Prediction markets saw 4x volume growth in 2025, CertiK reports

Top-rated prediction markets by Skynet score. Source: CertiKGrowth amid rising security and regulatory risks

The report notes that rapid expansion has also brought heightened risks. In December 2025, a third-party authentication provider used by Polymarket was compromised, highlighting how hybrid Web2/Web3 architectures can introduce centralized vulnerabilities even when underlying smart contracts remain secure.

CertiK also points to ongoing risks faced by on-chain platforms, including oracle manipulation, administrative key exposure, and front-running attacks.

Research cited in the report estimates that artificial trading volume reached as high as 60% on certain platforms during peak airdrop-driven incentive periods, distorting liquidity signals and activity metrics. Despite this, CertiK states that probability outputs across major platforms generally remained reliable for forecasting outcomes.

On the regulatory front, the report references Kalshis successful challenge before the U.S. Commodity Futures Trading Commission (CFTC), which led to prediction markets being recognized as legal financial products at the federal level in the United States.

At the same time, several European Union countries have banned Polymarket as unauthorized gambling, while emerging state-level restrictions in the U.S. could create a fragmented compliance landscape.

Looking ahead to 2026, CertiK identifies prediction markets as evolving infrastructure for pricing uncertainty across various domains. The report anticipates that additional jurisdictions will formally establish regulatory frameworks for prediction markets, privacy-focused technical improvements will accelerate, and institutional participation will continue to expand.