Recently, I have been delving into the leveraged prediction market sector. After participating in several public fundraising projects, I’ve identified a core issue—capital efficiency is really poor.

Simply put, whenever you place a bet on the outcome of an event on a platform, your principal is effectively frozen. It can be locked for a few weeks at minimum, or even several months in some cases. The problem is that your funds are tied up in a single prediction, with no flexibility. During this period, the secondary market might be booming, or a great arbitrage opportunity might suddenly appear, but you can only watch helplessly—your position is firmly anchored to that outcome, unable to move.

This is a common flaw in current prediction market platforms. Liquidity is fragmented, capital utilization is low, and this completely limits traders’ imagination. Your capital is trapped in a single betting outcome, losing the ability to flexibly allocate resources in the market. Compared to DeFi products that allow you to arbitrage across different mechanisms at any time, the design logic of prediction markets seems somewhat clumsy.