Why is Solana's "crypto casino" shifting from memecoins to prediction markets?

Memecoin trading volume on Solana reached $13.9 billion last month, the lowest level since February 2024—before the memecoin craze exploded. While capital flows here are weakening, the two largest prediction platforms in the market are seeing record growth: Polymarket reached $3.7 billion, while Kalshi recorded $4.25 billion—its second-best trading month ever. In total, the prediction market processed nearly $8 billion, equivalent to 57% of Solana’s memecoin volume.

This ratio was once below 10% in August, then surpassed 45% in October, before surging to a majority in November. This is not just a matter of liquidity rotation, but raises the question of whether prediction markets will become the new infrastructure for crypto capital seeking an edge, or if they are merely a temporary destination for capital rotating according to narrative.

The Fatigue of Memecoins

Solana once saw a peak of $169.5 billion in memecoin volume in January, thanks to a constant stream of new tokens and intense volatility. Since then, activity has declined: $34.4 billion in July; $29.2 billion in August; $19.7 billion in September; $16.5 billion in October; and $13.9 billion in November—a 60% drop in just four months.

Notably, this was not a sudden collapse due to a rug pull or technical incident. The volume declined steadily, reflecting traders proactively reallocating capital to new channels instead of abandoning risk altogether.

While memecoins are being eroded, the prediction market is accelerating linearly: $1.8 billion in July; $1.9 billion in August; $4.1 billion in September; $7.4 billion in October; and $8 billion in November—a trendline almost completely opposite.

Prediction market volume as a percentage of Solana memecoin volume has soared from below 10% at the start of 2025 to 57% in November.## The Importance of Information

Vitalik Buterin views prediction markets as a layer of “information finance” infrastructure, where signals are extracted from the community’s distributed knowledge. This is something memecoins cannot provide, as their prices are often driven by hype and insider positions.

According to Buterin, AI will significantly drive this sector in the coming decade, as machine learning models are integrated directly into event contracts and DAOs operate these markets. The improvement loop—better models, tighter spreads, higher liquidity, more accurate signals—creates a growth trajectory that memecoins simply do not have.

Thomas Peterffy, founder of Interactive Brokers, even predicts that prediction markets could surpass the scale of the stock market within 15 years—a statement that is more of a strategic bet than a marketing pitch.

If that scenario plays out, the $8 billion in liquidity in November is just the humble beginning.

Capital Seeking Alpha in New Ways

The rapid shift between these two markets reflects different methods of generating alpha. Memecoins reward speed, social connections, and the ability to catch new tokens. Prediction markets reward deep data insight: voter models, geopolitical risk, Fed signals, macroeconomic developments.

Haseeb Qureshi (Dragonfly Capital) noted that Polymarket predicted the US election result earlier than major media outlets, quickly setting Donald Trump’s probability of victory at 97% by midnight. This wasn’t luck—it was the synergistic power of community knowledge.

Google then immediately integrated Polymarket probabilities into search results, completely changing public perception of prediction markets—from “fringe casinos” to “the most objective data source.”

A key difference is psychology. Losers in memecoin trading often admit they got dumped on. Losers in prediction markets can attribute it to probability misjudgment—a much easier story to accept.

Unanswered Questions

Despite rapid growth, prediction market liquidity still cannot support large institutional flows without significant slippage. Manipulation risk also exists, especially with small-volume contracts. Some recent debates revolve around influential figures’ statements unintentionally becoming market events—blurring the line between prediction and direct influence.

Meanwhile, memecoins haven’t disappeared. The $13.9 billion in monthly volume is still higher than most DeFi protocols and on par with many mid-tier centralized exchanges. The remaining participants are pure volatility chasers, where no “knowledge” layer is needed.

The liquidity migration reveals one clear thing: when the market seeks an edge instead of momentum, the capital moves. Whether that edge is real or just a new narrative will determine whether prediction markets reach the scale Peterffy envisions, or just become another exhausted cycle.

For now, capital has made its choice: the front line has shifted—and $8 billion has followed.

Vuong Tien