OI of @Polymarket is pushing past 300m in december, i believe this will only get higher.

prediction markets will see massive through collateralizing their bets: open interest → collateral value → borrow capacity → more open interest.

once outcome tokens can plug into lending curves, liquidations, and yield, prediction markets stop being a side app and start behaving like a composable rates product.

i expect to see more developments and innovation around predictions markets

i think @gondorfi will be the defi moment for prediction markets: it allows users to take loans on their poly market positions while traders hold onto their bets.

the mechanic is simple:
- yes/no shares (erc-1155, $1 at resolution) become collateral
- you can borrow usdc up to ~50% ltv
- loop to ~2x via borrow→buy→repeat
- lenders get a market-cleared rate (capped ~10–30%)
- liquidations kick around ~77% ltv
- pricing leans conservative (bid + twap)
- for high-vol markets, thresholds decay into expiry to reduce tail risk.

this directly attacks the core bottleneck in prediction markets.

duration kills liquidity.

long-dated “correct” trades used to be capital inefficient and now they can be defi composable to earn yields.

https://x.com/arndxt_xo/status/2000365707809391037