a16z: Prediction markets will be deeply integrated with crypto and AI by 2026, requiring a "truth consensus" mechanism to resolve numerous contract ad...

On January 9, Andy Hall, a research advisor at a16z crypto and professor of political economy at Stanford University, said that prediction markets have now entered the mainstream and will become more massive, broader, and smarter by 2026 due to their deep integration with cryptocurrencies and artificial intelligence—while also bringing new challenges to their builders.

First, more contracts will be launched this year. This means participants will not only have access to real-time predictions of major elections or geopolitical events, but also coverage of various sub-outcomes and complex, intertwined events. As these new contracts disclose more information and integrate into the news ecosystem (which is already underway), they will raise important social issues: How to balance the value of this type of information? How to optimize the design to improve transparency, auditability, and other possibilities? Cryptography is providing the foundation for this. To cope with the surge in the number of contracts, the market needs a new "truth consensus" mechanism to resolve contract adjudication.