Vitalik Made $70K Betting Against “Crazy Things” on Polymarket – Here’s How

Ethereum co-founder Vitalik Buterin revealed he earned $70,000 on prediction market platform Polymarket last year through what he calls “anti-insanity mode,” a strategy of betting against irrational market frenzy.

The disclosure came during an extensive interview with Foresight News in Chiang Mai, where Buterin outlined his growing concerns that crypto applications are diverging from their original missions despite significant technological progress.

Buterin’s profit strategy involved identifying markets caught in “crazy mode” and wagering that unlikely events wouldn’t materialize, including bets against Donald Trump winning the Nobel Peace Prize and the dollar collapsing to zero during panic periods.

The comments arrive as prediction market adoption surges, with Polymarket app installs jumping 1,200% between January and December 2025, while weekly trading volume across platforms exploded from $500 million to nearly $6 billion.

Three Urgent Missions Driving Ethereum’s Direction

Buterin framed his current motivation around three escalating concerns that extend beyond technical development into existential threats facing the crypto industry.

“My biggest fear right now is that the entire industry will eventually degenerate into a place for 100% cryptocurrency speculation, with only conjecture and no real applications,” he said.

Beyond this “doomsday scenario,” Buterin emphasized the need to improve Ethereum’s technology, particularly by making Layer 2 networks more efficient and decentralized while catching up with Web2 user experiences.

His third priority addresses a darker possibility.

“If we fail with Crypto, the future technological world could very well be completely dominated by Centralized AI, which would be a very dangerous future,” Buterin warned.

He positioned cryptocurrency as “our defense against this trend of digital totalitarianism and for maintaining diversity and freedom in the technological world.“

When Technology Succeeds, But Applications Fail

The Ethereum founder identified a fundamental disconnect emerging across blockchain development over the past year that threatens the industry’s broader purpose.

“Over the past year, Ethereum has made tremendous progress in scaling technology,” Buterin explained, noting gas capacity increases from 30 million to 60 million with goals reaching 300 million this year.

However, a recent network research report from MigaLabs shows that Ethereum has struggled with data-heavy blocks since December’s Fusaka upgrade, with missed-slot rates climbing above 1.7% when blob counts exceed 16.

Despite these challenges and advances, he also expressed deep concern about application-layer stagnation, arguing that prediction markets remain the only sector showing explosive growth in 2025, yet even these platforms expose significant problems.

Buterin criticized Polymarket’s focus on short-term bets, such as hourly Bitcoin price movements and weekly sports outcomes.

“These short-term bets don’t have much social significance in the long run,” he said, advocating instead for mechanisms with long-term incentives like Robin Hanson’s Futarchy concept, currently being tested by MetaDAO, where prediction markets determine governance methods rather than just betting outcomes.

When asked about priority applications, Buterin emphasized decentralized social networking first, followed by “smarter” DAOs that move beyond simple token voting.

“It can’t just be about issuing a token and having a vote,” he said. “Developers need to think more deeply: What are the specific goals of this organization? What kind of governance structure best matches these goals?“

As these infrastructure challenges persist, the Ethereum Foundation recently elevated quantum resistance to a top strategic priority, allocating $2 million in funding and a dedicated Post Quantum team.

Oracle Vulnerabilities Threaten Prediction Market Growth

Buterin highlighted critical security flaws in current oracle systems that could undermine the reliability of prediction markets as adoption accelerates.

He recounted a Ukrainian conflict market in which the Institute for War Studies’ maps served as the data source for determining Russian control of a train station.

“ISW employees, perhaps by mistake or intentionally, hacked their own system, and their maps suddenly updated to show that Russian troops controlled the train station,” Buterin explained.

This caused an event with a 5% probability to become certain instantly before ISW retracted the update the next day.

Current Oracle solutions face serious limitations. While centralized models like Bloomberg require trusting a single entity, decentralized token-voting systems like UMA suffer from game-theoretic flaws that allow whales to manipulate voting results.

“Even if you vote for the truth, if you oppose the majority, the system will judge you as the loser and you will lose money,” Buterin said, forcing participants to vote with whales rather than truth.

Despite Buterin’s warning, the Prediction Market economy is booming. Polymarket returned to the U.S. market following CFTC approval with ultra-low 10-basis-point taker fees, while the company secured a $2 billion investment from Intercontinental Exchange at a nearly $9 billion valuation.