Augur was one of the earliest prediction markets in the crypto space from the previous cycle, and Joey is a co-founder. From this perspective, he should be one of the people who feels the changes in prediction markets most deeply. Let's see how he views the evolution of prediction markets:
In a recent interview, he shared the failures and successes of prediction markets:
He believes that Augur initially faced three major issues: low liquidity, poor user experience, and regulatory uncertainty, which ultimately led to a failure to achieve timely product-market fit. At the same time, he thinks that Augur demonstrated the potential of crypto-native innovation but also exposed the gap from concept to practical application: the builds from 10 years ago were 'innovation theater,' and now the focus needs to be on real needs.
He believes the lessons learned are that prediction markets need to solve the 'oracle problem' (real-world data input) and user accessibility, rather than relying solely on decentralization ideals; additionally, founders should avoid 'decentralizing too early,' first building a centralized prototype to test the market before moving on-chain.
As for why Polymarket has achieved breakthroughs now, Joey attributes it mainly to real-time event prediction (such as elections and sports) and high-liquidity design, which attract non-crypto users. For example, it aggregates information more accurately than traditional polls, and the surge in trading volume during the 2024 U.S. elections proved its value as an 'information market.'
When discussing whether prediction markets are just gambling, his view is that prediction markets are no longer just niche gambling but tools for risk hedging. For instance, enterprises can use them for supply chain predictions, moving beyond the stereotype of 'just gambling.'
This marks a shift in crypto from speculation to utility. Similar to stock markets, prediction markets involve speculation, but their core is information discovery. Joey believes that if regulators view them as pure gambling, they will miss out on economic benefits.
In the future, the U.S. may require prediction markets to comply with KYC/AML, restricting anonymous trading; the EU and Asia have more friendly policies, but the U.S. dominates global standards. Regulation is a double-edged sword: on one hand, clarity will attract institutions, but excessive regulation (such as banning certain types of event betting) will stifle innovation. He advises prediction market projects to proactively collaborate with regulators and avoid an 'adversarial mode.'
