[DigitalToday reporter Jinju Hong] Ethereum (ETH) co-founder Vitalik Buterin (비탈릭 부테린) has pointed to oracles as the biggest security vulnerability in decentralised prediction markets.

According to blockchain media outlet Cryptopolitan on May 6 (local time), Buterin said in a post on X, formerly Twitter, that for prediction markets to function properly, oracle reliability in judging outcomes matters more than trading structure.

Prediction markets are structured around betting on the outcomes of future events, but oracles are the entity that determines what actually happened. Even if trading is decentralised and conducted on-chain, the entire market can be shaken if an oracle stops, is hacked or is manipulated. Buterin said prediction markets are "only as trustworthy as the oracle."

He in particular viewed centralised oracle structures as a single point of vulnerability. If outcome judgments are left to a small number of companies or limited validators, users effectively have to accept those judgments as they are. He said this does not align with what decentralised systems aim for.

He also raised issues with oracle models tied to financial interests. If participants who verify outcomes have direct economic stakes in the judgments, reward structures can be distorted, he said. He saw stronger incentives to sway voting processes for personal gain in markets with millions of dollars at stake. Buterin positively assessed a shift toward decentralised oracles that do not rely on financial staking.

As a next task, he proposed private voting. If the verification process is public, it can be exposed to peer pressure, organised attacks and bribery, he said. If it becomes known who holds what position before a judgment is finalised, attempts may arise to exert influence on the outcome. He said private voting by those participating in fact-checking should be the next major upgrade.

The issue-raising also touches on oracle risks that Buterin has repeatedly stressed in decentralised finance security. He previously cited oracle security and decentralisation as core areas when describing priorities for the Ethereum ecosystem and warned that "a lot of long-standing problems" are hidden in this field. Because oracles connect outside information to on-chain mechanisms such as lending, stablecoins, derivatives and liquidations, the scope of damage can widen if vulnerabilities emerge.

He recently also mentioned a dispute case on the TruO prediction market platform. The issue was whether Polymarket's pUSD launch matched a 2026 token launch schedule. A jury voted to reset the outcome rather than make a final ruling. Buterin saw the case as showing the current oracle system is still less prepared to deliver stable final judgments.

The issue-raising also ties in with new attempts to replace human judgment with machine-based decisions. Prediction market platform Profit launched an AI-based prediction market with $10,000 in initial capital. This is read as a trend of adding AI forecasting tools on top of political and international event data accumulated on platforms such as Polymarket and Kalshi.

The market is also watching this change. In the 'Market Snapshot Billions FDV After Launch' market, the current 'yes' price is pointing to 100 percent. Participants are strongly reflecting the possibility that the Profit platform could reach a high fully diluted valuation (FDV) right after launch. Partnerships, capital inflows and regulatory responses are cited as variables that will determine the market value and acceptance of such AI-based prediction markets.

Ultimately, Buterin's issue-raising again showed that the core of prediction markets lies not in price formation itself but in who confirms the final outcome and how. Even if trading is designed to be decentralised, market trust is difficult to maintain if the adjudication structure is shaken.