A16z Crypto highlights the core challenge in prediction markets beyond pricing; AI-driven decision-making mechanisms could address scalability issues

A16z Crypto’s analysis reveals that the pivotal issue in prediction markets is the accuracy of determining outcomes rather than just pricing. This challenge is notably acute in smaller events where unreliable settlement processes can erode market confidence.

By implementing AI judgment mechanisms, prediction market settlements could become more efficient and fair. Experts suggest using Large Language Models to improve transparency, ensuring that the decision-making processes are clear, trustworthy, and resistant to manipulation.