Prediction markets surge 4x as security and regulatory risks mount – CertiK report

According to a new report from blockchain security firm CertiK, prediction market trading volumes quadrupled in 2025. Annual trading volume climbed from $15.8 billion in 2024 to about $63.5 billion in 2025.

According to the CertiK analysis, this increased adoption, driven by high-profile global events, raises sustainability questions.

Kalshi, Polymarket, and Opinion dominate the prediction market

According to CertiK, Kalshi, Polymarket, and Opinion now account for the majority of global volume. Each of them has different regulatory and technical approaches. 

Polymarket is independent and built on top of crypto. It runs on blockchain technology and settles transactions using Ethereum and USDC. Its limitless design enables huge market creation and global participation. However, it exposes the platform to ongoing regulatory scrutiny in several jurisdictions. 

Polymarket is recognized as a legal financial product at the federal level in the US. However, several EU countries have banned Polymarket as unauthorized gambling. There are also new state-level limits in the US that could make compliance more difficult to manage. 

As reported by Cryptopolitan, Polymarket filed a lawsuit against the state of Massachusetts in federal court. This argument implied that states lack the authority to independently shut down prediction markets over which the CFTC has exclusive jurisdiction.

On the other hand, Kalshi operates as a fully regulated US platform. It is overseen by the Commodity Futures Trading Commission (CFTC). Its markets are built as event-based derivatives, with legal compliance and institutional credibility as top priorities. 

However, such regulatory clarity, though limiting, opens up some categories to the market. This lures investors seeking clarity and access through conventional financial highways. Kalshi has seen over $1 billion traded by its users recently during the Super Bowl event. The amount it held increased by 2,700% compared to the previous year.

The security firm expects Kalshi, Polymarket, and Opinion to remain the most popular. However, it says growth will depend on whether platforms can retain users without incentives, navigate state-level restrictions, and adapt as jurisdictions weigh their own regulatory frameworks.

Meanwhile, major companies are set to expand into the prediction market this year, including Coinbase, integrating event-based contracts alongside its crypto offerings; Crypto.com, launching its OG prediction platform with tradable contracts; Gemini, preparing to enter with a regulated prediction-market product; and Robinhood, scaling its marketplace with new event-based trading options.

Prediction markets have structural weak points

On the flipside, this growth introduced heightened risks. CertiK also warned that the fast growth of the prediction market sector has outpaced the maturity of its security design, leaving structural weaknesses that become more serious as platforms grow and add more users.

There are hybrid Web2/Web3 designs that aim to strike a balance between on-chain openness and onboarding ease. However, CertiK said that combining them “exposes both attack surfaces at the same time.”

At the end of last year, a third-party authentication provider used by Polymarket was compromised. CertiK states that on-chain platforms continue to face persistent threats, including “oracle manipulation, administrative key vulnerabilities, and front-running”. 

However, CertiK noted that market prices and probability outputs generally remained reliable. To that end, manipulation affected appearance more than actual forecasting accuracy.