we get lots of people using USDC, that creates a situation where it becomes easier for people to move to other more decentralized stablecoins too.”

Another X user, “strobie reeeee,” joined the conversation, claiming that people are confused about Buterin’s stance on DeFi due to miscommunication. When the same X categorized prediction markets as “gambling,” Buterin responded by sharing his opinion about the prediction market.