Vitalik Buterin wants to build ‘the next generation of finance’ – Here’s how

ambcryptoPublished on 2026-02-16Last updated on 2026-02-16

Abstract

Vitalik Buterin, co-founder of Ethereum, has raised concerns that prediction markets are straying from their original purpose of being useful tools for understanding events and managing risk. Instead, he observes a trend where these platforms are increasingly focused on facilitating short-term speculative bets—such as on cryptocurrency prices or sports—that generate quick profits but offer little lasting value. Buterin warns that this shift is partly driven by platforms seeking revenue during bear markets, often at the expense of inexperienced traders who frequently lose money. He advocates for a refocus towards helping investors hedge against real-world financial risks, which would be healthier and more valuable for the ecosystem.

Are prediction markets losing their original purpose? Ethereum [ETH] co-founder Vitalik Buterin worries that they’re becoming more about making quick money than being useful.

Here’s why.

The issue at hand

In a recent post on X, Buterin acknowledged that prediction markets can be useful, especially as tools that help people understand events and manage risk.

However, he warned that many are now dominated by short-term bets on crypto prices, sports, and other events that attract attention but offer little lasting value.

“My guess is that teams feel motivated to capitulate to these things because they bring in large revenue during a bear market where people are desperate...”

There’s a deeper issue as well. According to Buterin, many prediction markets rely on inexperienced traders who often lose money, which may be unhealthy for the ecosystem.

A better use would be helping investors hedge real risks.

So what’s the solution, really?

Related Questions

QWhat is Vitalik Buterin's main concern about current prediction markets according to the article?

AHe worries that prediction markets are becoming more about making quick money through short-term bets rather than serving their original purpose of being useful tools for understanding events and managing risk.

QWhich specific short-term bets did Buterin mention as dominating prediction markets?

AHe mentioned short-term bets on crypto prices, sports, and other attention-grabbing events that offer little lasting value.

QAccording to Buterin, what motivates teams to focus on these short-term speculative markets?

ATeams feel motivated to capitulate to these things because they bring in large revenue, especially during a bear market when people are desperate.

QWhat deeper issue does Buterin identify regarding the participants in these markets?

AHe identifies that many prediction markets rely on inexperienced traders who often lose money, which may be unhealthy for the ecosystem.

QWhat does Vitalik Buterin propose as a better use for prediction markets?

AHe suggests that a better use would be helping investors hedge real risks.

Related Reads

Kalshi-CFTC Fight In New Mexico Could Shape Prediction Market Rules

A jurisdictional battle between the U.S. Commodity Futures Trading Commission (CFTC) and the state of New Mexico over the regulation of prediction markets could set national rules for the industry. At issue is who polices platforms like Kalshi, with the CFTC asserting federal oversight and New Mexico arguing state gaming and consumer protection laws apply, especially for contracts resembling wagers on events like elections or sports. The outcome will determine if prediction markets can scale nationally under a clear federal framework or face a fragmented, state-by-state regulatory landscape. This dispute is significant for the crypto-adjacent trading community, which often engages with these speculative event markets. A clearer rulebook could boost mainstream adoption, liquidity, and integration with crypto infrastructure, while a state-led challenge could stifle growth. The case is particularly sensitive for sports-related contracts, where the line between financial markets and gambling blurs. Ultimately, this legal fight will shape whether prediction markets become a scalable national product or remain constrained by jurisdictional conflicts.

bitcoinist10m ago

Kalshi-CFTC Fight In New Mexico Could Shape Prediction Market Rules

bitcoinist10m ago

The Value Distribution of Stablecoins

**Summary: The Value Distribution of Stablecoins** The article argues that stablecoins are evolving from mere trading tools into broader channels for dollar access. It divides the stablecoin ecosystem into four layers to analyze how value is distributed: 1. **Issuance Layer:** Mints stablecoins, holds reserve assets, and captures the spread between reserve yield and user costs (e.g., Tether, Circle). This layer currently earns the largest profit margin. 2. **Infrastructure Layer:** Connects stablecoins to the traditional financial system, handling fiat on/off-ramps, banking integration, compliance (KYC/AML), and asset management (e.g., Bridge, BVNK). This is the "unglamorous" but critical work, building the essential bridges between crypto and real-world finance. 3. **Acquiring/Distribution Layer:** Integrates stablecoins into merchant systems, manages payment flows, and provides enterprise financial software (e.g., Stripe, Coinbase). They act as the access point for businesses. 4. **Application Layer:** The end-users and businesses that ultimately use stablecoins for payments, settlements, or as a store of value. They benefit from convenience but have little pricing power. The core thesis is that while the issuance layer currently dominates profits, the often-overlooked **infrastructure layer holds significant long-term potential**. The real challenge and barrier to mass adoption is not the on-chain transfer of stablecoins (which is simple), but the complex "last mile" integration into existing business workflows, banking systems, and regulatory frameworks across different countries. Companies in this layer are currently in a "land grab" phase, investing heavily to build networks, secure bank partnerships, and establish compliance pathways. While their position is currently pressured by the profitable issuers above and distribution platforms below, the article suggests that if stablecoins become a default financial rail for businesses, the infrastructure providers who have done the hard work of integration will ultimately gain strong pricing power and become entrenched, essential players.

marsbit5h ago

The Value Distribution of Stablecoins

marsbit5h ago

The Value Distribution of Stablecoins

The Value Distribution of Stablecoins The article argues that stablecoins are evolving from a mere trading tool into a broad "dollar channel." It analyzes the industry's value chain through four layers: 1. **Issuance Layer (e.g., Tether, Circle):** The top layer that mints stablecoins, holds reserve assets, and captures the thickest interest rate spread. 2. **Infrastructure Layer (e.g., Bridge, BVNK):** Connects stablecoins to the traditional financial system, handling critical but complex "dirty work" like fiat on/off-ramps, banking integration, compliance (KYC/AML), and cross-border settlement. 3. **Acquiring/Distribution Layer (e.g., Stripe, Coinbase):** Embeds stablecoins into merchant systems, manages payment flows, and integrates with enterprise software. 4. **Application Layer:** End-users and businesses that ultimately use stablecoins for payments, settlement, or storing value. The author posits that while the issuance layer currently captures the most profit, the most overlooked and potentially critical layer is infrastructure. The core challenge for stablecoin adoption isn't the on-chain transfer (which is simple), but bridging the gap between blockchain and the real-world financial system. This involves solving practical problems for businesses: fiat conversion, reconciliation, tax handling, and user onboarding. Infrastructure companies are currently in a difficult "land-grab" phase—building networks, securing banking relationships, and achieving compliance country-by-country. They face pressure from both the profitable issuance layer above and distribution platforms below. However, the author suggests this layer is building a crucial moat. Once stablecoins become a default business rail, the infrastructure players who have done the hard work of integration may gain significant, durable value and pricing power.

链捕手5h ago

The Value Distribution of Stablecoins

链捕手5h ago

Why Is Nvidia Borrowing $20 Billion When It's Not Short of Cash?

Nvidia's recent announcement to issue at least $20 billion in senior notes, despite holding a strong cash position with over $48.6 billion in free cash flow last quarter, is not a sign of financial need. Instead, it represents a strategic move to leverage its high credit rating (recently upgraded to AA by S&P) to secure low-cost, long-term debt. This capital will support long-term AI infrastructure investments, data centers, R&D, supply chain prepayments, and strategic investments, while allowing the company to continue aggressive shareholder returns through stock buybacks and dividends. The decision reflects a mature capital management strategy: using debt to finance long-term growth assets is more efficient and less dilutive to shareholders than equity financing. It signals that Nvidia, like other tech giants (Alphabet, Meta, Amazon), is entering a new phase of heavy AI capital expenditure, shifting from a pure growth story to a story about capital allocation, credit strength, and long-term ecosystem positioning. The key question for investors is whether Nvidia can maintain its high cash flow generation and ensure that returns from these AI investments justify the cost of capital over the long term. The bond issuance amplifies its expansion capabilities but also ties its valuation more closely to the broader AI investment cycle's sustainability and profitability.

marsbit6h ago

Why Is Nvidia Borrowing $20 Billion When It's Not Short of Cash?

marsbit6h ago

Liberland Fires Tech Secretary After Alleged Blockchain And Website Takeover Attempt

Liberland's congress has voted to remove Technology Secretary Dorian Stern Vukotić, following a resolution accusing him of attempting to hijack the Liberland.org domain, removing administrative multisig protections, blocking the president from voting, and launching unauthorized tokens. The incident serves as a case study in blockchain governance, highlighting risks that go beyond smart contracts to include control over domains, admin keys, and off-chain authority. For the crypto industry, it underscores the need to scrutinize decentralization claims against operational realities, where a small group can still compromise governance. The story reflects a broader market shift where infrastructure security and governance are becoming as critical as price action. Editorial framing should treat the development as a verified information signal about governance risks, avoiding overstatement of Liberland's legal status and leaving room for follow-up evidence.

bitcoinist6h ago

Liberland Fires Tech Secretary After Alleged Blockchain And Website Takeover Attempt

bitcoinist6h ago

Trading

Spot
Futures

Hot Articles

Discussions

Welcome to the HTX Community. Here, you can stay informed about the latest platform developments and gain access to professional market insights. Users' opinions on the price of ETH (ETH) are presented below.

活动图片

Top Questions

Hot Categoriesright-arrow

Hot Tagsright-arrow