Tech Evolution! Coinbase Expands Prediction Markets On-Chain: Deciphering the Future of Cryptocurrency

Cryptocurrency Information Bureau News: Prediction markets are reaching trillions of dollars? Coinbase predicts the future with an on-chain strategy. Don't miss out on this new wave! Read the full article now! #Coinbase #PredictionMarket #Cryptocurrency

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Hello, this is Jon, who is surviving the waves of virtual currency. Today, I'll be bringing you the news of Coinbase rapidly expanding its prediction market on-chain, as if we were having a relaxed cafe chat. As a market backdrop, it's now 2025, and Coinbase has acquired The Clearing Company, a prediction market startup, and is strengthening its event-based trading. ThisOn-Chain StrategyIt's suddenly become mainstream! In conclusion, this may pave the way for cryptocurrencies to safely make gambling-like predictions on the blockchain. But it's also full of risks. (Approximately 250 characters)

Coinbase Expands On-Chain Strategy: Prediction Markets Go Mainstream

Background and Issues

So, everyone, have you ever heard of a "prediction market" in the world of cryptocurrencies? Simply put, it's a market where you can make money by betting on the winner of an election or the outcome of a sport. But when you combine this with blockchain, things get a lot more interesting.

As background, it's now 2025 and Coinbase is no longer just a cryptocurrency exchange. According to the news, they acquired The Clearing Company,Prediction marketsThis is an attempt to solve the problems that the traditional gambling market has had.

Challenge 1: Lack of trust. With regular betting sites, the results are decided by a central operator, which makes you question whether the results are really fair. For example, it's like when you bet on a soccer game with a friend, and your friend loses and complains, "No, that goal was offside!" (laughs) With blockchain, everything is transparent and cannot be tampered with, so there will be less of that kind of arguing.

Challenge 2: Regulatory barriers. Prediction markets are gradually becoming legal in the United States, but online gambling remains a gray area in Japan. Coinbase's strategy is to strengthen its regulatory clearing (payment processing) system to expand safely.

Issue 3: Scalability. If too many people bet at the same time, the system will crash. On-chain can withstand this because it is decentralized, but gas fees (transaction fees) are a bottleneck. Coinbase seems to be mitigating this with Layer 2 technology.

In short, prediction markets are an exciting way to "make money by predicting the future," but they have not become mainstream due to barriers of trust, regulation, and technology. Coinbase's move is trying to break through this with on-chain technology. It's exciting, but proceed with caution!

*Using online casinos from within Japan may be considered a form of gambling. This article is intended solely to provide commentary on technology and market trends.

The core of the technology

Now onto the main topic! I'll explain the core of Coinbase's on-chain strategy in simple terms. First, what is a prediction market? It's like a market where you buy the winner of an election like a stock. If you predict the outcome correctly, you make a profit, but if you're wrong, you lose money. The on-chain version automates this on the blockchain.

Technically speaking, smart contracts (automated contracts on the blockchain) are the key. It's like a vending machine. Just like putting in a coin and pressing a button to get a drink, rewards are automatically paid when certain conditions (e.g. election results) are met. No human intervention required! This prevents fraud.

Click the image to enlarge.

The technology of The Clearing Company, which Coinbase acquired, brings in people with experience from platforms like Polymarket and Kalshi. This will allow Coinbase to move its "clearing house" (the intermediary for settling transactions) on-chain. The joke is that they'll leave the "adjudication" of bets to the blockchain, so no one can complain (laughs).

About tokenomics (economic design). Prediction market tokens function as shares in events. Prices fluctuate based on market predictions. Example: If Trump has a 90% chance of winning, those who buy at a high price are confident. However, if the outcome reverses, they will lose a lot. That's the risk!

Here's a comparison table of the differences from the previous version:

Item	Traditional (off-chain prediction market)	This time (Coinbase on-chain version)
Reliability	Dependent on central management, risk of tampering	Transparent and immutable with blockchain
Settlement speed	It may take a few days	Instant with smart contracts
Regulatory Compliance	Many bans depending on the region	Promoting legalization with clearing technology
User Participation	Account registration required, strict KYC	Easy to connect to a wallet, but anonymity is limited
Fees	High, large share of management	Cost reductions continue, primarily focused on gas prices

As you can see from this table, Coinbase's strategy is to create a "fast and fair market." However, if gas prices rise, it might become a joke that "your coffee money will be gone" (lol). Technically, they scale using Base Chain (Coinbase's Layer 2).

Applications and Market Impact

So how can we make use of this? Let's divide it into the developer's perspective and the user's perspective.

First, from the user's perspective. In addition to elections and sports, you can also predict the weather and stock prices. For example, you can bet on whether the price of Bitcoin will exceed $10 next year. The fun part is turning your knowledge into money. However, it can be a bit like gambling, so be careful. In terms of market influence, prediction markets are highly accurate (wisdom of the crowd), so they can serve as a substitute for opinion polls. There's talk in the news that Trump's tax changes may drive bettors to prediction markets.

From a developer's perspective, The Clearing Company's technology allows you to create custom prediction markets. By incorporating it into a DeFi app, you can predict the results of DAO votes. It's like taking bets on whether a proposal will pass in a company meeting, which can boost your motivation (laughs). It will have a major impact on the entire market, and if Coinbase's "Everything Exchange" vision is realized, cryptocurrencies, stocks, and predictions will all be available in one app. While competitor Robinhood is also a threat, the transparency of the blockchain is a differentiating factor.

Impact joke: We're now in an era where "predicting the future can make you money." However, if you can't predict it, you might feel depressed and think, "My fate is unpredictable" (self-deprecating). Warning for Japanese users: Using overseas exchanges carries risks that are not legally protected. As a technology trend, DeFi's TVL (total locked value) may increase.

*Using online casinos from within Japan may be considered a form of gambling. This article is intended solely to provide commentary on technology and market trends.

Actions by level

Here we suggest actions to "understand and experience" rather than "buy." For beginners to intermediate users.

Beginner level: First, learn the basics of prediction markets. Practice without using cryptocurrency using a free simulation app. For example, try playing election predictions "like a game." Create a wallet (e.g. MetaMask) and get acquainted with the on-chain world. Joke: This will help you break your "habit of losing without betting" and you'll be one step ahead (lol).

Intermediate level: Check out the prediction market on the Coinbase app (viewing only recommended for those in Japan). Dig deeper into how it works and read the smart contract code on GitHub. If you're familiar with DeFi, try a similar project (Polymarket) on the testnet. Practice calculating gas fees to understand the risks. As an action, get into the habit of writing down your predictions and comparing them with the market.

Overall: Don't forget to DYOR (Do Your Own Research). Check news from multiple sources. Focus on experience and enjoy the fun of technology!

Future prospects and risks

The future looks bright. Coinbase's strategy could see prediction markets become a reality by 2026.trillion dollarsIt may become a reality. In the news, integration with stock trading and custom stable coins is progressing. If "Everything Exchange" becomes a reality, virtual currency will become an everyday financial tool. For example: You wake up in the morning, buy stocks with one app, predict elections, and borrow and lend using DeFi.

But there are also significant risks. Technical risk: A blockchain bug could freeze funds. If the oracle (external data input) is wrong, predictions could collapse. It's like a weather forecast going wrong and ruining your picnic (wry smile).

Legal risks: Japan has strict gambling laws. Using overseas exchanges can lead to tax and other unprotected issues. Operational risks: Market volatility can lead to huge losses. While there are tax benefits (like the Trump bill in the news), they can also be counterproductive.

Balance of outlook and risk: Take a positive approach, diversify your investments, and learn. The Coinbase acquisition is an accelerating factor, but regulatory changes may halt it. Keep a calm eye on the market.

My Feelings, Then and Now

Today, I explained Coinbase's on-chain strategy and the expansion of prediction markets with a touch of humor. The key is creating a transparent and fair market, but don't forget the risks. The value of technology is great as a tool for predicting the future. Practice DYOR and make your own decisions! This should make the world of cryptocurrency even more fun.

Reference links and sources

• Coinbase Expands Its Onchain Strategy as Prediction Markets Move Toward the Mainstream – Blockchain Magazine
• Coinbase to acquire prediction markets startup The Clearing Company – The Block
• Coinbase Agrees to Buy The Clearing Company – CoinDesk
• Coinbase adds prediction markets and stock trading – CNBC
• Coinbase Pushes Prediction Markets Deeper Onchain – Bitcoin News