Vitalik Buterin, co-founder of Ethereum (ETH), has just shared a new blog post about prediction markets, their role in the digital sphere, and the opportunities for human collaboration they introduce. The emerging frontier of “infofinance” paves the way for fair, democratic and inclusive participation for different actors. Additionally, it can use quirky artificial intelligence (AI) concepts, suggests Buterin.
Ethereum’s Vitalik Buterin Reflects on PM and Coins Finance Term: What You Need to Know
While already a very useful tool for the world, on-chain prediction markets present their potential as part of a much larger and incredibly powerful category that could be described as “infofinance”. Vitalik Buterin, co-founder of Ethereum (ETH), observes its applications in a new essay“From prediction markets to infofinance,” shared on his personal blog.
Observing the success of Polymarket, an on-chain PM application based on Polygon, Buterin noticed that platforms of this type exist both as advanced betting instruments and as informational websites. In some cases, their statistics can be even more informative and unbiased than those of digital media:
You can be more informed by reading the news and the rankings, than by reading one or the other alone (…) If you are a bettor, then you can deposit on Polymarket, and for you it is a betting site. If you are not a punter, then you can read the rankings, and for you this is a news site
This dualism lays the foundation for the concept of using finances as a way to align incentives to provide viewers with valuable information.
In other words, “info finance” could be a generic term for solutions allowing authors to support their statements with cash bets (just like with traditional PMs) and for readers interested in such “supported” statements .
As both parties are interested in correct information (publishers want to benefit from sharing it, while readers want to filter it out from the noise), the use of cryptographic transactions could be a powerful instrument needed to achieve balance.
As U.Today covered previously, Polymarket’s triumph is what will be remembered in the crypto world from the last US presidential elections.
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The whole world was watching the dynamics of election statistics on Polymarket rather than on news sites. The platform’s charts were free of advertisements and political bias and were therefore treated as the most recent and reliable sources of data.
Infofinance opens up more opportunities for the use of AI
Polymarket’s CEO even shared a rumor that US presidential election headquarters were using Polymarket to track who was winning at which time. Despite huge traffic, Polymarket and its Polygon (POL) blockchain managed to stay online all the time.
Vitalik Buterin admitted that the vast majority of “infofinance” markets will be associated with microtransactions and data flows. To deal with this complexity, the use of AI and LLMs in particular will be essential:
One technology that I hope will supercharge information finance over the next decade is AI.
Such designs will be useful in a number of applications, including DAO management, personal tokens, advertising, peer review of scientific articles, and financing of public goods.
“Infofinance” could evolve into a framework of “distilled human judgment mechanisms” based on decentralized networks.