The Problem
Prediction-market positions reached scale but stayed financially inert.
Prediction markets have reached scale, but their positions remain financially inert. A claim can be bought, held, sold, or redeemed at resolution, and nothing else. There is no credit against it. There is no yield on it. There is no financing for the gap between resolution and payout. There is no shared standard a third-party lender could underwrite against, and no liquidation mechanism suited to how these assets actually behave.
The infrastructure never arrived
Every comparable on-chain asset class acquired this apparatus within months of reaching scale: lending markets, money-market yield, a metadata standard, and liquidation venues. Spot tokens, staked assets, and liquidity positions all followed the same path. Event contracts did not.
The reason is structural, not a matter of timing. The collateral behaves in ways that conventional overcollateralized lending is not built to handle. An event position is bounded between 0 and 1, reprices in discontinuous jumps as information arrives, loses liquidity at exactly the moments a lender would need to sell, attracts informed borrowers by construction, and terminates in a binary payoff that can erase collateral value in a single block.
Why a generic market fails
Each of those properties breaks an assumption that ordinary lending depends on. Bolting a generic lending market onto this collateral does not produce a credit market. It produces an insolvency mechanism with extra steps. The four properties and the design they force are covered in Why event collateral is different.