Opinion: Insider Information is Indeed the Key to Predicting the Market, Insiders Will Drive the Price to Converge with the Truth

BlockBeats News, April 26th. The prediction markets Kalshi and Polymarket are currently facing increased regulatory pressure, with law enforcement agencies from multiple countries and even local U.S. governments quickly paying attention and considering actions to ban insider trading. However, Robin Hanson, a professor at George Mason University and one of the founders of prediction market theory, believes that insider information is key to prediction markets, and strictly prohibiting insider trading is a mistake: "You need them to engage in insider trading to get the most accurate price, which is the purpose of prediction markets, to provide information for decision-making."

Robin Hanson points out that insider trading is widespread in traditional financial markets, and prediction markets rely on insiders to drive prices closer to the truth, surpassing news and polls. Hanson advocates for a moderate balance between insider trading and fairness, suggesting that organizations can protect secrets through contracts, but society also needs information flow and should not exclude ordinary people from participating in the market under the pretext of "elite control of information." Hanson suggests that participants take responsibility for their gains and losses, likening it to playing poker, and emphasizes that prediction markets are a democratic information aggregation tool, but not suitable for everyone.