- Prediction market trading volume quadrupled to roughly $63.5 billion in 2025.
- Academic research suggests nearly 60% of Polymarket volume stemmed from wash trading during incentive periods.
- CertiK warns that hybrid security models and expanding state-level regulation pose significant risks to sector stability.
According to a new report from blockchain security firm CertiK, prediction market trading volume jumped from $15.8 billion in 2024 to approximately $63.5 billion in 2025. This explosive growth has concentrated liquidity around a few dominant platforms, including Kalshi, Polymarket, and Opinion. However, much of this surge has been driven by incentives rather than steady organic demand.
CertiK cited academic research showing wash trading on Polymarket peaked near 60% of reported volume as traders farmed incentives. While this significantly inflated activity metrics, the firm claimed prediction prices have remained broadly reliable so far. Consequently, the key risk emerges if artificial trading begins to distort how prices are formed.
Meanwhile, the sector’s security architecture is struggling to keep pace with its rapid expansion. Hybrid Web2/Web3 designs create dual attack surfaces, as evidenced by a December 2025 incident where attackers exploited a flaw in a third-party login service used by Polymarket. This vulnerability allowed unauthorized account access despite secure smart contracts.
Looking ahead, CertiK warns that state-level regulatory fragmentation and questions about post-incentive sustainability will test the sector’s long-term health. The firm expects the current dominance of a few major platforms to persist, but growth will depend on navigating these complex challenges.
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