Every prediction market has a resolution date. Stock market does not. In that sense the prediction market "predicts" an external event on a particular date and

Every prediction market has a resolution date. Stock market does not. In that sense the prediction market "predicts" an external event on a particular date and this is the big difference. Stocks may rise of fall based on the perception of the market. A bet would get resolved based not on the perception of the people, but on the event itself. (or on the UMA dispute vote, but mostly the system is working). That's why it doesn't matter how skewed/wrong a particular bet is (like Trump chances). If your think that the market is wrong, you get a better return on your money. And the resolution date + smart contract creates the possibility to earn if you are correct.