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Polymarket is becoming the probability layer for reality.
But scaling from politics and crypto to every domain requires solving three problems. These solutions could determine whether Polymarket stays a prediction platform or the default source of truth.
The Liquidity Challenge
Markets need depth to be accurate. The data shows a direct correlation between volume and truth. Markets over $10M achieve near-perfect Brier scores because liquidity forces information asymmetry to surface and get priced in.
New markets face a bootstrapping problem. Thin order books mean traders get bad execution and high slippage which can deter participation.
Polymarket has spent over $10.5M on liquidity incentives. That works for high priority categories but doesn’t scale to thousands of markets across every domain. The platform needs a programmatic solution that grows with it.
The Oracle Problem
Resolution is the trust layer. When hundreds of millions depend on a market outcome, the economic security must exceed the incentive to manipulate.
UMA’s optimistic oracle uses token voting for disputes. The Zelensky suit market showed the tension. Massive volume hinged on a subjective judgment, and the theoretical attack vector existed even though the system worked correctly.
At institutional scale, oracle security can’t rely on good faith. The resolution mechanism needs to make manipulation economically irrational even when bet sizes reach nine figures.
The Expression Problem
Prediction markets must fully collateralize every position. That’s the trust guarantee. But it creates a capital efficiency problem for complex bets.
A $5 parlay at 100,000 to 1 odds requires $5k locked immediately. Sportsbooks manage net risk across millions of contradictory positions. Prediction markets can’t net like this without breaking the trust model. Every contract must be fully backed from creation. This limits the platform to simple binary markets while sports betting volume concentrates in parlays.
How The Token Unlocks Scale
The token solves these problems through coordination, not capital raising.
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