Coinbase-Backed Prophet: A Look Inside Limitless and Its Strategy to Win the Prediction Wars

If 2024 was the year prediction markets resurfaced as a mainstream crypto use case, 2025 is shaping up to be the year they professionalize. Volumes on on-chain venues surged during global elections and sports seasons, and the narrative shifted from “speculative side project” to “consumer-facing information markets with real utility.” Against this backdrop, Prophet—built by the team known as Limitless—has emerged on Base, the Ethereum Layer 2 incubated by Coinbase, positioning itself to compete with incumbents and newcomers alike. The question is not just whether Prophet can grow, but what strategy can win the prediction wars now that liquidity, compliance, and UX all matter.

This article examines how Prophet and Limitless are approaching the problem, why building on Base is a strategic advantage, and what it means for users and builders who care about real-time, credible markets.

Why prediction markets are having a moment

Three structural shifts have made prediction markets viable at consumer scale:

• Lower on-chain costs. Ethereum’s EIP-4844 (proto-danksharding) materially reduced data availability costs for Layer 2s, unlocking cheaper, more frequent transactions—critical for fast-moving markets where spreads and execution speed matter. See the overview on Ethereum’s roadmap for EIP-4844. Reference: EIP-4844 on ethereum.org
• More mature oracle options. Oracle design has advanced beyond price feeds to support binary and event-based resolutions, with both decentralized networks and optimistic approaches. For background, see Chainlink Data Feeds and the UMA Optimistic Oracle documentation.
• Consumer demand met liquidity incentives. On-chain prediction markets benefited from election-cycle attention and better market maker participation. For a sense of the category’s growth, track volumes and market counts on Polymarket via DeFiLlama’s protocol dashboard.

These changes reshape the competitive landscape: the winners in 2025 will need compliant market curation, deep liquidity routing, and a mobile-first UX that feels like a consumer app, not a DeFi dashboard.

What Prophet is and why Base matters

Prophet is a Base-native prediction market product built by Limitless to offer smooth, scalable markets with faster settlement and lower fees. Building on Base confers multiple advantages:

• Distribution and trust. Base is incubated by Coinbase and has become a high-signal hub for consumer crypto apps, with programs like Onchain Summer bringing mainstream users on-chain. Reference: Base’s Onchain Summer
• Cost and performance. With EIP-4844 live, Base inherits lower data costs from Ethereum while retaining EVM compatibility—ideal for high-frequency order flow.
• Fiat on-ramps and stablecoin depth. Coinbase’s ecosystem is a strong bridge for USDC liquidity and fiat on-ramps, which matter for consumer-grade UX. For context on stablecoin mechanics, see Circle’s USDC overview.

While “Coinbase-backed” can mean different things—from infrastructure support to grants or ecosystem alignment—building on Base is strategically relevant because it optimizes both acquisition and execution for a prediction venue.

Inside Limitless: architecture and product strategy

Limitless appears to be executing a playbook designed to scale prediction markets beyond crypto-native audiences:

• Hybrid liquidity and routing. Expect a mix of AMM-style pools for long-tail markets and order books or RFQ-style execution for popular markets where tight spreads matter. Liquidity routing across internal pools and external venues (where permitted) helps minimize slippage and improve fills.
• Intent-based execution. Instead of forcing users to micromanage gas, approvals, and slippage, intent layers can aggregate order flow and match counterparties. This approach reduces cognitive load and aligns with the “super app” trend on L2.
• Oracle diversity and fallback. Binary outcome markets need robust resolution. Blending decentralized oracles with optimistic mechanisms can reduce manipulation and allow for dispute resolution windows. See the oracle references for design trade-offs: Chainlink Data Feeds, UMA Optimistic Oracle.
• Compliance-first curation. Markets involving politics, financial events, or sports can be sensitive. The CFTC’s 2022 action against one event-based market sent a clear signal: curation and jurisdictional controls are not optional. Reference: CFTC press release
• Consumer UX out of the box. Expect smooth onboarding, USDC-denominated markets, readable odds, share-like positions with clean PnL, and mobile-friendly flows. Base’s ecosystem reduces friction, and Coinbase’s reach can amplify discovery.

Together, these decisions aim to remove the biggest friction points: fragmented liquidity, opaque resolution, and clunky UX.

The “prediction wars”: how Prophet can differentiate

To win in a crowded field, Prophet and Limitless will need to compete on four fronts:

1. Market quality and credibility
   Curate markets users care about, and resolve them cleanly and transparently. Clear rules, dispute windows, and published resolution sources improve confidence. Oracles must be diversified and well-documented. See the broader oracle design landscape via Chainlink and UMA.

2. Liquidity depth and routing
   Bring professional market makers on-chain, provide predictable incentives, and avoid fragmented pools. If Prophet can route orders across internal AMMs and off-chain market maker quotes (via secure intents), spreads can stay tight even during volatile events.

3. Regulatory posture
   Design listings to avoid prohibited event categories, and segment access by jurisdiction where necessary. The CFTC has taken actions in this vertical; even purely crypto-native apps must consider an evolving rule set. Reference: CFTC enforcement history

4. Distribution
   Base’s consumer gravity helps. Tapping Coinbase’s ecosystem—whether through content, grants, or wallet discovery—can turn Prophet into a default destination for on-chain predictions. Reference: Base

Risks and how Prophet could address them

• Oracle risk and disputes. Binary outcomes are adversarial during close calls. Emphasize transparent sources, clear thresholds, and well-incentivized dispute processes.
• Liquidity cliffs. Attention cycles can create boom-bust liquidity patterns. Stable incentive programs and market maker partnerships mitigate this.
• UX complexity. DeFi minutiae are a non-starter for mainstream users. Intent-based routing, batched transactions, and a clean mobile experience are essential.
• Regulatory uncertainty. Global differences in permissible event contracts require granular controls and careful market design. Regularly review public guidance from agencies like the CFTC.

What this means for builders and users

• Builders should treat prediction markets as an information product, not just a trading venue. Invest in data pipelines, event sourcing, and resolution transparency.
• Users should prefer venues that demonstrate reliable outcomes, rational spreads, and clear terms. Stablecoins and L2 architectures make active participation viable without prohibitive fees.

If you interact with Base-native apps like Prophet, self-custody remains best practice. A hardware wallet such as OneKey keeps private keys offline, supports EVM chains including Base, and integrates smoothly with common wallets and dApps—offering strong protection against phishing or transaction tampering while preserving the convenience of L2 DeFi. For users who plan to hold positions through event cycles, this combination of security and usability is particularly valuable.

Closing thoughts

Prediction markets are evolving from crypto curiosities into consumer-grade information tools. Limitless’s Prophet, built on Base, is well-placed to push the category forward if it can balance market quality, compliant curation, and liquidity routing with a frictionless UX. In 2025, the likely winners won’t just have the deepest liquidity—they’ll have the most credible outcomes and the smoothest on-ramps. As the market matures, expect Prophet and its peers to raise the bar on resolution transparency, dispute processes, and intent-driven execution, setting a new standard for on-chain predictions.