Vitalik Buterin, the co-founder of Ethereum, recently disclosed his successful betting strategy on the prediction market Polymarket, where he profited $70,000 by wagering against unrealistic predictions. In an interview with Foresight News, Buterin explained his approach involves identifying markets he terms as being in “crazy mode,” where he bets against extreme outcomes.
To illustrate his strategy, Buterin referenced a specific market that posed the question of whether former US President Donald Trump would receive the Nobel Peace Prize. He also noted that some market speculations suggested the possibility of the US dollar hitting zero by 2027 during times of heightened anxiety.
Buterin revealed that his total investment in Polymarket was around $440,000. After placing a bet in 2025, he achieved a profit of $70,000, equating to a 16% return. He emphasized that betting against market hype is often a lucrative strategy, as it allows rational participants to capitalize on irrational sentiment.
In response to Buterin”s insights, Loxley Fernandes, a notable Web3 entrepreneur, and Dastan, CEO of Dastan company, commended his ability to identify flawed assumptions within the market. They pointed out that during periods of emotional extremes, rational players not only monetize their bets but also help stabilize market prices, which is the fundamental purpose of prediction markets.
However, Buterin also addressed the significant challenges faced by prediction platforms like Polymarket, particularly concerning the reliability of oracles. Oracles are decentralized services that link real-world event outcomes to the blockchain and are essential for resolving market bets securely and automatically. He provided an example related to the ongoing Russia-Ukraine conflict, where a prediction market was established to determine if the Russian army would capture control of the city of Myrnohrad.
In this instance, the oracle sourced maps from the Institute for the Study of War (ISW), a nonprofit think tank based in Washington, D.C. Buterin highlighted a critical security issue when the ISW”s account on the social media platform X was compromised, resulting in the dissemination of updated maps indicating Russian control over the city”s train station. The next day, the ISW issued an apology and retracted the erroneous information.
While the exact payout figures from this prediction market remain undisclosed, local Ukrainian media reported that some participants may have seen returns exceeding 33,000%, alongside a trading volume around $1.3 million. Buterin pointed out these incidents to illustrate the inadequacies in the security measures of prediction market oracles, stating, “They never thought that one message they shared would decide who owned $1 million on the blockchain.”
Buterin”s experience serves as a reminder of the inherent risks and potential rewards in the realm of prediction markets, highlighting the need for robust systems to ensure the integrity of the betting process.
