Prediction markets claim to represent the future of Web3, but a serious issue is emerging: when KYC data becomes a "backdoor," informational symmetry is completely shattered.

On the surface, these platforms attract users by touting decentralization and resistance to censorship. But the core contradiction lies right here— to meet regulatory requirements, project teams must collect users' sensitive identity information. The problem is, this data is often kept like a sieve. Internal staff, partners, and even external attackers all have opportunities to access the correspondence between user addresses and real identities.

What are the consequences once the information leaks? Precise targeting. Knowing in advance which addresses belong to the project team itself allows for betting before major event results are announced, guaranteeing profit. You think you're competing with the market, but your opponents already know the answers. This isn't a matter of luck; the game rules have been tampered with.

Even more ironic, there are plenty of historical examples. From traditional exchanges to DeFi protocols, data leaks and internal malfeasance are common news. Why do we believe that the same KYC mechanisms suddenly become secure on the blockchain? That logic itself is flawed.

Project teams might claim data encryption, multi-factor authentication, and compliance audits. But these measures are just on-paper defenses. The real risks come from people—employee motivations, system administrator privileges, third-party integrity. These are vulnerabilities that technology can't prevent. No matter how sophisticated the protocol design or how advanced the oracles, the variable of "human nature" cannot be avoided.

Ultimately, the KYC system is a tool for project teams to put on a show for regulators. It satisfies compliance requirements but shifts all risks onto users. Users are asked to submit detailed identity information to gain market access, while also bearing the risk of this information being misused. This trade-off is never worth it.

So what should you do? If you want to participate in prediction markets, at least understand the costs involved. Platforms that require detailed KYC for core operations are essentially marking your identity. This mark isn't for your protection; quite the opposite. Be especially cautious when choosing—either look for platforms with better privacy protections or reduce your participation scale, treating this activity as a small-scale experiment rather than a main asset allocation.

The future of prediction markets doesn't have to be bleak, but users must stay alert. Decentralization and informational symmetry are not automatic; they require conscious effort from all participants in the ecosystem. Until then, every dollar entering such markets should prompt you to ask yourself: Do I really trust this platform?