Skynet Report Warns of Structural Risks as VC Capital Floods Prediction Market Startups

According to the Skynet Prediction Markets Report, prediction markets crossed decisively into the mainstream in 2025, with annual buying and selling quantity rising fourfold. A small group of dominant platforms now controls the bulk of international exercise.

Kalshi ranks first in Skynet’s 2026 platform evaluation with a rating of 90.72 (AA), adopted carefully by Polymarket at 89.88 (AA), and Opinion at 89.02 (AA).
The consolidation aligns with capital flows. As reported by Forbes, Kalshi and Polymarket had been valued at $11 billion and $9 billion, respectively, after main funding rounds in 2025. Venture buyers deployed $3.7 billion into the class final 12 months, minting a number of billionaire founders. It additionally attracted top-tier companies, together with Sequoia Capital and Intercontinental Exchange.

Chemistry managing associate Mark Goldberg informed Forbes that prediction markets might see buying and selling volumes develop “100x within the subsequent 5 years,” reflecting investor expectations of exponential enlargement.

Consolidation on the prime, strain beneath

Skynet’s central conclusion is that dominance is concentrating shortly. Kalshi, Polymarket, and Opinion now management the bulk of international quantity. But every of them is pursuing a definite mannequin: a federally regulated change, a crypto onchain venue, and a hybrid blockchain platform.

But the report is equally targeted on fragility. It highlights third-party infrastructure as a systemic weak spot, pointing to the December 2025 Magic.hyperlink authentication incident that affected Polymarket customers. Even when sensible contracts stay safe, hybrid Web2/Web3 architectures can introduce centralized failure factors.

Prediction markets reached $63.5B in 2025, marking 4x progress. But with scale got here new dangers: oracle exploits, admin key abuse, and Web2.5 infrastructure points.

How did Kalshi, Polymarket, and Opinion lead the pack?

Read the report to search out out 👇https://t.co/YC1KGDKAJe— CertiK (@CertiK) February 10, 2026

Oracle manipulation stays the first technical assault vector, in response to Skynet, since market decision mechanisms immediately management fund distribution. Administrative key controls and contract improve mechanisms persist throughout many decentralized platforms. This creates potential single factors of failure.

At the identical time, Skynet notes that wash buying and selling has inflated quantity metrics throughout the trade, with analysis estimating that synthetic exercise reached as high as 60% throughout peak airdrop farming durations. While chance outputs remained largely dependable, distorted liquidity indicators might undermine institutional confidence.

Venture capital sees a 100x alternative

The current Forbes report detailed how enterprise capital companies are aggressively backing prediction market startups. Many of them had been based by current faculty graduates, with $3.7 billion in recent capital flowing into the sector in 2025 alone.

“Prediction markets are transferring so shortly into the mainstream in a method the place I feel the quantity of cash being traded goes to go 100x within the subsequent 5 years,” stated Mark Goldberg, cofounder and managing associate of Chemistry, within the Forbes report.

Caitlin Pintavorn, a associate at crypto-focused enterprise agency Paradigm, informed Forbes that prediction markets have been “one of the most well-liked areas” attracting new founders over the previous 12 months.

The scale of capital concerned displays the valuations on the prime. Forbes reported that Kalshi was valued at $11 billion and Polymarket at $9 billion following current funding rounds. Both platforms reportedly rely Donald Trump Jr. as an investor, including political visibility to an already high-profile sector.

In January alone, merchants wagered greater than $10 billion throughout Kalshi and Polymarket, together with $550 million on the Super Bowl, in response to the Forbes piece.

VCs Are Throwing Money At Recent College Grads To Build Prediction Markets https://t.co/8xIauYqYEb
(📸: Taraneh Tajdini) pic.twitter.com/iV2l9juInk— Forbes (@Forbes) February 10, 2026

A brand new type of startups emerges

Unlike earlier prediction platforms targeted strictly on binary sure/no contracts, many new startups highlighted by Forbes are experimenting with new derivatives and information fashions.

New York-based Noise, backed by Paradigm, affords so-called “consideration markets” the place customers can go lengthy or quick on web tendencies quite than discrete occasion outcomes. “We felt that the binary choice query had exhausted itself in a method,” Noise cofounder Gabriel Perez Carafa informed Forbes.

Other startups are positioning prediction markets as hedging instruments quite than speculative venues. Pluto, based by 22-year-old Ronit Jain, goals to create markets round GPU prices for AI computing.

Jain described his imaginative and prescient as constructing a monetary layer to assist AI corporations hedge what he calls “arguably an important commodity of the subsequent 10 years.”

Even AI mannequin testing is coming into the combination. Arcada Labs makes use of prediction markets to judge how massive language fashions commerce on platforms like Kalshi, turning market efficiency right into a proxy for AI reasoning potential.

Momentum meets structural actuality

The enterprise narrative is one of acceleration and inevitability. As Forbes famous, regulation within the United States, following Kalshi’s authorized victory, has given buyers confidence that prediction markets can function as reputable monetary merchandise.

But Skynet’s report introduces a counterweight. Regulatory fragmentation persists globally, with a number of European Union nations banning Polymarket as unauthorized playing. Even throughout the US, state-level restrictions threaten to create a patchwork compliance regardless of federal readability.

The platforms that survive, Skynet argues, shall be these that may preserve liquidity throughout fragmented jurisdictions, exhibit institutional-grade safety infrastructure, and construct income fashions not depending on incentive-driven quantity.

On one aspect, enterprise capitalists are betting on 100x progress and throwing tens of millions at 22-year-old founders constructing the subsequent iteration of prediction markets. On the opposite hand, infrastructure analysts warn that oracle danger, admin key management, regulatory fragmentation, and synthetic quantity stay unresolved structural points.

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