Prediction markets are breaking out of niche circles and moving mainstream. By 2026, with the convergence of blockchain and AI, this sector will experience a true explosion — larger in scale, broader in coverage, and more sophisticated in mechanics. But behind the opportunities lie new challenges.

**The Age of Contract Explosion Arrives**

First, massive new contracts will emerge in the market. This goes beyond probability predictions for major events like elections or geopolitics, extending into all sorts of granular details and even complex cross-event predictions. These new contracts will continuously release valuable information and gradually integrate into the news ecosystem. However, this also surfaces an old problem: how to balance information value and market transparency? Blockchain's inherent auditability might just be the answer.

**The Dispute Resolution Challenge**

When contract numbers skyrocket, traditional centralized adjudication mechanisms start to struggle. Historical cases like the Zelenskyy prediction market and Venezuela election market disputes illustrate this — certain edge cases are simply too difficult to determine as true or false. To enable prediction markets to venture into more practically valuable domains, relying solely on centralized platform arbitration isn't enough.

**The Technology Solution**

The answer lies in decentralized governance and AI-driven oracles. Using LLMs to automatically determine dispute resolution outcomes improves efficiency while reducing human bias. This combination of solutions is what will truly enable prediction markets to expand into more real-world applications.