Prediction markets vaulted into the mainstream in 2025, growing rapidly in size even as fresh security and regulatory questions piled up, according to a new deep-dive from CertiK. The 2026 Skynet Prediction Markets Report finds annual trading volume surged roughly fourfold last year, a jump CertiK pegs at $63.5 billion, even as activity concentrated around a handful of major platforms.
The report’s Skynet Top Board evaluation framework shows trading has consolidated around three leaders that now account for the lion’s share of global volume: Kalshi, Polymarket and Opinion. Each, CertiK notes, is taking a distinct path, from Kalshi’s federally regulated, exchange-style approach to Polymarket’s hybrid Web2/Web3 architecture and Opinion’s chain-native model, and those differences are shaping how risk shows up on the platforms.
The sector’s breakneck growth has not been without cost. In December 2025, Polymarket disclosed that a small number of user accounts were compromised after a vulnerability in a third-party authentication provider was exploited, showing how hybrid architectures can create centralized failure points even when underlying smart contracts remain intact. CertiK uses that incident to warn that integrations with Web2 services can erode many of the decentralization benefits users expect.
Security and Regulation
On the chain side, CertiK’s research flags persistent threats that keep security teams awake: oracle manipulation, misused administrative keys and front-running remain material vulnerabilities for on-chain markets. The report also highlights distorted activity driven by incentives. Research cited by CertiK estimates that, during peak airdrop periods, artificial volume reached as high as 60 percent on some venues, skewing liquidity signals and making it harder to read genuine market sentiment, even while probability outputs across major platforms generally stayed useful for forecasting.
Regulation is similarly mixed. After a high-profile legal battle, Kalshi has successfully challenged federal regulators and won recognition that event contracts can be lawful financial instruments under U.S. federal law; that federal clarity, however, has not insulated platforms from local action. Several European countries have moved to block or ban Polymarket as an unauthorized gambling service, most visibly Portugal and Hungary in recent weeks, and emerging state-level restrictions inside the United States threaten to create a fragmented compliance landscape for operators and users alike. The contrast between federal acceptance and regional prohibition is already reshaping where and how firms can operate.
Looking forward, CertiK frames prediction markets as evolving infrastructure for pricing uncertainty across domains from politics to weather and corporate events. The firm anticipates more jurisdictions will formalize rules in 2026, technical improvements such as privacy and oracle hardening will accelerate, and institutional adoption will broaden, provided platforms can mature their security posture and navigate an increasingly complex regulatory map.
The report closes with context about its own author. CertiK, founded in December 2017 by academics from Yale and Columbia, has grown into one of the largest blockchain security firms, applying formal verification and active monitoring to protect smart contracts and protocols. CertiK says it has worked with thousands of enterprise clients, secured vast sums of digital assets and discovered hundreds of thousands of vulnerabilities; its client roster includes names such as Binance, Ethereum Foundation, BNB Chain and others.
The firm’s analysis of the prediction markets sector is both a reflection of how fast the space has scaled and a call to action for developers, operators and regulators to raise the bar on safety. As prediction markets continue to attract capital and users, CertiK’s findings make clear that growth alone won’t be enough. Without better defenses and clearer rules, the very mechanisms that make these markets useful for forecasting could also become vectors for manipulation and regulatory conflict.
