Key Highlights
- Galaxy Research identifies decision and impact markets as emerging categories beyond conventional prediction markets.
- Twenty-two DAOs use decision markets, with $50.5 million in assets under management, according to the report.
- Lightcone, Proof and If Market are developing impact-market products, several of which remain in beta or testnet.
Galaxy Research has identified decision and impact markets as emerging forms of event-based trading, allowing participants to price governance proposals and the potential effects of events on asset prices.
In a report published on October 15, research associate Zack Pokorny examined how these markets differ from conventional prediction markets, which typically focus on the likelihood of an event occurring.
The report examines decision-market activity among decentralized autonomous organizations (DAOs), emerging trading platforms, and financial products designed to hedge event-related risks. It also highlights the infrastructure and market conditions needed to support these products.
Decision markets target governance proposals
Decision markets use conditional trading to inform or determine binding organizational decisions, rather than simply forecasting external events.
Galaxy identified 22 DAOs using decision markets, with a combined $50.5 million in assets under management. Twenty-one operate within the MetaDAO ecosystem, which accounts for 78% of the reported total assets.
The report identified $35.8 million in stablecoins across these markets, with MetaDAO holding 82% of that value.
In September, Umia launched a decision-market launchpad for Ethereum Virtual Machine (EVM)-compatible chains. According to Galaxy, the platform supports multiple-outcome markets, allowing traders to price different proposal parameters rather than being restricted to a binary pass-or-fail outcome.
Impact markets price events’ effects on assets
Impact markets focus on how an event could affect an asset’s price, rather than only the probability that the event will occur. Galaxy’s report covered products from Lightcone, Proof, and If Market.
Lightcone publicly introduced its impact-market concept in October 2025 and remains in beta. The project is targeting a public launch before the end of 2026.
Proof has developed a testnet and appchain alongside an early version of its exchange. Galaxy reported that a trading competition attracted roughly 500 traders. The project was targeting a gated mainnet launch within the following one to two months.
Market has offered synthetic, cash-settled positions since September, with leverage of up to 10x on selected markets, according to Galaxy Research. Its first trading competition ended on September 30, attracting more than 2,000 traders and recording over six million trades. The platform remains in beta.
Infrastructure supports new hedging products
Galaxy also examined infrastructure projects and financial arrangements connected to conditional markets.
Branchpoint is developing Branchmap, a shared namespace for events and outcomes. Its initial design focuses on a single EVM-compatible chain, with cross-chain infrastructure planned as a longer-term goal.
The report described a structured swap arranged by Castle Technologies for Western Grazers, a California goat-herding operator. The business could receive about $500,000 if the state legislature failed to address a wage-related issue before an October 1 deadline.
The transaction used a back-to-back swap with Susquehanna and was routed through Kalshi’s prediction-market infrastructure. It linked a potential legislative outcome to a financial hedge for the business.
Separately, Galaxy reported that Derive’s monthly options notional volume rose from $1.47 billion in January to $3.82 billion in September. The figures reflect activity in Derive’s options market and do not establish demand for conditional markets specifically.
Prediction markets draw regulatory attention
U.S. lawmakers and regulators are examining how prediction markets should operate under federal law.
In September, Senate Democrats were seeking a public hearing on prediction markets as trading volumes increased and firms pursued broader event-based contracts.
In April, Paradigm was developing a prediction-market trading stack with potential features including indices, liquidity tools and a public data dashboard.
The regulatory treatment of conditional markets will depend on each product’s structure and function. The wider debate over prediction markets does not determine how regulators will classify every emerging category.
Liquidity remains a key challenge
Galaxy identified liquidity, product-market fit, trader demand, and efficient hedging as challenges for conditional markets. The report also discussed Statebook as a working paper rather than a live product.
Whether these markets expand will depend on their ability to attract sustained trading, support reliable pricing and settlement, and comply with applicable regulations.
Also Read: Crypto.com Launches Predict Pro for US Prediction Market Traders
