Ethereum founder Vitalik Buterin clarified that one of the main challenges facing prediction markets today is the absence of returns on funds locked within the platforms, as these assets remain without any yield, forcing users to forgo a fixed annual return of about 4% when holding dollars or other stable assets. In his view, this gap makes the cost high for serious investors seeking to hedge or preserve value. Buterin believes that introducing a returns mechanism will lead to a significant jump in trading volume and attract a broader user base.

Currently, most prediction markets do not provide any model for profit or returns distribution, which limits the willingness of institutions and individual investors to participate. However, if these markets are linked to decentralized finance (DeFi) protocols or revenue-sharing models, in such a way that pledged assets are employed or a portion of the fees is allocated as rewards for participants, the appeal of these markets will significantly increase.

Buterin sees that the problem is not just in technology, but in the narrow economic model that platforms focus on today. Most of them rely solely on betting and speculation mechanisms to attract users, ignoring the opportunity cost resulting from locking up funds. This particular obstacle prevents institutions and entities seeking long-term hedging tools from entering the market.

If prediction markets succeed in effectively integrating a 'returns' mechanism, whether through integration with interest-generating DeFi protocols or through redistributing a portion of the fees, this could significantly reduce the cost of participation and create new applications that go beyond mere speculation. We might see companies using these markets to hedge against regulatory risks, or projects benefiting from them to manage the volatility of their digital currency prices. With this transformation, prediction markets could evolve from mere betting platforms to a true financial infrastructure linking the traditional economy with the crypto world.

But achieving this vision requires additional technical advancements, such as privacy solutions based on zero-knowledge proofs (ZK) and multi-chain asset integration, alongside greater clarity in regulatory frameworks.

Regardless of the obstacles, Vitalik's proposal reminds us that true innovation does not stop at technology alone, but includes redesigning economic incentives and radically improving user experience.

> What do you think? Do you believe that adding a 'returns' mechanism will make prediction markets more attractive? Share your opinion with us!

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