CertiK’s 2026 Report Shows Prediction Markets Entering Mainstream Amid Security Risks And Fragmented Global Regulation

In Brief

CertiK’s latest analysis concludes that prediction markets quickly expanded in 2025 but now face security vulnerabilities, artificial volume distortions, and diverging global regulations, even as they continue evolving into foundational infrastructure with growing institutional adoption.

CertiK, recognized as one of the largest providers of Web3 security services, released its 2026 Skynet Prediction Markets Report, offering an extensive examination of the prediction‑markets sector after a year marked by fast expansion, increased security exposure, and shifting global regulatory conditions

The report notes that prediction markets moved into the mainstream in 2025, with annual trading volume rising fourfold and overall activity consolidating around a limited group of leading platforms

Within CertiK’s Skynet Top Board evaluation framework, Kalshi, Polymarket, and Opinion now represent the majority of global volume, each adopting distinct regulatory strategies, technical designs, and architectural models.

Alongside this growth, the sector experienced elevated risks. In December 2025, a compromise of a third‑party authentication provider used by Polymarket demonstrated how hybrid Web2/Web3 systems can introduce centralized vulnerabilities even when underlying smart contracts remain secure

CertiK explains that on‑chain platforms continue to face ongoing threats, including oracle manipulation, weaknesses in administrative key structures, and front‑running

Market Distortions, Regulatory Divergence, And Growing Institutional Momentum In Prediction Markets

Research referenced in the report indicates that artificial volume reached levels as high as 60% on certain platforms during peak incentive periods driven by airdrops, creating distortions in liquidity signals and trading behavior. Despite these distortions, probability outputs across major platforms generally remained dependable for forecasting real‑world outcomes.

Following Kalshi’s successful challenge before the US Commodity Futures Trading Commission (CFTC), prediction markets have gained recognition as legal financial products at the federal level in the United States

At the same time, several EU jurisdictions have prohibited Polymarket on the basis of unauthorized gambling, and emerging state‑level restrictions within the US may contribute to a fragmented regulatory landscape.

Looking forward, CertiK’s report positions prediction markets as developing infrastructure for pricing uncertainty across a wide range of sectors. In 2026, the report anticipates that additional jurisdictions will formally establish prediction‑market frameworks, that technical advancements such as enhanced privacy features will accelerate, and that institutional participation will continue to expand.