Polymarket has become a giant in the prediction market space with a cumulative trading volume of 22.6 billion. It currently holds the largest share of total market value among its competitors, according to Dune Analytics, and this shows in the overall traffic to the platform which is currently around 66,000 daily users.
Crypto prediction markets, in general, have expanded at an extraordinary pace. By mid-2024, several catalysts were accelerating this growth, including major global events that sparked trading activity and UX innovations that made participation faster and more seamless.
For developers entering this space, the opportunities seem immense. But as prediction markets scale in size and complexity, security becomes just as critical as usability.
Each prediction market contract, liquidity pool, and oracle feed introduces new layers of technical and financial risk. Understanding how to secure these systems, from smart contract logic to wallet infrastructure, is now essential for building platforms users can truly trust.
This article explores why prediction markets have become such a popular format in today’s crypto ecosystem and shows how Turnkey provides the secure, scalable foundation developers need to build them safely and at scale
Why prediction markets attract users, builders, and businesses
Prediction markets are gaining momentum because they sit at the intersection of data, engagement, and financial innovation. Their growth is the product of developer experimentation, business adoption, and user participation all reinforcing one another.
Why developers are building in prediction markets
Prediction markets turn code into continuous analytics. Each market produces live, onchain signals that can feed dashboards, bots, or automated trading strategies. Smart contracts are modular and composable, making them easy to integrate into other systems such as lending protocols, games, or DeFi platforms.
These markets are also inherently interactive. Constantly refreshing data encourages repeat participation and experimentation, driving engagement and steady onchain activity. For builders, this creates a strong foundation for products that evolve dynamically with market sentiment.
Why businesses are investing in prediction markets
From a business perspective, prediction markets introduce new ways to capture value. They can generate revenue through transaction fees, liquidity incentives, or custom market creation services. Their event-based structure naturally promotes retention as traders return to update positions whenever new information appears.
Each trade also generates valuable data. Market activity becomes a measurable form of collective intelligence, turning speculation into actionable insight. Businesses can use these signals to understand market trends, forecast demand, or gauge sentiment around upcoming launches and policy decisions.
Why users are participating in prediction markets
Users are drawn to prediction markets primarily to make money, but also because these markets make participation itself rewarding. They offer a way to apply knowledge, test ideas, and engage with real-time outcomes. Over time, this creates a system where collective intelligence turns into measurable insight.
The more participants who trade and refine predictions, the more accurate and resilient the markets become. This feedback loop strengthens liquidity, improves forecasting quality, and builds user trust through transparent results.
Prediction market's bigger opportunity
For builders, businesses, and users, prediction markets combine the technical depth of smart contracts with the engagement dynamics of social platforms and the analytical power of data products. They are more than a trading format. They are the foundation for a new generation of applications where participation itself becomes intelligence.
Key security considerations when building a prediction market
As crypto prediction markets grow in complexity and scale, so do the risks that come with them. Every trade, oracle update, and wallet interaction represents both a technical and financial move that needs to ensure trust at every point of the user journey.
Here are few things that devs can do to keep their platforms and users assets safe:
1. Secure smart contract architecture
Smart contracts are the foundation of any prediction market platform. They hold user funds, define event outcomes, and govern how markets operate. A single coding flaw or logic error can expose vulnerabilities that attackers can exploit for profit.
Each contract needs to undergo rigorous audits, rely on proven libraries, and follow upgrade processes that include time delays or community review. These steps ensure integrity and transparency throughout the lifecycle of the market.
2. Protect oracle and data feeds
Accurate market events depend on reliable data sources. Oracles connect smart contracts to off-chain information such as election results, token prices, or sports scores.
If an oracle provides inaccurate or manipulated data, the entire market outcome can be compromised. To mitigate this, developers should use multiple oracles and use clear dispute-resolution mechanisms to ensure fair settlements.
In addition, Turnkey has just released Turnkey Verifiable Cloud (TVC) which allows teams to generate attested values for financial metrics, market data, or other sensitive information. With TVC, you can have cryptographic assurance that the data the oracle brings into the system is the same data used during execution.
3. Safeguard user wallets and private keys
User wallets are where every interaction begins and ends. Traditional key management systems leave too much room for error, from lost seed phrases to phishing attempts. Reducing these risks starts with simplifying wallet UX.
Builders should integrate secure, user-friendly authentication methods such as passkeys that eliminate manual key handling. When wallet setup feels seamless and safe, adoption follows naturally.
4. Prevent manipulation and insider abuse
When a small group of traders can influence market prices through spoofing or insider activity, confidence disappears quickly.
To maintain integrity, platforms should implement position limits, transparent audit logs, and independent verification processes. Monitoring unusual trading activity and maintaining clear governance structures protect users and preserve market trust.
5. Ensure cross-chain and operational security
Modern prediction market crypto applications often operate across multiple chains or rely on bridges to connect assets.Builders should choose to limit exposure through minimal asset custody and test cross-chain operations under high-load conditions. Continuous monitoring and clear rollback procedures help prevent cascading failures if one part of the system is compromised.
6. Balance compliance and transparency
Security extends beyond code. As regulation evolves, prediction market platforms must demonstrate both compliance and decentralization.
Separating user identity, transaction data, and asset control reduces overall risk while preserving transparency. Builders who design with auditability in mind will find it easier to adapt to future requirements without overhauling their core systems.
Prediction markets succeed when users trust that outcomes are fair, funds are safe, and every transaction is handled responsibly. Security is not a single feature but the framework that makes reliable forecasting possible.
Protecting prediction markets with Turnkey
Good security in prediction markets is not just about protecting private assets of the market’s users. It’s also about defining how, when, and under what conditions those assets can be used. Turnkey uses TEEs and its policy engine to enforce both of these at once.
Turnkey’s enclave-based infrastructure
Every operation in Turnkey runs inside Trusted Execution Environments (TEEs), or enclaves, hardware-isolated zones that protect cryptographic keys and logic from exposure. Within these enclaves, key generation, signing, and policy enforcement occur entirely in sealed, verifiable environments.
With Turnkey, developers gain the reliability of enterprise-grade protection while maintaining the transparency, auditability, and user ownership that define decentralized infrastructure. Turnkey’s architecture scales securely across workloads without exposing private material and gives teams a consistent, isolated environment for every operation.
As mentioned above, Turnkey Verifiable Cloud also allows devs working with prediction markets to know without a doubt that the data they’re working with is the actual data received.
To do this, TVC runs the oracle logic inside a verified enclave, hashes both the inputs and outputs, and packages the result with a signed attestation proving exactly which code ran and how the final value was produced.
Any system consuming that data can recompute the hash and verify the enclave’s measurement, ensuring the value has not been altered between computation and execution.
Turnkey’s Policy engine
The policy engine serves as a programmable rule layer that governs every signing action inside a Trusted Execution Environment (TEE). Each transaction must meet explicit, developer-defined criteria before it can be approved. Builders can set precise rules such as who is authorized to sign, which contracts can be accessed, what assets can move, and how often signatures can occur.
Together, these systems address the key security challenges that prediction markets face. They can mitigate insider threats, prevent unauthorized contract interactions, and enforce policies at the signing layer that protect against liquidity risks and oracle manipulation.
Each transaction becomes both verifiable and compliant, enforced by hardware and governed by policy. For builders, this approach delivers an infrastructure that transforms trust into proof. Every key operation is secured, auditable, and predictable, allowing crypto prediction markets to scale with confidence.
Empowering prediction markets with Turnkey
Prediction markets rely on fast, secure, and verifiable infrastructure. Turnkey provides that foundation by giving developers the tools to build crypto prediction markets that are production-ready from day one. Its wallet architecture combines scalable authentication, flexible signing, and hardware-grade key protection, all designed for real-world performance and user trust.
Embedded wallets and authentication
Developers can create millions of embedded wallets that connect directly to prediction market contracts. These wallets integrate seamlessly into any application, allowing users to sign in through authentication methods they already know, such as passkeys, biometrics, or hardware keys.
This design removes the friction of browser extensions and external wallets while maintaining complete control over onboarding and recovery. For prediction markets, where speed, accessibility and trust drive participation, smooth authentication can determine whether users stay engaged or drop off before their first trade.
Session-based signing
Prediction markets generate frequent onchain activity. Users may place multiple positions, redeem outcomes, or close event contracts in a single session. Without the right tools, constant signature prompts can break the flow of trading.
Turnkey’s session-based signing keeps these interactions efficient and secure. Users authenticate once per session, and all subsequent transactions remain verifiable and tamper-resistant. The result is a faster, uninterrupted experience that balances usability with high-grade security.
Multi-chain flexibility
Increasingly, prediction markets also operate across ecosystems. Builders might start on Ethereum, then expand to Solana, Polygon, or other networks as user demand grows. Managing wallet logic for each chain can quickly become a bottleneck.
Turnkey simplifies this process with multi-chain compatibility built in. Developers can launch cross-chain prediction market protocols without rewriting wallet infrastructure for every new deployment. This flexibility shortens development cycles and keeps applications ready for wherever users trade next.
Turnkey delivers the security and scalability that modern prediction markets need to grow with confidence. By uniting embedded wallets, session-based signing, and enclave-backed key protection in one developer platform, it gives builders the foundation to launch prediction experiences that are fast, secure, and verifiable across every chain.
Turnkey and the next generation of prediction markets
As user sophistication grows, prediction markets will continue to evolve, enabling bets across multiple correlated events. Turnkey gives fintech and crypto teams the tools to create decentralized prediction markets that scale securely across any blockchain.
With embedded wallets, session-based signing, and TEE-backed security, you can launch prediction experiences that feel intuitive while meeting the highest cryptographic standards.
If you’re building a prediction markets hub or want to explore how Turnkey can support your crypto prediction markets at scale, get started with Turnkey today.
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