Ethereum co-founder Vitalik Buterin said he made $70,000 in profits on Polymarket’s trading prediction market last year, not by chasing hot stories, but by letting what he calls collective “madness” fade. The Ethereum co-founder used this conversation to surface another concern: oracle vulnerabilities in real-world event payments, believing it to be a function of behavioral reflex in a market where returns are thin and hype-prone.
Here’s how Ethereum’s Buterin earned $70,000
In an interview posted to X by Foresight News reporter Joe Zhou, Zhou asked whether Buterin was still using Polymarket after he became active last year. “Yes, I made $70,000 at Polymarket last year,” Buterin replied. When asked about size, he said the initial investment was $440,000, suggesting a return in the mid-teens, in stark contrast to the more typical retail experience, which is chopped and diced by headline-driven probabilities.
Buterin described his strategy as an opportunistic mean reversion based on emotion rather than prediction itself. “My method is simple: Look for markets that are in ‘crazy mode’ and bet that ‘crazy won’t happen,'” he said.
“For example, there are markets that bet on whether Mr. Trump will win the Nobel Peace Prize. Or, in times of extreme panic, there are markets that predict that the dollar will go to zero next year. When market sentiment goes into this irrational ‘crazy mode,’ I bet against it, which usually pays off.”
When Zhou asked where polymarkets tend to focus attention (cryptocurrency, politics, entertainment, economics), Buterin said the focus is around politics and technology, reiterating that in Zhou’s view, the edge comes from arenas where participants are “caught up in frenzy and irrationality.”
The more important part of the thread has moved from trading style to settlement integrity. Referring to online chatter surrounding Venezuela-related markets, Mr. Chou raised the issue of information asymmetry and “sophisticated knowledge,” and asked whether Mr. Buterin had seen similar developments. Buterin pointed his answer to Oracle’s weaknesses, citing wartime contracts whose outcomes depended on narrow operational definitions.
He described a market for the Ukraine war that will be decided based on whether Russia “controls a particular city,” explaining that the smart contract defines “control” as control of a city’s most important train station. He said the oracle’s sources were pinned to tweets and maps from the Institute for the Study of War (ISW).
Then a failure mode occurred. “ISW employees hacked into their company’s systems, perhaps by mistake or perhaps intentionally. Their maps were suddenly updated to show that the Russian military was in control of the station,” Buterin said. “This caused what everyone thought was only a 5% chance (nearly impossible) to instantly become 100% in the prediction market. The next day ISW withdrew the update, but the money may have already been paid.”
The lesson for Buterin is not just that prediction markets can be wrong, but that the data supply chain that markets outsource can be vulnerable to systematic underestimation by crypto participants. “This reveals a big problem: the security standards of current Oracle data sources (like the Web2 news website and Twitter) are too low,” he said. “They never imagined that the single message they posted would determine the ownership of $1 million on the blockchain.”
Asked how to solve Oracle’s problems, Buterin described two broad approaches. The first is a centralized trust model, which effectively designates an authoritative publisher like Bloomberg. The second is token voting, a decentralized mechanism that he associated with UMA. Buterin said confidence in UMA has declined because of perceived game-theoretic weaknesses. If the Whale Coalition were able to monopolize the vote, it could financially penalize minority “truth” voters and pressure participants to reflect power rather than reality.
At the time of writing, Ethereum was trading at $3,010.
Featured image created with DALL.E, chart on TradingView.com
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