Vitalik Buterin: Shift Prediction Markets to Hedging — A Stablecoin Alternative

Ethereum co‑founder Vitalik Buterin urged a structural shift in prediction markets away from short‑term crypto bets and sports‑style wagering toward generalized hedging and real‑world risk‑management use cases. In a February 2026 thread he warned current platforms encourage ‘dopamine’-driven trading and attract naive loss‑making participants, automated market makers that buy signals, and hedgers—arguing the product‑market fit is skewed toward low‑value entertainment. Buterin proposed personalized prediction‑market baskets: localised indices of expected personal expenses (managed by on‑device LLMs) that issue prediction shares settling in assets users prefer to hold (ETH, wrapped stocks or interest‑bearing fiat equivalents). Users would keep growth assets (ETH, stocks) while using prediction shares to stabilise spending power, avoiding opportunity cost by denominating markets in preferred holdings. He framed this as a potential stablecoin alternative that doesn’t rely on fiat pegs and could attract sophisticated capital, turning prediction markets into information infrastructure for hedging and coordination. Industry figures, including Myriad CEO Loxley Fernandes, echoed the view that hedging‑focused markets could evolve prediction markets beyond entertainment. Buterin offered no technical blueprint or timeline; the idea remains conceptual but could materially shift demand for ETH‑denominated products and DeFi hedging architectures if adopted.