CZ Unveils BNB Chain Prediction Platform That Generates Yield on Locked Funds

• Predict.fun launches on BNB Chain with yield-generating features for locked prediction market funds.
• The platform has 12,000 users and $300,000 volume versus Polymarket’s $3 billion trading volume.

Changpeng​‍​‌‍​‍‌​‍​‌‍​‍‌ Zhao, the founder of Binance, has launched a new BNB Chain prediction market that provides a solution to an industry challenge that traders have been facing for a long time. 

The platform named Predict.fun was created by a former employee of Binance and supported by YZiLabs through its incubation and investment program.  Typically in prediction markets, the users’ capital is locked without any returns, but this innovative platform allows the funds to make a yield while the positions are still ​‍​‌‍​‍‌​‍​‌‍​‍‌open.

Tackling Idle Capital Problem

For​‍​‌‍​‍‌​‍​‌‍​‍‌ a long time, prediction markets have been hampered by capital inefficiency, which meant that traders had to lock up their funds for a long time without being able to earn any passive income. As a result, major platforms such as Polymarket and Kalshi have tried to solve the problems by giving staking rewards, providing treasury incentives, or creating point systems to compensate users for their opportunity costs. 

Predict.fun is doing something different by creating a yield that is automatically generated on the deposited funds so that the capital remains productive throughout the whole betting period without any manual intervention. 

In fact, the platform is only running two active markets with a total volume of close to $300,000, but it is claiming that over 12,000 users have registered and nearly 300,000 bets have been ​‍​‌‍​‍‌​‍​‌‍​‍‌made.

Compared​‍​‌‍​‍‌​‍​‌‍​‍‌ to these numbers, the top industry players have a very different story. Polymarket has a total trading volume of more than $3 billion, while Kalshi has been around $587 million approximately to date. 

A small competitor named Limitless has created a volume of around $10.9 million, as per the information from Polymarket Analytics. This clearly indicates the huge difference that new entrants have to face. The main benefit of Predict.fun is a very large user base of BNB Chain, which holds 25% of the market share, with almost twice the number of active addresses as compared to last ​‍​‌‍​‍‌​‍​‌‍​‍‌year.

Nevertheless,​‍​‌‍​‍‌​‍​‌‍​‍‌ BNB Chain has a significant disadvantage in the issuance of stablecoins, which might ungate the liquidity pool that prediction markets would use for their operations as they gradually adopt. 

After a brief period of excitement due to the initial launch, the platform needs to prove that it is able to maintain the trading volume and can also effectively compete with the existing players who have a liquidity advantage. 

In his announcement, CZ pointed out that his post should not be interpreted as an endorsement; he was not directly involved but indirectly acknowledged the platform’s creative way of generating yields by ​‍​‌‍​‍‌​‍​‌‍​‍‌lending.

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