Ukraine War Strategic Roadmap 2025: Scenarios, Odds, and Trading the Next Phase of the Conflict

Prediction markets have quietly rewritten the script of the Ukraine war. What was once priced as a high‑variance, counter‑offensive story is now trading like a long, grinding positional conflict in which the main questions are duration and drift—how long Ukraine can sustain the line, and how much territory Russia can nibble away.

Across major platforms, composite pricing now implies roughly:

• Low odds of a decisive Ukrainian battlefield victory by end‑2025 (full or near‑full liberation of occupied territory).
• Higher odds of a prolonged stalemate with front lines moving only a few percentage points either way.
• Non‑trivial odds of incremental Russian gains, especially in Donetsk and along key logistics axes like Kupiansk and Pokrovsk.

These are not academic distinctions. They drive:

• The fair value of war‑duration markets.
• The risk premia on European energy, defense, and reconstruction plays.
• The probabilities attached to sanctions fatigue, NATO posture shifts, and Russian domestic instability.

Yet market order books often reflect surface narratives—“stalemate,” “Russia grinding forward,” “Ukraine holding on”—rather than a structured view of what Kyiv and Moscow can realistically do in 2025.

From counter‑offensive dreams to positional reality

Expert assessments through late 2024 and early 2025 converge on a blunt fact: the war has become a positional, attritional contest.

• Russia fields ~600,000 troops in or near Ukraine and has expanded mobilization and industrial output.
• Ukraine, with 500,000–600,000 personnel in the field, faces mounting manpower strain and politically costly further mobilization.
• Western military assistance has fallen by ~40–45% since mid‑2025 versus the previous six months, eroding Ukraine’s artillery and air‑defense edge.
• Russia is mass‑producing Shahed‑type drones (around 35,000 per year, aiming for 40,000 by 2030), while estimates suggest drones now account for ~70% of casualties on both sides.

In this environment, a repeat of 2023‑style deep Ukrainian offensives is structurally disadvantaged. As one CNA analysis of Russian lessons puts it, the modern front is a “transparent battlefield” where large formations are quickly detected and destroyed by massed fires.

This is exactly the kind of regime where historical base rates warn that wars get stuck. On the Western Front in WWI, in Korea after 1951, and in much of the Iran–Iraq War, once fronts hardened into trenches and minefields, positional phases lasted 2–7 years, and major breakthroughs without overwhelming resource shifts were rare.

Markets are starting to price that history in—but not always coherently.

The three strategic families Ukraine can actually choose from

For traders, the key question for 2025 is not whether Ukraine wants to win decisively. It’s which strategic family Kyiv can plausibly pursue under real constraints of manpower, ammo, drones, and Western aid—and how Moscow and Western capitals will react.

Expert work from Carnegie, CSIS, RAND‑type analysts, and Ukrainian military thinkers suggests three broad strategic options:

1. Renewed offensive thrusts (large‑scale maneuver)

   • Objective: Break the stalemate, regain key terrain (parts of Donbas, the land bridge to Crimea), and reset negotiation terms.
   • Requirements: Restored Western firepower and air‑defense surpluses, a qualitative ISR/strike edge, and some degree of Russian operational disruption.
   • Market significance: Would sharply reprice Russian territorial control, war‑end‑by‑2025, and EU energy risk markets.

2. Positional warfare with active local counterattacks

   • Objective: Accept a mostly static front, focus on defensive attrition and selective local counteroffensives to impose disproportionate Russian losses and hold key nodes.
   • This is close to Ukraine’s de facto 2024–25 approach. It can hold the line, but on its own it does not resolve the time and demographics problem that favors Russia.
   • Market significance: Supports baseline pricing for a long war, with slow Russian advances and periodic Ukrainian tactical gains.

3. Deep fortified defense and ‘strategic neutralization’

   • Objective: Turn Ukraine into a “steel porcupine”—a deeply fortified, drone‑saturated defense that makes large Russian offensives futile, while systematically degrading Russia’s ability to wage high‑intensity war.
   • Carnegie labels this a “new theory of victory: strategic neutralization”—seeking to paralyze, not necessarily destroy, Russia’s offensive capacity.
   • Market significance: Points to very long war‑duration tails, but also to more bounded territorial risk and a different profile of Western aid (infrastructure, industry, drones, fortifications).

These are not mutually exclusive on the ground; Ukraine may blend them sector by sector. But for markets, you must decide which family is dominant over the next 12–24 months, because each carries a different distribution of outcomes for territory, casualties, aid flows, and diplomatic timing.

The core analytical problem this roadmap tackles

The rest of this report is built around a single question:

Given battlefield constraints, Western aid trajectories, and Russian rearmament plans, what is the realistic path of the war in 2025—and how does that path shape the timing and odds of any diplomatic settlement?

To answer it in a way traders can actually use, we will:

• Define concrete 2025 scenarios around the three strategic options above, with explicit conditions and territorial implications.
• Map key indicators (mobilization laws in Kyiv and Moscow, Western aid votes, Russian production data, drone‑strike patterns) that signal which scenario is becoming more likely.
• Anchor expectations in historical base rates from prior positional wars—how long stalemates tend to last, how often major offensives succeed, and what typically triggers negotiations.
• Translate scenarios into market views, from direct war markets (territory by date, war‑end timing) to second‑order assets (European gas, defense equities, Ukrainian reconstruction, Russian risk premia).

In short, this roadmap is about turning a vague “stalemate” narrative into a structured, probabilistic view of Ukraine’s 2025 strategic choices—and giving you a framework to trade them before the rest of the market catches up.

To turn the three strategic families into tradeable scenarios, you need a clear picture of the 2025 baseline: what the war’s structure actually allows either side to do. That baseline is set by three hard realities—manpower, firepower/industry, and the emergence of a “transparent battlefield”—that together make slow, positional attrition the default setting for the coming year.

1. Manpower: Ukraine is stretched; Russia is scaled for a long war

After three years of high‑intensity fighting, Ukraine’s most binding constraint is people.

• Kyiv has mobilized a very large share of its draft‑age male population. President Zelenskyy has cited ~880,000 active personnel, with roughly half a million-plus tied directly to frontline operations.
• Casualties, rotations, and long tours mean there is limited slack in the system; combat brigades report chronic shortages of infantry and key specialists.
• Further mobilization is politically toxic: lowering the draft age, tightening exemptions, and extending service have already provoked visible social resistance and become a central fault line in Ukrainian politics.

In other words, Ukraine can probably hold its existing force levels, but scaling up significantly in 2025 is costly and slow, both politically and operationally.

Russia, by contrast, has restructured for mass and duration:

• The active‑duty force has expanded to around 1.1 million, with roughly 600,000 personnel in or around Ukraine.
• Moscow has blended partial mobilization, contract recruitment, prisoner units, and foreign volunteers into a sustainable pipeline that can replace heavy losses without visible political crisis.
• The 2025 defense budget is projected around $145 billion (≈6.3% of GDP), supporting continued expansion of ground forces and auxiliaries.

This does not mean Russian manpower is limitless or cost‑free. But compared to Ukraine, Russia’s political and demographic space to keep feeding the front is larger, and that asymmetry underpins most expert skepticism about large Ukrainian offensives in 2025.

2. Firepower and industrial adaptation: Russia’s overlapping edge

The second constraint is who can generate and sustain firepower—artillery, missiles, and increasingly, drones.

Ukraine has massively expanded its own defense industry, and Ukrainian officials speak of producing 2.2 million drones in 2024 with a target of 4.5 million in 2025. That helps offset infantry shortages and enables constant tactical innovation.

But Russia has built a broader, overlapping edge:

• A war‑time budget nearly three times Ukraine’s ($145B vs. ~$53.7B planned in 2025) allows sustained spending on shells, armor repair, and long‑range strike.
• Analysts estimate Russia is mass‑producing tens of thousands of Shahed‑type loitering munitions annually and scaling up FPV production.
• Western assessments increasingly describe Russia as “winning the drone war” at the operational level—combining reconnaissance drones, FPVs, and loitering munitions with improving electronic warfare (EW) and small‑unit tactics.
• Multiple studies now suggest around 70% of casualties on both sides are driven by drones, directly or indirectly, via targeting for artillery.

At the same time, Western military aid has plateaued or fallen. European think‑tank work indicates a ~40–45% drop in new military commitments since mid‑2025 compared with the previous six months, and US packages are more intermittent and politically contested.

The net effect is that Ukraine can keep fighting and innovating, but reconstituting a large, artillery‑heavy offensive punch in 2025 looks difficult without a decisive aid inflection. Russia, conversely, can continue to trade shells, infantry, and drones for modest territorial gains at acceptable (to the Kremlin) political cost.

3. The transparent battlefield: why big maneuvers keep failing

Zaluzhnyi’s line captures the third structural feature: the transparent battlefield.

By 2025, both sides operate under near‑continuous surveillance:

• Cheap UAVs, commercial satellite imagery, SIGINT, and ground sensors mean that battalion‑scale movements are quickly detected.
• Russian forces, in particular, have improved the sensor‑to‑shooter chain: spotting, geolocating, and engaging Ukrainian units with artillery, glide bombs, and FPV swarms within minutes.
• Extensive minefields, trenches, and concrete fortifications—mapped in detail by OSINT and satellite analysis—channel any attacking force into predictable kill zones.

In this environment, classical armored breakthroughs of the 2022 or 2023 variety are structurally penalized, especially for the side with less mass and less airpower.

Historical base rates line up with what we are seeing:

• On the WWI Western Front, once the line solidified, it remained largely static for 3+ years despite repeated, costly offensives.
• In Korea after 1951, a fortified front around the 38th parallel held for two years until the armistice.
• In the Iran–Iraq War, a trench‑and‑minefield stalemate persisted for most of eight years, with major offensives rarely shifting the line.

Modern ISR and drones make today’s battlefield even more exposed than those historical cases. The burden of proof is now on anyone arguing for a swift, deep breakthrough—the base case is structural stalemate with localized advances.

4. What this baseline implies for 2025 scenarios

Combine these three constraints and the 2025 picture comes into focus:

• Ukraine is manpower‑constrained and politically limited in how much more it can mobilize.
• Russia is resource‑advantaged, with greater room to recruit, spend, and absorb losses.
• The transparent, fortified battlefield systematically punishes large, exposed offensive groupings.

Under that baseline, large‑scale Ukrainian offensives in 2025 have a low probability of success unless something big changes: a major surge in Western artillery and air‑defense stocks, a step‑change in Ukrainian ISR/strike advantages (e.g., long‑range precision plus superior EW), or serious disruption inside Russia.

Absent such a shock, the most likely regime is positional warfare with incremental Russian advances—measured in small salients and village‑by‑village fights rather than sweeping arrows on the map.

5. Trading the baseline: drift on the map, jumps in politics

For prediction markets, this changes what “surprise” looks like.

• The front line is now a slow‑moving variable. In Q4 2024, ACAPS estimates Russian forces gained roughly 500 km²—material for Ukrainians on the ground, but marginal relative to a 1,000‑km front and the early‑war swings of 2022.
• Historical analogues suggest positional phases lasting 2–7 years with few successful large breakthroughs absent massive resource imbalances.

That means:

• Territorial control markets (e.g., “Russia to control city X by date Y”) should, in the baseline, price in gradual drift, not dramatic map changes, unless linked to visible shifts in mobilization or aid.
• War‑end‑by‑date markets should treat a 2025 political settlement as an out‑of‑consensus event unless you can point to credible catalysts—Western pressure, Russian domestic crisis, or a discrete battlefield collapse.
• Policy and political shocks—US or EU aid packages, new sanctions on Russian industry, mobilization laws in Kyiv or Moscow—are now the main candidates for jump risk in prices, because they are the few levers that can actually alter this structural baseline.

In short, going into the scenario work that follows, the working assumption should be: 2025 is structurally a slow, positional contest, with Russia grinding for marginal gains and Ukraine trying to hold the line and trade space for time. Any strategy that promises quick, decisive change has to explain how it breaks out of these baseline constraints—and that is what the next sections will test.

Western firepower is the single lever that can still bend the 2025 baseline you’ve just seen. Manpower and the transparent battlefield are structurally hard to change; aid flows can move much faster. But the story of 2022–2025 is not one of endless escalation. It is a surge, a plateau, and now a codified floor—one that stabilizes Ukraine’s defense while capping the odds of large, risk‑seeking offensives.

1. The numbers: a €400 billion surge that has already peaked

According to the Kiel Institute’s Ukraine Support Tracker, total Western commitments to Ukraine from 2022–2024 reached roughly €399.8 billion. Two pillars dominate:

• United States: ~€119 billion total, with about €65.6 billion in military aid and the rest financial and humanitarian.
• EU institutions (not counting member states): €95.6 billion, heavily weighted toward loans and budget support rather than weapons.

The composition over time matters more than the headline sum:

• Military aid surged in 2023 to about €49.6 billion, then declined to ~€42 billion in 2024.
• Financial/budgetary aid rose steadily (about €32.3B in 2022 to €50.8B in 2024), underwriting Ukraine’s state and war economy.

This is the essence of the “from surge to plateau” shift:

• 2022–23: large, episodic military packages (HIMARS, tanks, long‑range missiles) designed to change the battlefield balance.
• 2024 onward: more predictable but smaller annual flows, focused on keeping the lights on, filling ammo gaps, and shoring up air defense.

For 2025, the forward guidance from NATO and the EU looks less like a new surge and more like institutionalization of a floor—a stable, politically defensible level of support rather than another leap.

2. The US: indispensable firepower, exposed to partisan shocks

The United States remains the indispensable military backer for Ukraine:

• Of the ~€119B total US commitment by end‑2024, about €65.6B is military, and over 95% is already allocated.
• In 2022, US military aid amounted to roughly 112% of Ukraine’s pre‑war defense budget; by 2024 that ratio had fallen to ~79%, partly because Ukraine ramped its own defense spending but also because US flows were choppier and more contested.

The late‑2024 and early‑2025 supplemental fights exposed how much US policy has become a binary risk factor for the entire war trajectory:

• Large packages now require separate supplemental bills rather than riding along in consensus spending.
• House and Senate majorities are narrower and more polarized; Ukraine aid is increasingly bundled with domestic border policy, Israel aid, and broader partisan agendas.
• During the 2024–25 delays, Ukrainian units reported rationing artillery and air‑defense interceptors; Russia visibly increased pressure around Kupiansk and Pokrovsk in the same window.

For markets, this creates a “gap risk” structure:

• The US can still unlock single‑year additions in the tens of billions for weapons, training, and sustainment.
• But the decision to do so is subject to lumpy, partisan‑driven votes, with real probability of months‑long pauses.

In practical terms, that means the probability of any renewed Ukrainian large‑scale offensive (Option A) is almost inseparable from the odds of a new, front‑loaded US surge package. Without that, the US role shifts toward sustaining the baseline rather than rearming Ukraine for high‑risk maneuver.

3. Europe: financial backbone and slow‑moving military backfill

On the European side, EU institutions and member states together now rival US totals, but the mix skews differently:

• EU institutions alone have committed €95.6B (2022–24), mostly as financial and macro‑support. A new Ukraine Facility worth roughly €50+ billion through 2027 codifies this role.
• European Peace Facility (EPF) and national programs (Germany, UK, Nordics, Eastern Europeans) add tens of billions in military aid, training for over 80,000 Ukrainian personnel, and long‑term contracts for ammunition and air defense.
• The G7’s plan to mobilize about $50B in loans backed by interest on frozen Russian assets—with the EU delivering a significant share—adds a new, sanctions‑linked funding stream starting in 2025.

The trade‑off: more predictability, slower disbursement, and stronger conditionality.

• EU macro‑support is tied to reform benchmarks and integration steps; funds move in tranches, not emergency waves.
• EPF top‑ups, the Ukraine Facility, and asset‑based loans must navigate complex EU decision‑making, requiring consensus or large‑state buy‑in.
• National parliaments face their own fiscal constraints and competing priorities (defense rearmament at home, energy transition, migration).

Europe can backfill part of a US slowdown, especially on economic support and ammunition over a multi‑year horizon. But in 2025 it is unlikely to independently stage a sudden, 2023‑style re‑armament surge.

This institutional architecture is structurally aligned with Option B (positional warfare with local counterattacks) and Option C (fortified “steel porcupine” defense): steady funding for drones, shells, fortifications, and Ukrainian industry. It is poorly aligned with Option A’s demand for large, time‑compressed deliveries of armor, engineering assets, and air‑power enablers.

4. From spikes to baselines: NATO’s €40B+ floor

One of the most consequential but under‑traded developments is NATO’s move to a formal minimum baseline:

• Allies have pledged at least €40 billion per year in military support to Ukraine.
• In 2024, NATO countries actually exceeded this, with over €50B committed, of which around 60% came from European allies and Canada.

This transforms aid from a succession of peaks and valleys into something closer to a strip of annual coupons:

• Ukraine can plan force structure, training, and procurement around a known floor.
• Donors can defend the policy domestically as burden‑sharing embedded in NATO, not ad hoc generosity.

But a floor is not a ramp:

• The baseline likely stabilizes Ukraine’s defensive capacity—air defense, artillery ammunition, drones, and basic rotation of units.
• It is not obviously sufficient to rebuild the large, high‑readiness offensive formations (armored brigades, heavy engineer assets, air support) needed to reliably crack Russian fortifications under a transparent sky.

In other words, codified aid floors anchor the probability of Ukraine holding roughly current lines, but they do not by themselves raise the probability of big map‑changing offensives.

5. Politics and public opinion: a bias toward “sustain, not escalate”

Behind these numbers sit voters and finance ministries.

Across the US and major European states, polling still shows pluralities in favor of supporting Ukraine, but with:

• A declining share backing “support for as long as it takes”.
• Rising concern about domestic economic pressures and a preference for diplomatic solutions over further escalation.

Fiscal reality reinforces this sentiment:

• The US faces sustained deficits and partisan fights over overall discretionary spending.
• Europe is trying to simultaneously rearm, decarbonize, and meet social‑spending promises under tighter budget rules.

The politically low‑friction position for many governments is therefore:

• “We will not let Ukraine lose, but we will not dramatically escalate either.”

Structurally, that is exactly what Options B and C look like. Option A—another big offensive bid—requires politicians to argue for higher near‑term risk, higher costs, and higher escalation potential, just as public attention is drifting.

Stoltenberg’s line captures the elite logic sustaining the plateau: failure is unacceptable, but the politically viable way to avoid it is a contained, predictable commitment, not open‑ended surges.

6. Why traders should treat aid trajectories as the main exogenous driver

Bringing this back to markets, Western aid is the primary exogenous variable capable of shifting the 2025 war regime away from the positional baseline described earlier.

You can think of three broad aid paths and their implications:

1. Re‑acceleration / new surge

   • Trigger: A large US supplemental combined with expanded EPF/NATO commitments, or a shock event (Russian atrocity, strategic breakthrough) that unlocks political will.
   • Market impact:
     • Upward repricing of Ukrainian offensive success odds (territory‑by‑date and war‑end‑by‑2025 markets).
     • Higher risk premia on Russian assets and European energy if escalation risks rise.

2. Sustained plateau (current base case)

   • Trigger: NATO €40B+ floor holds; EU Facility and asset‑backed loans disburse on schedule; US maintains, but does not expand, its support envelope.
   • Market impact:
     • Baseline for a long war with slow territorial drift and low odds of a decisive outcome by end‑2025.
     • War‑duration markets tilt toward multi‑year timelines; reconstruction and Ukrainian risk assets remain heavily discounted but not priced for collapse.

3. Erosion / shock cut‑off

   • Trigger: US political reversal on Ukraine aid, major EU blockage, or severe domestic crisis in a key donor.
   • Market impact:
     • Sharp repricing toward Russian incremental gains and higher odds of Ukrainian territorial setbacks.
     • Increased probability of forced or unfavorable negotiations within a shorter horizon.

In portfolio terms, you should treat aid votes, NATO pledges, and EU funding milestones the way you would treat central‑bank meetings in macro trading: scheduled events with asymmetric optionality around the current baseline.

The next sections will translate this aid‑constrained environment into concrete 2025 war scenarios—then map exactly which political and battlefield indicators (including aid decisions) should move your odds for each.

The Front Line Going into 2025: Positional Geometry and the Fortification Race

To translate aid trajectories and force balances into tradeable views, you need to see where those resources interact on the map. By late 2024, the Ukraine war had hardened into a thousand‑kilometre arc of trenches, minefields, and fortified towns—a landscape that structurally favors incremental drift, not sweeping arrows.

4.1 The late‑2024 front: a thousand‑kilometre arc with slow Russian drift

By Q4 2024, the front line ran in a broad curve:

• From northern Kharkiv oblast near the Russian border, past Kupiansk and the Oskil River.
• Southeast through the Svatove–Kreminna sector in Luhansk and down to Bilohorivka on the Siverskyi Donets.
• South through Bakhmut–Chasiv Yar–Toretsk, then the Avdiivka–Ocheretyne–Pokrovsk axis, and further to the Vuhledar–Kurakhove area in central Donetsk.
• Southwest across the Velyka Novosilka–Staromaiorske line into Zaporizhzhia, where the front bulges around the Robotyne–Verbove salient.
• Finally along the Dnipro River in Kherson, with Russia mostly on the east bank and Ukraine on the west, plus small, contested Ukrainian bridgeheads.

ACAPS estimates Russian forces gained roughly 500 km² in Q4 2024—more than in all of 2023, but still marginal compared with a front that stretches roughly 1,000 km and an occupied area of about 20% of Ukraine’s territory. Most of those gains cluster around a few critical sectors, which will anchor 2025‑relevant markets.

4.2 Strategic hot spots for winter 2024–spring 2025

Kupiansk–Borova: pressure on Ukraine’s northeast logistics

In Kharkiv oblast, Russian forces intensified pressure around Kupiansk and along the Oskil River, stepping up attacks northeast of the city and pushing toward Borova from the Dvorichna and Izium directions. By December 2024, ACAPS reporting placed Russian troops roughly 14 km from Borova, threatening a key junction for Ukrainian supply routes linking Kupiansk, Lyman, and the broader Donbas front.

• Russian objective: Create a buffer in northern Kharkiv and, in a best‑case scenario, roll the line back toward Izium, opening options against Sloviansk–Kramatorsk from the north.
• Ukrainian objective: Hold Kupiansk–Oskil as a logistical shield and prevent a forced withdrawal to deeper lines further west.

For prediction markets, this axis matters because a Russian move that forces Ukraine off the Oskil toward Borova/Izium would signal a step change in Ukrainian fragility in the northeast, with knock‑on risk for Lyman and Siversk.

Svatove–Kreminna–Bilohorivka: last town in Luhansk

Further south, the Svatove–Kreminna line remains heavily contested. Russian attacks in late 2024 concentrated on villages like Hrekivka and Makiivka, aiming to push Ukrainian forces back from the Luhansk–Kharkiv boundary.

The focal point is Bilohorivka, described by ACAPS as the last Ukrainian‑held town in Luhansk oblast. Its fall would:

• Complete Russia’s formal control of Luhansk.
• Open an axis toward Siversk, and ultimately toward Sloviansk–Kramatorsk.

Bilohorivka is strongly fortified and covered by Ukrainian artillery from the west bank of the Siverskyi Donets. But Russian persistence here makes it a binary geopolitical marker: any verified loss of Bilohorivka is an obvious trigger for Luhansk‑by‑date and Donbas‑control markets.

Bakhmut–Chasiv Yar: gateway heights to Kramatorsk

After taking Bakhmut in 2023, Russia has used 2024 to grind forward toward Chasiv Yar and Toretsk. By late 2024, Russian units were pushing into suburbs and outlying villages, fighting block‑by‑block.

Why it matters:

• Chasiv Yar sits on elevated ground that dominates routes to Kostiantynivka, Druzhkivka, and Kramatorsk—the core Ukrainian urban/industrial cluster in Donetsk.
• If Russia secures the town and adjacent heights, it gains better artillery observation and positions for a broader push on the Sloviansk–Kramatorsk agglomeration.

For markets, the Bakhmut–Chasiv Yar line is less about individual villages and more about whether Russia crosses the ridge and can regularly shell Kramatorsk and Druzhkivka with tube artillery. That transition point is where probabilities for Russian‑control‑of‑Kramatorsk‑by‑date-Y markets should start to move.

Avdiivka–Ocheretyne–Pokrovsk and Vuhledar–Kurakhove: central Donetsk hinge

Following the fall of Avdiivka in February 2024, Russian forces spent the rest of the year pushing west and northwest through Ocheretyne and surrounding settlements toward the Pokrovsk area. Parallel efforts in the south captured Vuhledar in Q4 2024 and opened pressure on Kurakhove.

ACAPS highlights:

• Intensified clashes in Pokrovskyi and Kramatorskyi raions.
• Russian gains around Vuhledar, creating a salient menacing Kurakhove and nearby energy infrastructure.

Operationally, Pokrovsk–Kurakhove is a new Ukrainian defensive belt anchoring central Donetsk. If Russia can push artillery into consistent range of Pokrovsk rail and road junctions, it would weaken Ukrainian lateral mobility between the Donbas front and Dnipro oblast.

From a trading standpoint, most central‑Donetsk markets should focus less on “capture of Donetsk oblast by end‑2025” (still low‑probability) and more on incremental milestones: confirmed Russian presence near Pokrovsk’s outer suburbs; loss of Vuhledar‑adjacent high ground; visible Ukrainian withdrawals to pre‑planned second lines.

Robotyne–Verbove salient: the southern testing ground

In western Zaporizhzhia, the 2023 Ukrainian counteroffensive created a salient around Robotyne–Verbove, breaching the first layer of Russian strongpoints but stalling short of Tokmak. By late 2024, ISW mapping showed Russia regaining some tactical ground, nibbling at the flanks and narrowing the salient but not erasing it.

This remains the best‑studied example of Russia’s southern defenses:

• Satellite imagery and OSINT analyses (e.g., AEI/Brady Africk, Planet Labs) document multi‑layer trench lines, anti‑tank ditches, and “dragon’s teeth” obstacles extending toward Tokmak and Melitopol.
• Dense minefields, some tens of kilometers deep, were the primary factor slowing Ukraine’s 2023 push.

For 2025, this sector is less about renewed Ukrainian offensive prospects (low without a major aid surge) and more about whether Russia can gradually roll back Ukrainian positions toward Orikhiv, which would reduce Ukraine’s leverage over the land‑bridge corridor.

The Dnipro in Kherson: frozen but not irrelevant

Along the Dnipro River, Ukraine holds the west bank and a handful of small, high‑risk bridgeheads on the east bank. Russian artillery, drones, and aviation make sustained expansion there difficult; Ukrainian raids are tactically useful but unlikely to generate operational breakthroughs under current constraints.

Markets should treat left‑bank Kherson as a noise‑heavy but structurally secondary theater for 2025 unless you see:

• Evidence of a large Ukrainian bridging and air‑defense build‑up; or
• Russian redeployments that visibly thin defenses along the river.

4.3 The fortification race: Surovikin lines vs. “Fortress Ukraine”

Open‑source imagery shows that the front going into 2025 is not just long—it is deeply engineered.

On the Russian side, especially in the south:

• Reuters and AEI/Planet Labs analysis of 2023–24 imagery identified hundreds of kilometres of trench lines and multiple defensive belts (anti‑tank ditches, dragon’s teeth, berms, dug‑in firing points) from Zaporizhzhia down to Melitopol and east toward Mariupol.
• Many sectors feature three or more distinct lines, with the densest concentrations exactly where any Ukrainian attempt to cut the land bridge to Crimea would have to pass.
• Extensive mine belts—laid and then repeatedly refreshed since 2022—are now mapped and cross‑registered with Russian artillery and drone kill zones.

Ukraine, which went into 2022 with relatively light field works, has spent 2023–24 catching up:

• Kyiv launched a national fortification program focused on key urban and logistical nodes—Kharkiv, Sloviansk–Kramatorsk, Pokrovsk–Kurakhove, Zaporizhzhia, Kryvyi Rih, Odesa, and approaches to Kyiv itself.
• Ukrainian officials speak of thousands of kilometres of trenches, bunkers, and anti‑vehicle obstacles built or reinforced since mid‑2024, often using precast concrete and modular shelters to speed construction.
• These lines are increasingly integrated with drone observation posts, camouflaged artillery positions, and pre‑registered artillery fires.

The result is a two‑sided fortification race that has locked much of the front into positional warfare. As one CNA assessment of Russian lessons notes, the modern front has become a “transparent battlefield”: any significant force concentration is quickly detected by drones or satellites and then engaged by massed fires.

4.4 How trenches and drones constrain 2025 options—and what that means for prices

Fortifications matter for markets because they change what is realistically tradable on the territorial map.

• Deep, layered defenses plus heavy mining make it extremely costly to advance more than a few kilometres without a large and sustained firepower and electronic‑warfare advantage.
• The side on the tactical defensive can often trade ammo and drones for enemy manpower and vehicles at a favorable ratio—especially in urban and wooded sectors like Chasiv Yar, Toretsk, or the Pokrovsk approaches.
• Any attempt at a 2022‑style sweeping offensive has to telegraph itself weeks in advance (force build‑up, logistics dumps, air‑defense shifts), giving the defender time to reinforce.

Under these conditions, the most price‑relevant 2025 events are not grand offensives but local positional shifts around key nodes:

• Kupiansk/Borova: Does Russia force Ukraine back from the Oskil and threaten Izium‑bound logistics?
• Bilohorivka/Siversk: Does Ukraine hold the last town in Luhansk, or does Russia achieve a symbolic oblast “completion”?
• Chasiv Yar: Does Russia secure the heights that unlock regular shelling of the Kramatorsk cluster?
• Pokrovsk–Kurakhove line: Can Ukraine consolidate this as a durable new belt after the loss of Avdiivka and Vuhledar?
• Robotyne–Verbove: Does the Ukrainian salient survive, shrink, or collapse back toward Orikhiv?

For territory‑by‑date markets, that suggests you should:

• Down‑weight scenarios that require Russia to rip through multiple fortified belts and capture entire oblasts within 12–18 months, absent a visible collapse in Ukrainian manpower or Western aid.
• Up‑weight contracts tied to incremental Russian gains—measured in individual towns or small clusters—that sit directly on these axes.
• Pay close attention to Ukrainian fortification milestones (new defensive lines completed, urban belts fortified) as signals that Kyiv intends to trade space for time rather than contest every forward village.

For war‑end and negotiation‑timing markets, the fortified map reinforces the earlier baseline: without a major exogenous shock in aid, technology, or Russian domestic politics, 2025 is set up as a slow, attritional contest over these specific nodes, not a year of decisive breakthroughs.

The next sections will take this positional geometry and layer on concrete 2025 scenarios—from renewed offensive bids to deep fortified defense—and spell out the indicators that should make you move your odds for each.

Option A – Renewed Offensive Thrusts: Low-Probability, High-Impact Tail Risk

Coming out of Sections 2–4, the 2025 battlefield is a fortified, transparent, manpower‑constrained environment. Within that structure, Option A – a renewed Ukrainian bid for large, 2023‑style offensives – is technically imaginable but strategically disfavored. For traders, that combination makes it a classic tail scenario: unlikely under current inputs, but powerful enough to reprice multiple markets if it starts to materialize.

5.1 What “Option A” really means in 2025 conditions

Conceptually, Option A is not about occasional local counterattacks (which Ukraine will keep doing). It means Kyiv committing to one or more theater‑level offensive campaigns designed to break the stalemate and significantly redraw the map.

In practice, analysts usually frame three potential axes:

• Donbas break‑in (north/central)
  A push in the Bakhmut–Chasiv Yar–Toretsk belt aimed at rolling back Russian gains and ultimately threatening the Sloviansk–Kramatorsk agglomeration from the east or southeast. This would mean:

  • Rebuilding mechanized brigades for combined‑arms assaults into dense urban defenses.
  • Forcing crossings and advances under Russian artillery, FPV swarms, and glide‑bomb coverage.

• Southern land‑bridge attack (Tokmak–Melitopol axis)
  A renewed thrust from the Robotyne–Verbove area toward Tokmak and then Melitopol, with the objective of severing or at least firing‑controlling the land bridge to Crimea. That implies:

  • Breaching multiple Russian defensive belts (minefields, anti‑tank ditches, trenches) documented by OSINT and satellite imagery.
  • Sustained offensive tempo over tens of kilometres, not just isolated tactical gains.

• Lower‑probability Dnipro crossing expansion (Kherson)
  A large attempt to expand Ukrainian bridgeheads on the left bank of the Dnipro into an operational lodgement threatening Russian positions in Zaporizhzhia and Crimea from the west. Given Russian air and artillery dominance there, most expert work treats this as even less plausible than the land‑bridge option without a step‑change in air defense and aviation.

All three variants collide with the same structural problem you saw in the baseline sections: Russia has more mass, deeper fortifications, and a better‑resourced ISR/strike complex, while Ukraine is constrained in manpower and dependent on plateauing Western aid.

5.2 Why expert consensus sees large offensives as structurally disadvantaged

Across CNA, CSIS, Carnegie, European think‑tanks, and Ukrainian officers themselves, the assessment is converging:

• The front is a "transparent battlefield": large armored concentrations are quickly detected by drones, satellites, and SIGINT and then hit by massed artillery, FPVs, and glide bombs.
• Russia’s answer has been to lean into mass and suppression – more infantry, more tubes, more drones, more EW – accepting high losses to grind forward.
• Ukraine cannot copy this model at scale: it lacks Russia’s mobilization depth, industrial base, and especially airpower.

Carnegie’s work on “strategic neutralization” and CSIS analyses of the drone war both argue that in this environment classical combined‑arms breakthroughs are structurally penalized, especially for the side with fewer people and fewer shells. CNA’s study of Russian lessons reaches a similar conclusion: as ISR coverage grows, the cost of moving large formations without air superiority explodes.

Ukraine’s own top commanders do not dispute this. Valerii Zaluzhnyi’s 2023 essay on modern positional warfare, which has aged very well into 2025, bluntly argued that without a technological shift, attempts at big maneuver will simply feed the attritional machine.

5.3 The transparent battlefield: why Ukraine can’t just “do 2023 again”

The key asymmetry for Option A is not will, but exposure:

• Detection: Battalion‑ or brigade‑sized Ukrainian build‑ups for an offensive would be visible in commercial satellite imagery and frontline UAV feeds weeks in advance. Russian units already use small drones to spot even platoon‑sized movements.
• Targeting cycle: Russian forces have shortened the sensor‑to‑shooter loop. Once an attacking column is located, FPVs, tube artillery, rocket artillery, and glide bombs can be queued on it within minutes.
• Air and EW deficit: Russia can increasingly mask its own concentrations with EW and aviation, while Ukraine lacks the aircraft, SEAD capability, and deep EW coverage to provide comparable protection for its attackers.

That is why most serious 2024–25 assessments treat large Ukrainian offensives as high‑risk, low‑expected‑value investments under current conditions: they expose scarce, high‑quality Ukrainian units to the full weight of Russia’s overlapping advantages.

5.4 The conditional triggers: when Option A becomes more than a thought experiment

Still, Option A is not impossible. Analysts now frame it as a conditional option that becomes more credible only if several things change together:

1. Western firepower re‑acceleration
   Ukraine would need a new surge, not just the NATO €40B floor:

   • A large US supplemental restoring surpluses in 155mm ammunition, air‑defense interceptors, and precision rockets (HIMARS/MLRS).
   • Additional armored brigades and engineering assets (breach teams, bridging, mine‑clearing vehicles) delivered and integrated, not just promised.
   • Expanded long‑range strike (ATACMS, Storm Shadow/SCALP, potentially Taurus‑type munitions) to dismantle Russian logistics hubs and artillery concentrations in the depth before any ground push.

2. Restored Ukrainian qualitative edge in drones/ISR
   Ukraine’s plan to ramp domestic drone output to 4.5 million units in 2025 is necessary but not sufficient. To make Option A credible, Kyiv would also need:

   • A clear edge in FPV and reconnaissance drone quality, range, and networking.
   • More effective EW to blind Russian UAVs over key sectors, creating temporary “ISR shadows” where larger formations can assemble and maneuver.
   • Better integration of satellite/airborne ISR with artillery and missile fires, allowing Ukraine to pre‑emptively attrit Russian reserves before they can react to a breakthrough.

3. Serious Russian operational or political disruption
   Option A’s upside grows if Russia is temporarily off‑balance:

   • A failed Russian offensive that leaves depleted units and overextended salients.
   • Major unrest or elite infighting in Moscow, distracting command and delaying reinforcement decisions.
   • Disruptive Ukrainian deep‑strike campaigns (against rail nodes, ammo depots, energy infrastructure) that temporarily lower Russian firepower density on a chosen sector.

Without at least two of these three conditions, large offensives remain what they look like in late 2024: strategic lottery tickets with bad odds.

5.5 How traders would see Option A forming in real time

From a trading perspective, the value in Option A is not in debating it abstractly, but in defining observable indicators that this tail is starting to wag the dog.

Concrete early‑warning signs include:

• Legislative and budget signals

  • Passage of a front‑loaded US supplemental explicitly tied to “enabling Ukrainian offensive operations,” with heavy emphasis on armor, engineers, and deep‑strike rather than just air defense.
  • NATO announcements that push annual support well above the €40B floor for 2025–26, particularly if earmarked for offensive enablers.

• Force‑structure and posture signals

  • OSINT evidence of Ukrainian armored brigades being reconstituted away from the line, with new Western equipment and intensive combined‑arms training.
  • Large Ukrainian stockpiles of bridging equipment, mine‑clearing systems, and pontoon assets appearing in staging areas near Zaporizhzhia or Donbas.
  • A spike in Ukrainian shaping operations: systematic long‑range strikes on Russian command posts, logistics nodes, and artillery parks along a specific axis for weeks before any ground push.

• Rhetorical and information‑control shifts

  • A visible change in Ukrainian messaging—from “hold and wear them down” toward “prepare for liberation” narratives tied to 2025 timelines.
  • Tighter Ukrainian operational security: fewer frontline videos, stricter control over unit movements in sectors where an offensive might launch.

If you start to see all three clusters—capital votes, force build‑up, and shaping fires—align on the same geography, your base‑case odds for Option A should rise meaningfully.

5.6 Pricing the tail: what a credible Ukrainian offensive would move

Under today’s baseline, the fair view is that Option A has low probability in 2025, but its realization would shock several market complexes at once.

The main channels:

1. Territorial recapture markets

   • Contracts on Ukraine’s net control of territory by end‑2025 (for example, Ukraine to gain ≥5 percentage points of its pre‑war territory versus current lines) would likely gap higher if a serious offensive build‑up is observed.
   • City‑level markets—e.g., Ukrainian control of Tokmak, Melitopol, or major parts of occupied Donetsk by specific dates—would move from deeply out‑of‑the‑money toward the high single digits or low teens, depending on the axis and visible prep.

2. War‑end‑by‑date markets

   • A credible offensive raises the volatility of war‑end timing.
   • On one path, successful Ukrainian gains could push Moscow toward negotiations, lifting odds of a 2025–26 settlement.
   • On the other, a failed or pyrrhic offensive could entrench the stalemate further, lowering near‑term settlement probabilities while increasing long‑run exhaustion risks.

3. Escalation and NATO–Russia confrontation risk

   • A Ukrainian attempt to cut the land bridge or threaten Crimea increases incentives for Russia to escalate horizontally (energy, cyber, sabotage in Europe) and rhetorically around nuclear thresholds.
   • Markets pricing direct NATO–Russia clashes—for example, explicit Article 5 incidents, strikes on NATO territory, or overt NATO air cover for Ukraine—would likely see wider risk premia, even if absolute probabilities remain modest.

4. Russia macro and sanctions regime

   • A Ukrainian offensive that credibly threatens Russian positions could push Western capitals toward tighter enforcement and expansion of sanctions on Russian energy and defense‑industrial supply chains.
   • Expect higher implied risk on Russian sovereign and quasi‑sovereign exposures, shipping and insurance linked to Black Sea routes, and European gas contracts if Crimea or southern logistics lines come under serious pressure.

In other words, even if Option A itself is a long shot, the repricing once it becomes credible is large enough that it deserves a defined place in your scenario tree.

5.7 A working probability band for 2025

Given the manpower, aid, and fortification realities already laid out in earlier sections, a reasonable baseline for 2025 is:

• Low odds (roughly 10–20%) that Ukraine launches a theater‑level offensive involving multiple reconstituted brigades and a clear attempt at an operational breakthrough (as opposed to local counterattacks).
• Even lower odds that such an offensive produces large, enduring territorial gains (e.g., net ≥5% of pre‑war territory) without a major concurrent shock in Russian domestic politics or Western technology transfer.

These are not market prices; they are analytical priors under current information. As aid trajectories, Russian domestic politics, and the drone/ISR balance evolve, you should be ready to update sharply, but from a starting point that treats Option A as a tail, not a base case.

The next section will turn to Option B—positional warfare with active local counterattacks—which, unlike Option A, closely matches the resource and political realities shaping 2025 and therefore deserves the lion’s share of your probability mass.

6. Option B – Positional Warfare with Selective Counteroffensives: The Default 2025 Path

If Option A is the low‑probability, high‑impact tail, Option B is how the war is actually being fought right now—and, absent a major aid or political shock, how it is most likely to look through the end of 2025.

At its core, Option B is a strategy of defensive attrition:

• Hold a largely positional front along the thousand‑kilometre line.
• Use drones, artillery, remote mining, and small‑unit counterattacks to bleed Russian assaults and slow advances to hundreds of meters at a time.
• Practice elastic defense—giving up tactically unprofitable villages or salients to preserve combat power on more defensible terrain.

Analysts at Carnegie and CSIS describe 2025 under this regime as a “season of pressure, not breakthrough”: Russia keeps applying force, trading men and metal for incremental gains; Ukraine trades space for time, trying to make every Russian kilometer painfully expensive.

6.1 How Ukraine’s “defensive attrition” strategy actually works

Since early 2024, Ukraine has quietly pivoted away from the 2023 logic of deep mechanized thrusts and toward distributed, tech‑heavy denial. In practice this has several repeatable patterns:

1. Layered, elastic defense on the line

   • Forward screening positions to slow Russian storm‑units and identify main axes of attack.
   • Pre‑sited remote‑laid mines and anti‑tank obstacles to channel vehicles into kill zones.
   • Fallback lines in depth (especially around Kupiansk, Chasiv Yar, Pokrovsk–Kurakhove) that allow organized withdrawals instead of encirclement.

2. UAV‑centric attrition

   • Mass deployment of FPV drones and quadcopters to spot, strike, and harass Russian infantry and armor.
   • Integration of commercial and military ISR into a tighter sensor‑to‑shooter chain—UAV video feeds straight into artillery and mortar fire missions.
   • Constant counter‑battery duels in which drones locate Russian guns, and Ukrainian artillery or loitering munitions attempt to destroy them before infantry are committed.

3. Selective local counteroffensives
   Ukraine still attacks—but locally, not theatrically. Typical aims:

   • Pinch off overextended Russian salients.
   • Retake tactically important high ground, road junctions, or tree lines.
   • Improve the geometry of a defensive line ahead of winter or mud season.

These operations use company‑ or battalion‑scale mechanized groups, not the brigade‑level armored masses envisaged for 2023. They are designed to be short, violent, and limited—gain a few kilometers, then dig in.

This is what Carnegie calls a “strategy of defensive attrition”: Ukraine accepts that it cannot afford to lead with big armored punches, so it instead focuses on making Russian advances as costly and slow as possible while preserving its own limited manpower.

6.2 Why Option B fits Ukraine’s current resource reality

Option B is not a choice made in a vacuum; it is forced by constraints outlined in earlier sections:

• Manpower: Ukraine’s front‑line force (roughly 500,000–600,000 personnel) is large but stretched. Additional mobilization is politically toxic. High‑casualty assaults are much harder for Kyiv to absorb than for Moscow.
• Firepower and industry: Russia’s 2025 defense budget (~$145 billion, 6.3% of GDP) dwarfs Ukraine’s ($53.7 billion, 26% of GDP). Ukraine can innovate and build drones at scale (2.2 million in 2024, aiming for 4.5 million in 2025), but cannot easily match Russian shell production and armor replacement without Western surges.
• Transparent, fortified battlefield: As CNA and CSIS note, both sides fight under near‑continuous surveillance. Dense trenches, minefields, and ubiquitous drones punish large, exposed formations.

In that environment, Option B has three advantages relative to Option A:

1. Manpower preservation: Local counterattacks and elastic defense concentrate risk on specific, high‑value objectives instead of feeding entire brigades into minefields and FPV swarms.
2. Better leverage of Ukrainian strengths: Ukraine’s comparative edge is in small‑unit initiative, UAV innovation, and ISR integration, not in massed armor. Defensive attrition lets those advantages matter.
3. Alignment with Western aid plateau: The NATO €40B+ floor and EU macro‑support are well‑suited to funding drones, shells, fortifications, and rotation, but not to rapidly regenerating multiple heavy offensive corps.

Given those realities, most serious 2025 assessments treat Option B as the default: it is the strategy that Kyiv can sustain without a new aid surge, and the one Western capitals are implicitly funding.

6.3 The downside: strategic drift and Russia’s long‑game advantages

The problem is that defensive attrition is a good way not to lose; it is not, on its own, a way to win—especially against an opponent with:

• Larger population and mobilization space. Russia has roughly three times Ukraine’s population and has stabilized a recruitment pipeline that can replace heavy losses without obvious political crisis.
• A bigger war economy. With defense spending at ~6.3% of GDP and substantial sanctions evasion, Russia can keep financing shells, drones, and repairs at scale.
• Adaptive technology and doctrine. By 2024–25, Russia has substantially narrowed Ukraine’s early edge in UAVs and electronic warfare; some Western analysts now argue Russia has the operational advantage in drones, even if Ukraine innovates faster in specific niches.

Over a 5–10 year horizon, pure positional attrition favors the larger, richer, more mobilized state. That is why multiple expert papers warn that Option B, if not reframed, can become a strategic cul‑de‑sac:

• Western publics tire of financing a static, grinding war with no visible progress.
• Ukrainian society faces mounting strain from long tours, infrastructure damage, and stalled reconstruction.
• Russia uses time to harden its own economy and prepare for a broader confrontation with NATO around 2030.

For prediction markets, this shows up as rising probabilities on long war duration and incremental Russian gains, but not necessarily on outright Ukrainian collapse in 2025.

6.4 From “defensive attrition” to “positional front, aggressive deep battle”

To escape pure drift without jumping into Option A, many Ukrainian and Western analysts now argue for evolving Option B rather than abandoning it.

The emerging concept is often summarized as:

Positional front, aggressive deep battle.

The idea:

• Keep the front largely positional and avoid large, exposed offensives that play to Russia’s strengths.
• Use growing Ukrainian capabilities in long‑range drones, missiles, sabotage, and cyber to wage a relentless deep battle against Russian logistics, command‑and‑control, and industry.

In practice, this means scaling and systematizing trends already visible:

• Drone and missile strikes deep into Russia against oil refineries, ammo depots, rail junctions, and air bases.
• Maritime and air campaigns that have already forced large parts of the Black Sea Fleet out of Sevastopol and complicated Russian shipping.
• Cyber and information operations to disrupt Russian mobilization, logistics software, and industrial control systems.

Carnegie describes this as a form of “strategic neutralization lite”: you do not yet have the full fortified “steel porcupine” of Option C, but you are already using technology to erode Russia’s ability to wage high‑intensity war at acceptable cost—even while the front itself moves slowly.

For markets, the key shift is that Option B becomes less about where the line is this month and more about what is happening 200–500 km behind it.

6.5 How to trade Option B as the modal 2025 scenario

Under current aid and force trajectories, a reasonable working prior is that something like Option B accounts for 50–70% of total probability mass for 2025. That has several implications for how you structure trades.

1. Territorial drift within a band, not map redrawing
Base‑case expectations for 2025 under Option B:

• Russian advances continue in Donetsk and parts of Luhansk/Kharkiv, but are measured in villages and outer suburbs, not major cities.
• Monthly gains fluctuate, but annual net movement stays within a narrow territorial band relative to late‑2024 lines.

Territory markets to focus on:

• Front‑line band contracts: e.g., “By 31 Dec 2025, Russia’s net control in Ukraine will remain within ±3 percentage points of its 1 Jan 2025 share.” These should command relatively high probabilities in an Option B world.
• Objective‑specific markets: “Russia to fully control Donetsk oblast by end‑2025” should remain discounted unless you see clear evidence of Ukrainian defensive failure on multiple axes at once.

Key indicators to watch:

• Monthly Russian advance rates in km², especially in Pokrovsk–Kurakhove and Bakhmut–Chasiv Yar sectors.
• Evidence of orderly Ukrainian withdrawals to new belts vs chaotic routs (which would signal a shift away from controlled elastic defense).

2. Persistent but contained escalation risk
Option B with aggressive deep battle implies more Ukrainian strikes inside Russia and against Crimea—but without NATO troops entering the conflict or Russia crossing clear nuclear red lines.

Pricing implications:

• Markets on NATO–Russia direct conflict by 2025 should price low but non‑zero odds; deep strikes raise friction, but both sides have strong incentives to keep escalation below alliance‑war thresholds.
• Energy and shipping contracts (Black Sea, Russian oil export disruptions) need to reflect a chronic background risk of episodic outages rather than a single catastrophic cutoff.

Indicators:

• Frequency and depth of Ukrainian drone/missile strikes on Russian refineries, rail nodes, and ports.
• Russian responses: limited retaliatory volleys vs moves that target NATO assets or territory.

3. Ukrainian state‑capacity and credit markets
A long, grinding Option B war puts the spotlight on Ukraine’s fiscal and institutional stamina.

Relevant markets include:

• Ukrainian sovereign default risk by date X: Under a sustained aid plateau plus EU macro‑support, outright default before 2026 remains low‑probability, but restructuring and reprofiling risk is non‑trivial.
• Reconstruction timing: Contracts on “start of large‑scale EU reconstruction disbursements” should assume slippage the longer the front remains active and positional.

Indicators:

• EU Facility and G7 asset‑backed loan disbursement schedules vs plan.
• Ukraine’s ability to roll domestic debt and maintain basic public services under wartime taxation.

4. When you should move probability mass away from Option B
Shift weight off Option B and toward other options if you see:

• A large, front‑loaded Western military surge (Option A probability up) or, conversely, a severe aid cut‑off (raising odds of sharper Russian gains or coerced negotiation).
• Major Ukrainian mobilization law changes that significantly increase available manpower (could support more offensive ambitions).
• Clear evidence that Ukraine is investing more in deep fortifications and long‑horizon defense industry than in current‑year combat power (tilting toward Option C’s “steel porcupine” logic).

Absent those signals, positional warfare with selective counteroffensives and an increasingly aggressive deep battle against Russia’s rear remains the most consistent fit to the observable 2025 trajectory—and the anchor around which most war‑related prediction markets should be calibrated.

Option C – Fortified Defense and ‘Strategic Neutralization’: Building the Steel Porcupine

Option B describes how Ukraine fights the next campaign. Option C is about how Ukraine survives the next decade.

Strategic neutralization is the emerging concept that tries to square the circle exposed in the previous section: Ukraine can probably hold a largely positional front in 2025, but it cannot simply attrit Russia forever. Instead of chasing decisive breakthroughs, Option C aims to change the structure of the war itself—turning Ukraine into a deeply fortified, drone‑saturated “steel porcupine” that Russia cannot realistically defeat at acceptable cost.

Carnegie calls this a “new theory of victory: strategic neutralization.” The objective is not a spectacular battlefield collapse of Russian forces, but to paralyze Russia’s ability to wage high‑intensity war on Ukraine while preserving Ukraine’s path to EU and NATO‑adjacent integration.

For prediction markets, this option underpins scenarios where:

• The map moves slowly and large Russian offensives routinely fail.
• Ukrainian state survival odds remain high.
• But the probability of a formal peace treaty or full territorial restoration by 2028 stays low.

7.1 What “strategic neutralization” actually means

Strategic neutralization reframes what “victory” looks like:

• From decisive defeat to structural denial. Ukraine stops trying to destroy Russia’s military outright and instead builds a system that makes large‑scale offensives impossible to sustain—economically, militarily, and politically—for Moscow.
• From one‑off operations to a durable balance. Rather than pin hopes on a single offensive season, Kyiv invests in a 3–7 year project of fortifications, domestic arms production, and cross‑domain strike tools.
• From compellence to deterrence by denial. Even without Article 5, the message to Moscow becomes: you can try again, but you will lose men, equipment, and budget at rates your system cannot tolerate—and gain almost nothing.

In this vision, the war’s character gradually shifts:

• The front becomes hard, deeply engineered, and predictable.
• Most action moves to the deep battle—drones, missiles, cyber, naval raids, and economic warfare against Russian infrastructure.
• Ongoing hostility is chronic but contained, more Korea‑style than 2022’s sweeping maneuvers.

Diplomacy is not abandoned; it is deferred. Neutralization is meant to reshape the equilibrium so that, over time, negotiation looks better to Moscow than endless, fruitless offensives.

7.2 What a “steel porcupine” Ukraine looks like by 2025–2027

Analysts sketch four interlocking pillars.

1. Multi‑layer fortification belts

Ukraine has already launched a national fortification program; Option C scales it into a continuous defensive architecture:

• Depth, not just length. Multiple trench lines, anti‑tank ditches, concrete bunkers, and pre‑sited fire positions in depth around critical belts: Kharkiv–Kupiansk, Sloviansk–Kramatorsk, Pokrovsk–Kurakhove, Zaporizhzhia–Dnipro, Odesa–Mykolaiv, and Kyiv.
• Hardened urban “hedgehogs.” Key cities become fortress hubs with underground command posts, redundantly powered air defenses, and layered UAV/tube‑artillery zones. Think Kramatorsk, Zaporizhzhia, Odesa, Kharkiv as permanent strongpoints.
• Standardized field works. Pre‑cast concrete shelters, unified trench designs, and industrial‑scale mine production, so that fortification becomes a standing industry, not an ad hoc engineering task each winter.

In effect, Ukraine seeks to replicate and then exceed the depth of Russian “Surovikin lines,” but oriented to permanently deny operational breakthroughs.

2. A dense ISR–strike complex built on drones and precision fires

Drones already account for roughly 70% of casualties on both sides. Option C leans hard into that trend.

• Mass production: Ukraine produced about 2.2 million drones in 2024 and targets 4.5 million in 2025, from cheap FPVs to longer‑range one‑way attack systems.
• Networked sensing: Persistent coverage by small UAVs, commercial satellites, ground sensors, and SIGINT feeds into a national sensor‑to‑shooter network that can strike any Russian unit approaching Ukrainian lines within minutes.
• Precision fires: Western‑supplied and domestically built missiles (HIMARS/MLRS rockets, ATACMS/Storm Shadow‑class weapons, indigenous designs) are integrated to hit logistics hubs, bridges, ammo depots, and command posts 50–300+ km behind the front.
• EW as a shaping tool: Expanding Ukrainian electronic warfare to blind Russian UAVs over key axes and protect its own drone swarms over defensive belts.

The goal is to turn any Russian attempt at concentration into a predictable, pre‑registered fire mission—a kill chain, not a battle.

3. Domestic defense‑industrial depth

Ukraine’s defense industry has reportedly expanded more than tenfold since 2022. Strategic neutralization assumes this continues and is institutionalized:

• Local production of shells, drones, and armor repair to reduce vulnerability to Western political cycles.
• Joint ventures with European and US firms on Ukrainian or nearby EU soil (Poland, Czech Republic, Slovakia, Germany), integrating Ukraine into NATO supply chains.
• Focus on asymmetric, cost‑effective systems—UAVs, loitering munitions, EW, air defense interceptors—rather than trying to match Russia tank‑for‑tank.

Over 3–5 years, this changes Ukraine from a recipient to a regional defense exporter, with knock‑on implications for EU industrial policy and long‑run Ukrainian GDP.

4. Cross‑domain tools for operational paralysis

Finally, the steel porcupine is not just trenches and drones. It is a cross‑domain denial system:

• Naval drones and coastal missiles pushing the Black Sea Fleet away from Crimea and restricting Russian freedom of movement.
• Long‑range drone and missile strikes into Russia against refineries, rail hubs, and air bases, raising the cost of sustaining the front.
• Cyber and information ops targeting logistics software, mobilization systems, and industrial control, increasing friction in Russian war management.

The intended outcome is that Russia can still harass and bombard, but it cannot credibly assemble, supply, and protect the kind of forces needed for large, deep offensives.

7.3 Why Option C fits Western political preferences

Option C is more than a military concept; it is a political technology for keeping Western support sustainable.

Compared with Option B’s open‑ended attrition, Option C:

• Aligns with aid plateaus. NATO’s €40B+ annual floor and EU’s multi‑year Ukraine Facility are easier to sell as investment in a permanent defensive architecture and industry than as fuel for repeated, high‑risk offensives.
• Creates co‑benefits. Western co‑production deals, joint R&D on drones and air defense, and fortification know‑how feed directly into European rearmament agendas for a future Russia–NATO confrontation around 2030.
• Limits escalation risk. A denial‑focused posture is easier to defend domestically as “preventing Russian aggression” than sending the hardware for attacks deep into Russia, even if long‑range strike remains part of the mix.

For many European governments, the politically low‑friction line—“we will not let Ukraine lose, but we will not escalate recklessly”—maps almost exactly onto a steel porcupine strategy funded over a decade.

7.4 Strategic neutralization is not short‑term peace

For traders, it is crucial not to confuse neutralization with settlement.

Under Option C, the most likely path is:

• 2025–2027: Front lines remain broadly similar, with modest Russian nibbling in Donbas and Kharkiv offset by Ukrainian local gains; casualty rates stay high but gradually decline as fortifications and ISR mature.
• Russian rearmament continues with an eye toward 2030, but its ability to translate that into successful offensives against Ukraine erodes as Ukrainian defenses deepen.
• Sanctions and economic decoupling harden into a semi‑permanent regime; both economies adapt around it.
• At some point beyond 2027, Moscow faces a structural choice: maintain a costly, unwinnable positional war indefinitely or negotiate some form of ceasefire/armistice without having forced Ukrainian collapse.

Historical base rates from Korea and Iran–Iraq suggest such positional phases can last 2–7 years before political exhaustion makes a deal attractive. Option C does not compress that timeline; it makes rapid settlement less likely, but eventual settlement more likely to be on terms compatible with Ukrainian survival and EU integration.

Thus, for war‑end‑by‑date markets, a world drifting toward Option C should:

• Lower odds of a comprehensive peace deal by 2025–26.
• Raise odds of Ukraine still existing as a functioning state with roughly current borders into the early 2030s.

7.5 Option B vs Option C: the strategic trade for Kyiv and for markets

Option B and Option C are not mutually exclusive in 2025; Ukraine is already doing pieces of both. The difference is emphasis and time horizon:

• Option B prioritizes current‑year combat power and holding the line at acceptable cost.
• Option C prioritizes multi‑year resilience—even if that means accepting short‑term territorial risk or slower offensive activity.

For Kyiv, the trade‑off is political:

• Embracing Option C more fully means implicitly accepting that full territorial restoration is unlikely in the medium term and that Ukraine’s best path runs through security by denial plus EU accession, not quick battlefield reversal.

For markets, the trade‑off is probabilistic:

• The more clearly Ukraine and the West move toward a steel porcupine model, the higher you should price state‑survival and EU‑integration odds, and the lower you should price big territorial shifts and near‑term peace treaties.

7.6 How a steel porcupine world reshapes prediction markets

Under a credible Option C trajectory, you should expect the following repricing patterns.

1. Territory and war‑duration markets

• Lower volatility on the map. Contracts on Russia holding roughly current shares of Ukrainian territory through 2027 gain probability.
• Compressed tails. Odds of sudden Ukrainian collapse or large Russian breakthroughs fall; odds of rapid Ukrainian liberation also fall.
• Longer war tails. “War ends by 2026” should trade at a discount; “war still ongoing (no formal peace) by 2028–2030” should carry materially higher odds.

2. Ukrainian sovereign, reconstruction, and EU integration

• Survival premium. Default‑by‑date markets should assign low probabilities of outright insolvency as long as EU macro‑support and IMF programs continue, but price in protracted reconstruction delays.
• EU accession timing. Option C supports scenarios where Ukraine starts accession talks and partial integration (single market alignment, defense‑industrial projects) before a formal peace, but full membership before a settlement remains low‑probability.

3. Sanctions durability and Russian long‑run rearmament

• A neutralization strategy presumes long‑run sanctions and export controls on Russian defense inputs. Markets tied to Russian oil, gas, shipping, and sovereign risk should price a slow‑burn, semi‑permanent sanctions regime, with episodic tightening in response to Russian escalation.
• At the same time, Western planners assume Russia is preparing its forces for potential confrontation with NATO around 2030. Traders should monitor indicators of Russian rearmament beyond Ukraine—new formations, naval and air posture, missile deployments—as signals for longer‑dated risk on European defense equities and energy infrastructure.

4. Defense‑industrial and technology plays

• Option C favors multi‑year revenue streams for firms involved in drones, air defense, EW, fortifications, and munitions—especially those co‑producing with Ukraine or in frontline NATO states.
• It also creates a potential Ukrainian defense‑export story in the 2030s, contingent on EU integration and domestic political stability.

As you calibrate your scenario tree, Option C is the one to assign if you observe:

• Sustained NATO/EU funding earmarked for fortifications, co‑production, and industrial expansion, not just annual ammo top‑ups.
• Ukrainian legislation and budget priorities shifting toward long‑horizon defense investment (multi‑year drone programs, fortification agencies, mobilization reform) rather than one‑off offensive preparations.

That combination—fortification plus industry plus cross‑domain denial—is the signature of the steel porcupine. It is not a path to quick victory, but it is a coherent path to enduring Ukrainian survival in a long war. The next section will turn to how these strategic options feed back into diplomatic endgames and ceasefire scenarios, and what to watch as early signals of Moscow’s willingness to negotiate in a neutralization world.

8. Three Strategic Options, One Long War? Comparing 2025–2027 Scenarios

Options A, B, and C are building blocks. To trade them, you need integrated scenarios that combine:

• Ukraine’s dominant military strategy
• Western aid trajectories
• Russian domestic stability
• Front‑line dynamics and territorial drift

What follows is a 2025–2027 scenario grid with subjective probability bands, territorial outcomes, and market implications. The weight of evidence from force balances, aid trends, and historical base rates (positional wars lasting 2–7 years) pushes the base case toward Options B and C. Option A (large Ukrainian offensives) should be treated as an out‑of‑the‑money call, and the main wild card becomes internal shock in Russia rather than a clean battlefield decision.

Scenario 1 – Grinding Positional War

Tagline: Russia presses, Ukraine holds (mostly). No one breaks.

• Dominant strategy: Option B – positional warfare with selective Ukrainian counterattacks; limited elements of Option C but not yet decisive.
• Subjective probability (2025–27): 45–55%.
• Western aid: NATO’s €40B+ floor holds; US passes intermittent packages but without a major new surge; EU Facility and G7 asset‑backed loans disburse broadly on plan.
• Russian domestic politics: Regime stable but strained; no systemic rupture.

Territorial and casualty profile

• Net territorial change by end‑2027 vs early‑2025: Russia gains roughly 2–5 percentage points of pre‑war Ukrainian territory, mostly through:
  • Further advances around Chasiv Yar / Toretsk / Pokrovsk–Kurakhove in Donetsk.
  • Increments near Kupiansk/Borova and potentially Bilohorivka/Siversk.
• No full capture of all of Donetsk oblast; major cities like Dnipro, Kharkiv, Odesa, Zaporizhzhia remain under Ukrainian control.
• Casualties: War remains high‑intensity but slowly trends down from 2022–23 peaks as both sides entrench deeper and drone kill‑chains become more efficient. Cumulative KIA/WIA grows by the hundreds of thousands across both sides through 2027.

Economic and political implications

• Ukraine sustains a war economy at 20–30% of GDP defense spending, relying on EU/IMF for macro‑stability; private investment and reconstruction stay heavily suppressed.
• Russia absorbs costs via high oil‑and‑gas revenues, domestic financial repression, and further militarization; GDP growth low but positive.
• Western publics show mounting fatigue but no decisive collapse of support.

Market implications

• Territory markets:
  • Contracts on Russia fully controlling Donetsk or all occupied oblasts by 2027 should stay discounted; a slow grind is not a cascade.
  • Incremental capture markets (e.g., Pokrovsk, additional Donbas raions) merit non‑trivial probabilities – this is where Russia’s advantage in mass and artillery is most likely to pay off.
• War‑end‑by‑date markets:
  • Odds of a comprehensive peace deal by end‑2026 look over‑priced wherever they trade in the high double digits; scenario 1 implies continued active war or only informal pauses.
  • No formal peace by 2028 should command materially higher odds than many naive baselines.
• Sanctions / Russian macro:
  • Sanctions regime persists with modest tightening; Russian sovereign risk trades weak but not in default territory absent a separate macro shock.
• NATO posture:
  • Gradual European rearmament and force posture upgrades on the eastern flank; rising long‑dated value in European defense names rather than near‑term war panic.

Key triggers toward Scenario 1

• US and EU keep funding at or near current real levels, but explicitly frame it as “preventing defeat” rather than enabling victory.
• Frontline reports show continued Russian advances measured in villages, not cities.
• No major Russian domestic rupture; regime absorbs casualties and costs.

Scenario 2 – Steel Porcupine Consolidation

Tagline: Ukraine trades space for time, then hardens the line.

• Dominant strategy: Transition from Option B to Option C – deep fortifications + drone/ISR‑centric “strategic neutralization”.
• Subjective probability (2025–27): 25–35%.
• Western aid: NATO and EU shift from year‑to‑year crisis‑funding toward programmatic, multi‑year support for fortifications, co‑production, and defense industry; US plays a crucial but slightly smaller role.
• Russian domestic politics: Authoritarian resilience, but signs of over‑stretch and elite concern.

Territorial and casualty profile

• Net territorial change by end‑2027 vs early‑2025: Within ±2 percentage points of current Russian‑held territory. Some plausible variants:
  • Russia gains a bit more of Donetsk/Luhansk, then stalls against new Ukrainian belts.
  • Or Ukraine claws back specific salients (around Robotyne–Verbove or Kharkiv oblast) as Russian offensive energy ebbs.
• Casualties: Still substantial, but declining trend as large‑scale assaults increasingly fail against hardened belts and ISR‑strike neutralizes concentrations early.

Economic and political implications

• Ukraine evolves into a “garrison‑cum‑EU‑candidate state”:
  • Domestic defense industry expands via joint ventures; drones, EW, air defense, and munitions become structural growth sectors.
  • EU integration advances in law, regulation, and infrastructure despite ongoing hostilities.
• Russia remains sanctioned and militarized; by late 2020s it faces the bill for sustained high defense spending (~6%+ of GDP) alongside demographic decline.

Market implications

• War‑duration / ceasefire markets:
  • Low odds of a formal peace treaty before 2027, but higher odds of de facto stabilization (Korea‑style) — front shifts under 1–2% of territory per year.
  • Markets that equate “no fighting” with “formal peace” are likely to under‑price the in‑between state: frozen conflict without treaty.
• Ukrainian sovereign & reconstruction:
  • Default risk lower than in Scenario 1, as institutionalized EU/G7 support underpins the budget; but restructuring and maturity extensions remain plausible.
  • Long‑dated reconstruction and infrastructure plays begin to reprice earlier, especially if EU pre‑commits tranches.
• Defense & tech equities:
  • Multi‑year upside in European and Ukrainian‑linked drone, air‑defense, EW, and munitions firms; less emphasis on heavy armor.

Key triggers toward Scenario 2

• NATO/EU launch named, multi‑year programs for Ukrainian fortifications and co‑production rather than just annual pledges.
• Ukrainian budgets and laws create permanent fortification and defense‑industry agencies, signaling a 5–10 year horizon.
• Russia’s major offensives visibly fail at higher cost (e.g., failed pushes on Pokrovsk or Kharkiv with exceptional losses), reinforcing the denial logic.

Scenario 3 – Offensive Surprise

Tagline: Western surge + Russian misstep = a window for maneuver.

• Dominant strategy: Option A – renewed major Ukrainian offensive(s), enabled by a Western firepower surge plus Russian operational disruption.
• Subjective probability (2025–27): 5–15%.
• Western aid: A large, front‑loaded US supplemental and parallel European increases that materially expand 155mm, air defense, armor, engineers, and deep‑strike in 2025–26.
• Russian domestic politics: No full collapse, but clear operational shock – a failed major offensive, command crisis, or logistics breakdown.

Territorial and casualty profile

• Net territorial change by end‑2027 vs early‑2025: Ukraine recaptures perhaps 5–10 percentage points of its pre‑war territory, likely in Zaporizhzhia (Tokmak belt) or parts of Donbas, but still short of 1991 borders.
• Casualties: Very high for Ukraine during offensive phases, as large formations confront minefields and Russian ISR; Russia also absorbs heavy losses in defending and counterattacking.

Economic and political implications

• A successful Ukrainian offensive could create:
  • A window for negotiations from a stronger Ukrainian position, or
  • A period of heightened escalation risk, especially around Crimea, energy infrastructure, and Black Sea lanes.
• Western capitals split between exploiting momentum and fear of provoking direct NATO–Russia confrontation.

Market implications

• Territory markets:
  • Contracts on Ukrainian recapture of key nodes (e.g., Tokmak, Melitopol, or major parts of occupied Donetsk) revalue sharply from deeply out‑of‑the‑money levels.
• War‑end markets:
  • Volatility increases in both directions: higher odds of a 2026–27 settlement, but also non‑trivial probability that a failed or partial offensive entrenches the stalemate.
• Escalation & sanctions:
  • Higher risk premia on Russian assets and on European energy/shipping if Crimea or core Russian lines of communication are credibly threatened.

Key triggers toward Scenario 3

• Passage of a large US aid bill explicitly framed as enabling Ukrainian offensive operations, not just sustaining defense.
• OSINT evidence of reconstituted Ukrainian armored brigades, concentrated breach equipment, and sustained shaping fires on a specific axis.
• Russian forces visibly overextended after a failed offensive, leaving shallow salients and depleted units.

Under today’s constraints, this remains a tail. The trading implication is to treat large liberation/win‑soon contracts as cheap calls, not central cases — worth holding selectively, but only in size that matches a 5–15% probability.

Scenario 4 – Internal Shock in Russia

Tagline: The Kremlin becomes the weakest link.

• Dominant strategy: Ukraine mostly in Option B/C mode; the decisive variable is Russian domestic disruption (elite split, coup attempt, major unrest, or sudden leadership transition).
• Subjective probability (2025–27): 10–20% (highly uncertain and lumpy over time).
• Western aid: At least a plateau; some capitals may see shock as reason either to press advantage or to freeze the conflict.

Territorial and casualty profile

• Outcomes here are path‑dependent:
  • A controlled transition and partial demobilization could freeze lines near their 2025–26 state, with limited further fighting.
  • A chaotic shock might enable local Ukrainian advances against disorganized Russian units, but also carries risk of fragmentation, rogue actors, or loss of central command over nuclear forces.
• Casualties: Could fall rapidly if a ceasefire emerges — or spike if factions compete on the battlefield.

Economic and political implications

• Russian assets face extraordinary volatility: sanctions might tighten or, conversely, be partially eased to stabilize a post‑Putin regime.
• European energy markets repriced on the fly as traders reassess both disruption risks and long‑run Russian export policy.

Market implications

• Regime‑change / leadership markets: Typically price low probabilities; scenario analysis suggests fat tails here that many books underweight.
• Ceasefire / settlement odds:
  • Internal shock is one of the few realistic channels for a negotiated ceasefire by 2026; without it, base‑case odds are low.
• Risk of uncontrolled escalation:
  • In the short window of crisis, odds of accidents or miscalculation rise, which should be reflected in tail‑risk hedges around NATO–Russia confrontation, cyberattacks, and critical infrastructure events.

Key triggers toward Scenario 4

• Significant elite defections, mutiny attempts, or publicized purges in Moscow.
• Large‑scale, sustained urban unrest in multiple Russian cities explicitly linked to the war, sanctions, or mobilization.
• Clear evidence that command cohesion at the top of the Russian military is breaking down.

How to Trade the Scenario Grid: Relative Value, Not Crystal Balls

Taken together, these scenarios imply a non‑Gaussian distribution for 2025–2027:

• Probability mass clusters in Scenario 1 and 2 (≈70–85%) – long war, modest territorial drift, Ukraine survives but does not decisively win.
• Scenario 3 (Offensive Surprise) and Scenario 4 (Internal Shock) are tails, but with very different mechanics and asset‑price impacts.

For prediction markets, that argues for three broad positioning principles:

1. Treat rapid victory/peace as structurally overpriced.
   Unless you can point to concrete triggers from Scenario 3 (Western surge + visible offensive prep) or Scenario 4 (Russian regime shock), contracts implying full liberation or comprehensive peace by 2026 should be seen as rich in a world dominated by B/C‑type dynamics.

2. Distinguish between “no peace” and “collapse.”
   Scenario 2 shows how Ukraine can remain intact without a settlement; markets that equate ongoing war with high default or state‑failure odds are likely to overstate downside for Ukrainian survival and EU‑integration paths.

3. Use cross‑scenario misalignments for relative value.
   Typical opportunities:

   • If Russian deep‑breakthrough markets (e.g., full capture of Donetsk, or a drive on Kharkiv) price aggressively while aid and Ukrainian fortifications are holding, they may be over‑pricing Scenario 1 at the expense of Scenario 2.
   • If Ukrainian large‑recapture markets are priced far higher than aid politics and the transparent battlefield justify, you are effectively being paid to sell Option A while keeping smaller, cheaper calls on Scenario 3.
   • If regime‑shock or sudden‑ceasefire markets trade near zero, they may under‑recognize Scenario 4’s tails — suitable as low‑cost hedges against portfolios otherwise biased to a grinding war.

The rest of this roadmap will drill down into diplomatic and ceasefire pathways and specific indicator sets so that as new information arrives — from parliaments, battlefields, or Moscow’s inner circle — you can shift probability mass across these four scenarios faster than the market does.

9. Diplomatic Endgames in a Positional War: Lessons from WWI, Korea, and Iran–Iraq

The scenario grid you just saw leans heavily toward years of positional fighting (Scenarios 1 and 2), with offensives and Russian domestic shocks as tails. History backs that structure. When wars harden into trenches and minefields, they usually do not end with a clean battlefield decision and a quick peace conference. They end with mutual exhaustion, outside pressure, and a phased diplomatic process.

For traders, these base rates matter: they tell you how skeptical to be when a market is implicitly pricing a 2025–26 “clean victory” or comprehensive settlement.

9.1 What previous positional wars actually looked like

Three modern precedents are especially relevant:

• WWI Western Front (1915–18)
• Korean War (1951–53)
• Iran–Iraq War (1980–88)

Each started with mobile campaigns, then got stuck in positional warfare:

• WWI Western Front

  • After the 1914 “Race to the Sea,” trenches ran from the North Sea to Switzerland.
  • From early 1915 through mid‑1918, the front moved only modestly despite huge offensives.
  • Somme, Verdun, Passchendaele and others generated enormous casualties for single‑digit‑kilometre gains.

• Korea, 1951–53

  • After the sweeping offensives of 1950–51, the line solidified near the 38th parallel.
  • For roughly two years, both sides fortified positions, fought local battles, and negotiated in parallel.
  • The final demarcation line in the 1953 armistice sits very close to pre‑war borders.

• Iran–Iraq War

  • Iraq’s 1980 invasion stalled; by 1981–82, the front congealed into trenches, minefields, and static artillery duels.
  • The positional phase lasted most of the conflict—six to seven years—with both sides mounting major offensives that failed to achieve decisive breakthroughs.

Across these cases, several base‑rate patterns stand out:

1. Fronts stabilize for years. Once deep fortifications are in place, 2+ years of broadly stable lines is normal; 3–7 years is common if external shocks don’t intervene.
2. Major offensives rarely deliver decisive results. Assaults can move the line a few kilometres, but operational encirclements are rare without overwhelming advantages and new doctrine/tech.
3. Wars end politically, not militarily. The final turn comes from coalition fatigue, economic strain, and external mediation, not from a single knockout battle.

Zaluzhnyi himself explicitly framed Ukraine’s reality in these terms when he wrote in 2023 that:

“Just like in the First World War, we have reached the level of technology that puts us into a stalemate.”

That is the environment in which you must think about ceasefires, frozen conflicts, and treaties.

9.2 How positional wars actually end

Across WWI, Korea, and Iran–Iraq, the endgames share three structural ingredients.

1. Mutual exhaustion and declining marginal returns from violence
In each case, by the time talks became serious, another offensive no longer promised commensurate gains:

• WWI: By 1918, German offensives could still move the line, but could not break Allied depth before US troops and supplies arrived.
• Korea: Both sides recognized by 1952 that further assaults would only re‑fight the same hills for marginal terrain.
• Iran–Iraq: Late‑war offensives with chemical weapons and massed artillery barely shifted positions while draining treasuries.

The market‑relevant point: once both sides realize the next push only buys them a few kilometres at huge cost, the value of negotiation rises even if neither has clearly “lost.”

2. External mediators and guarantors
Settlements did not emerge in a vacuum:

• WWI’s armistice terms were structured by the Allied coalition, especially France, Britain, and the US.
• The Korean armistice only came together once Washington, Beijing, and Moscow aligned on avoiding further escalation.
• Iran–Iraq’s ceasefire required UN Resolution 598, plus tacit US/Soviet backing and pressure on both sides.

Modern positional wars almost always end with outside powers brokering and then partially enforcing the line.

3. Economic and social strain as the real constraint
None of these wars ended because one army literally ran out of men on the front. They ended when the home front hit its breaking point:

• Food and fuel shortages, inflation, and fiscal crises in WWI Europe.
• Domestic fatigue and fear of broader war in the US and China during Korea.
• Oil revenue depletion, sanctions, and war‑weariness in Iran and Iraq.

For Ukraine, Russia, and the West, this translates into a simple trading rule: watch budgets, prices, and politics at home at least as closely as casualty numbers at the front.

9.3 What the base rates imply for Ukraine’s timeline

Applied to Ukraine, these patterns suggest:

• A 2025–2027 window of largely stable, attritional front lines is not an outlier; it is historically typical once wars enter deep positional phases.
• Major breakthroughs—Ukrainian or Russian—are possible but should be treated as low‑probability events absent:
  • A big shift in Western aid/technology,
  • A doctrinal leap (e.g., truly effective counter‑drone/ISR systems), or
  • Serious disruption inside Russia.
• Diplomatic movement is more likely to follow changes in external conditions than a single dramatic offensive. Key levers:
  • Western decisions to tighten or relax aid, sanctions, and security guarantees;
  • Russian domestic politics—elite fractures, protests, or transition at the top;
  • Shifts in third‑party stances (China, Turkey, Gulf states) that change Moscow’s cost–benefit calculus.

In scenario terms from the previous section:

• Scenario 1 (Grinding Positional War) and Scenario 2 (Steel Porcupine Consolidation) closely resemble WWI/Korea/Iran–Iraq base cases in their long, static phases.
• Scenario 3 (Offensive Surprise) is the analogue to rare, late‑war doctrinal/resource shifts (e.g., Allied 1918 offensives).
• Scenario 4 (Internal Shock in Russia) corresponds to the political tipping points that historically opened armistice windows.

Base rates therefore argue that “war ends cleanly by 2025–26” belongs in the tail, not the center, of your probability distribution.

9.4 Ceasefire, frozen conflict, treaty: expect a phased process, not a single event

History also warns against treating “peace” as a one‑off binary.

• In Korea, large‑scale maneuver ended in 1951; talks started the same year. Yet the armistice only came in 1953—and no peace treaty exists even today.
• In Iran–Iraq, the effective military stalemate pre‑dated the 1988 ceasefire; UN diplomacy and elite decisions lagged the battlefield reality.

Translating that into Ukraine:

1. Ceasefire/armistice

   • Likely first step: a halt to major offensive operations along an agreed line of control, possibly with monitoring (UN/OSCE) and demilitarized zones in specific sectors.
   • This could coexist with continued sanctions, low‑level skirmishes, and unresolved political questions (Crimea, occupied Donbas, reparations).

2. Frozen conflict

   • Even after a ceasefire, the status of territories may remain contested; both sides rearm and reposition.
   • This could last years or decades (Korean DMZ model), especially if Russia refuses to formally recognize Ukraine’s sovereignty over all claimed territories, and Ukraine refuses to recognize Russian annexations.

3. Formal peace treaty and border recognition

   • A legal peace would likely require major political shifts—for example, a different leadership in Moscow, or a broader European/Russian security bargain.
   • On historical precedent, this could lag a ceasefire by many years.

For prediction markets, these distinctions are crucial. “War ends by year X” could mean:

• Cessation of large‑scale combat,
• Armistice signed,
• Full peace treaty and mutual recognition of borders.

Different contracts often mix these concepts; historically grounded trading demands you decouple them.

9.5 Mapping history to concrete market types

You can now use these base rates to sanity‑check three common classes of contracts:

1. “Ceasefire / armistice by year X”

• Base rate from Korea and Iran–Iraq: 2–7 years from the onset of positional stalemate to a durable ceasefire.
• If we treat 2024–25 as the clear transition to positional war in Ukraine, armistice by end‑2025 is historically aggressive; by 2027 is more aligned with precedent if external pressure and economic strain accumulate.
• Over‑pricing signal: markets implying >50–60% probability of a ceasefire by 2025–26 without visible shifts in aid, Russian politics, or third‑party mediation.

2. “Formal peace treaty / political settlement by year Y”

• WWI saw armistice and treaty within a short interval, but Korea has gone 70+ years without a treaty.
• For Ukraine, a plausible structure is armistice first, treaty much later; odds that both occur by, say, 2030 should be materially lower than odds of a ceasefire by that date.
• Under‑pricing signal: contracts on “no formal peace treaty by 2030” trading at very low odds in a world that increasingly resembles a long frozen conflict.

3. “Recognition of borders / territorial status”

• Iran–Iraq ultimately reverted to international borders; Korea entrenched a new de facto line while de jure claims remain contested.
• For Ukraine, two opposite tails exist:
  • Eventual de facto recognition of a modified line of control, especially if a post‑Putin Russia seeks sanctions relief.
  • Or a Korean‑style outcome: a de facto line plus entrenched non‑recognition.
• Contracts that treat international recognition of Russian annexations as a near‑term base case are running against both Ukrainian political red lines and historical reluctance to bless territorial conquest.

In all three categories, the lesson is the same: use the 2–7 year base‑rate window and the phased nature of past settlements to anchor your priors, then adjust only when you see real‑world catalysts (aid shocks, Russian instability, major diplomatic initiatives) that historically preceded armistice breakthroughs.

The next section will drill into those catalyst paths—what specific economic, political, and battlefield signals typically precede negotiation windows—and translate them into an indicator set you can track in real time against relevant markets.

Section 9 showed why positional wars usually end via politics, not battlefield miracles—and why Ukraine’s path to any settlement is likely phased and slow. This section turns that logic into a trading framework: which markets to care about, how Options A/B/C and the four scenarios push those prices, and how to structure positions and indicators across different time horizons.

10.1 Start with the base case: a B→C continuum, not quick peace

Using the scenarios from Section 8 and the diplomatic base rates from Section 9, a reasonable working prior for 2025–27 is:

• 70–85%: War looks like Scenario 1 or 2—a continuum from Option B (positional warfare with local counterattacks) toward Option C (steel porcupine and strategic neutralization).
• 5–15%: Scenario 3 (Offensive Surprise)—Option A enabled by a Western surge and Russian operational error.
• 10–20%: Scenario 4 (Internal shock in Russia)—elite rupture or major unrest driving a ceasefire window.

That structure should anchor both prediction market pricing and risk models. The core task is then:

1. Express the B→C continuum as your baseline portfolio.
2. Add targeted tail hedges on Option A and Russian political shock.
3. Maintain an indicator dashboard so you can move probability mass between buckets faster than the median trader.

The rest of this section walks through that in five steps.

10.2 The five market clusters that matter most

You can map almost all Ukraine‑war contracts into five clusters that line up directly with the roadmap.

1. Territorial control and front‑line changes

Questions these markets ask:

• How many percentage points of pre‑war Ukrainian territory will Russia hold by a given date?
• Will Russia/Ukraine control specific cities or oblasts (e.g., Pokrovsk, Chasiv Yar, full Donetsk) by end‑2025/26?

Baseline under B→C:

• Slow Russian drift in Donetsk/Luhansk/Kharkiv of perhaps 2–5ppt by 2027 (Scenario 1), or near‑flat lines under a matured steel porcupine (Scenario 2).
• Large breakthroughs (either side capturing entire oblasts) are low‑probability without a big aid or domestic shock.

Trading implication:

• Favor range‑bound or “within‑band” outcomes on national‑level control, and incremental objectives (Pokrovsk area; Bilohorivka; Kupiansk/Borova) over maximalist “Russia takes Donetsk” or “Ukraine liberates south” contracts.

2. Ceasefire / peace agreement timing

Variants here include:

• “Large‑scale combat ends or armistice signed by date X.”
• “Comprehensive peace treaty / political settlement by year Y.”

Given historical base rates (Korea/Iran–Iraq 2–7 years of positional stalemate before armistice), plus the current B→C bias:

• Armistice/ceasefire by 2025–26 should be priced as aggressive unless you see clear catalysts.
• No formal peace treaty by 2030 should carry meaningful probability; a Korean‑style frozen conflict is very plausible.

Trading implication:

• Differentiate sharply between “fighting stops” and “treaty signed” contracts; the latter should be much cheaper.

3. Western aid levels and sanctions regimes

This cluster includes:

• “US/EU/NATO to commit ≥$X in military/economic support by date Y.”
• “New major sanctions package or sanctions relief by date Y.”

Under B→C, expect:

• Institutionalized floors: NATO’s €40B+/year military support, EU’s multi‑year Ukraine Facility and G7 loans from Russian asset interest.
• Less probability of new big surges, more of predictable, medium‑sized flows.
• Sanctions staying in place or tightening at the margin, not being lifted soon.

Trading implication:

• Center your priors on plateau, not collapse or massive re‑acceleration, while remaining nimble around key legislative events.

4. NATO/Russia escalation risk

Examples:

• “Direct NATO–Russia clash (e.g., Article 5 incident) by year X.”
• “Russian use of nuclear weapons in Ukraine by year X.”

In a B→C world:

• Daily risk is chronic but contained: drone strikes, cyber operations, sabotage, rhetoric.
• All sides have strong incentives to avoid open NATO–Russia war, especially amid rearmament plans aimed at the 2030 horizon.

Trading implication:

• These contracts warrant low but non‑zero probabilities, rising only if you see clear threshold‑crossing actions (e.g., Russia striking NATO territory, NATO declaring a no‑fly zone).

5. Ukraine’s macro and reconstruction path

Markets here capture:

• Sovereign default or restructuring by date X.
• Timing/scale of EU reconstruction funds or EU accession milestones.

Under B→C:

• Ukraine remains a functioning, heavily militarized state with high defense spending (~25%+ of GDP) and ongoing EU/IMF support.
• Large‑scale reconstruction is delayed but not canceled; “build‑back” money comes in phases and may start before a treaty, anchored to EU integration.

Trading implication:

• Treat outright collapse or near‑term full recovery as tails; center on messy survivorship with slow, conditional reconstruction.

10.3 How to position: core book vs. tail hedges

A practical roadmap is to build from the middle out.

Step 1 – Express the B→C base case

Core positions that line up with Scenarios 1 and 2:

• Long war / delayed peace:

  • Overweight contracts like “no formal peace treaty by end‑2028” or “war (no armistice) still ongoing end‑2026,” when priced below what a 2–7 year positional base rate would suggest.

• Bounded territorial drift:

  • Favor “Russia’s control share in Ukraine at end‑2025 within ±3ppt of today” over directional bets on full oblast capture or full liberation.

• Persistent sanctions and Ukrainian survival:

  • Where available, lean toward:
    • Continued EU macro‑support by date X;
    • Sanctions still in force / no major rollback by mid‑late 2020s;
    • Ukraine remains a sovereign, internationally recognized state controlling its major cities.

For risk modelers, this translates into priors such as:

• 70–80% probability that no comprehensive peace treaty is signed by end‑2027.
• 60–75% that Russia’s net territorial control in Ukraine at end‑2026 lies in a narrow band (e.g., ±3ppt) around mid‑2025 levels.

Step 2 – Layer in Option A and Russian‑shock tails

You then add cheap convexity for the tails:

• Option A (Offensive Surprise) hedges

  • Small, out‑of‑the‑money exposure to Ukrainian recapture of key nodes (Tokmak, Melitopol, parts of occupied Donetsk) and to earlier‑than‑base‑case ceasefire (e.g., settlement by 2026), sized for a 5–15% scenario.

• Russian internal‑shock hedges

  • Small positions in:
    • Contracts on leadership change / regime instability by date X.
    • Ceasefire‑by‑date markets that would only make sense if Moscow suddenly seeks to cut its losses.
    • Tail‑risk escalation contracts (e.g., sharp increase in cross‑border incidents) for the narrow window in which control could fray.

The portfolio logic is:

• Your P&L anchor is a long, grinding war with modest map movement.
• Your asymmetric upside comes if either Western politics (Option A) or Russian politics (Scenario 4) break the stalemate sooner or more violently than expected.

10.4 Time horizons: campaigns vs. regime shifts

You also need to keep trade horizons aligned with what can actually change that fast.

3–6 month horizons: campaigns and votes

Suitable for:

• Frontline milestones: capture or defense of places like Bilohorivka, Chasiv Yar’s high ground, or the Pokrovsk–Kurakhove belt.
• Aid decisions: US supplemental bills; NATO annual support pledges; EU Facility disbursement rounds; new sanctions packages.

Position types:

• Event‑driven trades around known decision dates (e.g., US Congressional votes), where order books often under‑price the binary risk of
  • “large package passes and is front‑loaded” vs.
  • “no deal or long delay.”
• Short‑dated territorial contracts where OSINT shows clear momentum (e.g., Russia closing on a town with flanking positions already taken).

2–3+ year horizons: war duration, sanctions, institutions

Suitable for:

• War‑end and treaty timing, where diplomatic base rates dominate.
• Sanctions longevity and the shape of Russia’s and Ukraine’s economies under a 2030 rearmament horizon.
• Ukraine’s EU/NATO anchoring: accession talks, co‑production deals, long‑term security compacts.

Position types:

• Structural views such as:
  • “No comprehensive peace deal by 2030.”
  • “EU macro‑framework for Ukraine still in place by 2028.”
  • “Sanctions on core Russian energy exports not fully lifted before 2030.”

For risk modelers, these horizons map onto different factor buckets: short‑horizon shocks mostly hit territorial and escalation factors; long‑horizon ones dominate macro, credit, and institutional risk.

10.5 Indicators that move you off the base case

You should track a small, disciplined dashboard rather than every headline. Five buckets matter most:

1. US and European legislative signals

   • US: passage, failure, or prolonged delay of large Ukraine supplementals; explicit language about enabling offensives vs just defense.
   • EU/NATO: multi‑year commitments for fortifications and co‑production (tilt toward Option C) vs reluctance to renew the NATO €40B floor (tilt toward higher Russian‑gain risk).

2. Russian mobilization and industry

   • New mobilization decrees; sizeable recruitment waves; visible expansion of defense plants beyond currently planned growth.
   • Large reported or satellite‑observed stockpiles of artillery shells and drones near specific sectors, signaling preparation for another offensive pulse.

3. Battlefield posture and fortification signals

   • Evidence of Ukrainian armored brigades being reconstituted with Western kit away from the line (Option A probability up).
   • OSINT on large‑scale Ukrainian fortification projects (new belts around Kharkiv, Kramatorsk, Zaporizhzhia), indicating a deeper move into Option C.
   • Russian ability or failure to convert local successes (e.g., after taking Vuhledar) into deeper operational advances.

4. Drone, artillery, and air‑defense production trends

   • Whether Ukraine actually gets close to 4.5 million drones in 2025, and how Russian drone output responds.
   • Western artillery/air‑defense production lines (US, EU) meeting or missing ramp‑up targets.
   • Shifts in kill ratios reported by credible military analysts that suggest one side has regained a qualitative edge.

5. Domestic unrest and elite behavior in Russia and Ukraine

   • For Russia: large, repeated protests; unusual movements of security units around Moscow; visible elite splits, purges, or defection signals.
   • For Ukraine: public backlash against mobilization, breakdown in political consensus over war aims, or signs of reform backsliding that jeopardize EU support.

You should only move substantial probability mass from B→C toward A or 4 when multiple indicators line up, not on isolated stories.

10.6 Risk management in a fog‑of‑war environment

Three structural features make Ukraine‑war markets especially treacherous:

1. Information lags and propaganda

   • Both sides curate information; many battlefield reports are days behind real events.
   • Social media is rich in tactical detail but highly selective; viral clips are not representative samples.

2. OSINT and think‑tank noise

   • High‑quality OSINT (ISW maps, ACAPS reporting, satellite imagery analyses) coexists with low‑quality speculation.
   • Even reputable think‑tanks can be several weeks late incorporating new production or mobilization data.

3. Market microstructure

   • War‑related contracts often have thin order books; a handful of motivated traders can push prices far from any reasonable prior—especially around headline events.

Practical rules:

• Triangulate: before leaning into a move, look for agreement between at least two independent sources (e.g., a serious think‑tank note + updated maps + satellite imagery) rather than trading off a single tweet or official claim.
• Separate narrative from constraint: ask whether the new story actually changes manpower, firepower, or aid trajectories. If not, it may be noise.
• Size tail bets as tails: do not let 5–15% scenarios dominate your P&L; use them as convex overlays on a base‑case book.
• Avoid over‑reacting to daily tactical swings (capture or loss of a village) unless they clearly threaten a major node (Kupiansk, Chasiv Yar’s heights, Pokrovsk belt) or reveal a deeper structural shift.

10.7 Concrete repricing examples

To make this less abstract, consider three stylized shocks and how a rational repricing should cascade across clusters.

Example 1 – A large, front‑loaded US aid package passes

Suppose Congress approves a substantial supplemental that:

• Restores Ukraine’s stocks of 155mm shells and air‑defense missiles,
• Delivers new armored brigades plus engineering gear, and
• Expands long‑range strike capacity.

Implications:

• Option A probability rises (though not to 50+% unless you also see Russian operational weakness).
• Territorial markets:
  • Odds of Ukraine retaking specific nodes (e.g., Tokmak) by 2026 rise from very low to moderately low, justifying a modest re‑rating of those contracts.
  • Russia‑deep‑breakthrough odds decrease slightly, especially in sectors where Ukrainian defense was ammunition‑constrained.
• Ceasefire markets:
  • Near‑term armistice probability can move either way:
    • Up, if you believe Moscow will seek negotiations before Ukraine strikes with renewed strength.
    • Down, if you think both sides will try to exploit the new window militarily first.
• Sanctions / escalation:
  • Sanctions‑tightening odds rise (West feels emboldened).
  • Nuclear and broader escalation tails widen modestly if the land bridge or Crimea could be threatened.

A disciplined trader uses this not to jump to “Ukraine will win quickly,” but to tilt probabilities: reduce shorts on Ukrainian‑recapture outcomes, trim some long‑dated “no peace by 2030” exposure, and add selective tail hedges on escalation.

Example 2 – Visible Ukrainian fortification surge

Imagine high‑resolution imagery and Ukrainian budget documents reveal:

• Multiple continuous defensive belts being built around Kharkiv, Kramatorsk, Pokrovsk–Kurakhove, and Zaporizhzhia;
• Significant domestic funding for fortification agencies and drone/air‑defense co‑production.

Implications:

• Shift from pure Option B toward Option C: the steel porcupine vision is being resourced.
• Territory markets:
  • Odds of major Russian breakthroughs over a 2–3 year horizon decline.
  • Odds that Russia cannot move beyond limited 2–3ppt gains increase.
• Ceasefire / treaty markets:
  • Near‑term peace odds fall—Ukraine is preparing for a long haul.
  • Medium‑term state survival odds (and eventual armistice from a position short of collapse) rise.
• Ukraine macro / EU integration:
  • Markets on EU‑Ukraine economic integration and co‑production deals should reprice upward.
  • Ukrainian default risk may improve slightly despite higher defense spending, because EU/NATO backing looks more structural.

Second‑order effect: stronger defenses can reduce 2025–26 ceasefire probabilities but increase the expected value of Ukraine’s long‑run survival and EU anchoring. Portfolios that had over‑weighted “ugly forced peace soon” should pivot toward “ugly but survivable long war.”

Example 3 – Russian mobilization intensifies alongside growing unrest

Suppose Russia announces a new mobilization round, but within months you also see:

• Rising urban protests in multiple cities,
• Elite reshuffles and purges at the top of the security apparatus,
• Credible reports of draft resistance and evasion at scale.

Implications:

• Short‑term territorial risk up: more manpower can fuel higher Russian pressure on key axes (Pokrovsk, Kupiansk, Bilohorivka), warranting a bump in near‑term Russian‑gain probabilities.
• Medium‑term regime‑shock odds up: Scenario 4 becomes more plausible as the social and elite cost of the war rises.
• Ceasefire markets:
  • Odds of a politically driven ceasefire by mid‑late 2020s increase.
• Sanctions / Russian macro:
  • Russian sovereign and corporate risk premia should widen; sanctions tightening or enforcement shocks become more likely.

A rational reaction is not to flip straight to “regime change imminent,” but to scale into low‑cost hedges on Russian‑internal‑shock outcomes while managing increased near‑term risk of Russian advances.

In sum, trading the Ukraine war in 2025 is about structuring around a long, positional base case—a B→C continuum—while staying ready to capitalize on aid‑driven offensives or Russian political shocks when indicators genuinely shift. The final sections will zoom out from individual contracts to portfolio construction and cross‑asset implications, tying these scenario views into broader European energy, defense, and EM‑sovereign risk themes.

Section 10 sketched how to position around a long, positional base case and add tail hedges. The missing piece is what can actually break that structure in 2025—and which specific, observable signals should make you move probability mass between scenarios.

This section is a risk map and checklist: the wildcards that could up‑end the B→C baseline, and the indicators that tell you which way the war is bending.

11.1 The main 2025 wildcards

1) US political swing: surge or cliff in aid

The single biggest exogenous risk remains Washington.

• A durable aid plateau (NATO’s €40B+ floor, intermittent but positive US packages) underpins Scenarios 1–2.
• A sharp US pivot—either to a much larger, front‑loaded package or to a near‑cutoff—would immediately reshuffle scenario odds.

Upside variant – offensive enabling surge
A large US supplemental that restores 155mm, air‑defense interceptors, armor, engineers, and long‑range strike could:

• Push Option A from a 10–20% tail toward a plausible minority case.
• Raise odds of Scenario 3 (Offensive Surprise) and a 2026–27 negotiation window.

Downside variant – de facto cutoff
A coalition in Congress blocking further major packages, with Europe unable to fully backfill, would:

• Increase odds of faster Russian gains (especially in Donetsk/Kharkiv) and forced Ukrainian concessions.
• Shift weight toward a darker version of Scenario 1 (grinding war but with steeper Ukrainian losses) or toward a fifth, more pessimistic scenario—partial Ukrainian collapse—that this roadmap has treated as a low‑probability tail so far.

Trading link: You should treat big US votes much like FOMC meetings in macro: discrete events where distributions for territory, war duration, and escalation can all jump.

2) Russian internal instability

Most of the base case assumes a cohesive Russian regime able to mobilize, repress dissent, and keep the war machine funded. That is a non‑trivial assumption.

Wildcards include:

• Elite splits or coup attempts (Wagner‑style mutinies but closer to the Kremlin).
• Large, sustained protests against mobilization or economic hardship.
• Rapid leadership change without a clear succession plan.

If any of these move beyond a one‑day drama, they steer you toward Scenario 4 (Internal Shock in Russia):

• Near‑term risk of command disruption and erratic escalation.
• Medium‑term higher odds of a ceasefire as a new or shaken leadership tries to consolidate.

Trading link: Even modestly higher probabilities of regime shock warrant:

• Higher odds on earlier armistice/ceasefire contracts.
• Fatter tails in Russian sovereign/FX risk and select escalation markets.

3) Local Ukrainian defensive collapse on a key axis

The base case assumes elastic, controlled Ukrainian defense: losing villages and salients, not major belts. A true sector‑level collapse—say, west of Chasiv Yar, around Pokrovsk–Kurakhove, or on the Kupiansk–Borova line—would be different.

Signals would be:

• 10–20 km advances in days, not weeks, with multiple defensive lines overrun.
• Verified loss of a major node (e.g., Chasiv Yar’s heights or Bilohorivka and Siversk in quick succession) without a stabilizing new line forming.

Consequences:

• Sharp upward revision in odds of Russia taking additional Donetsk/Luhansk territory by 2026.
• Higher probability of coercive bargaining: Western capitals and Kyiv facing a trade‑off between further losses and accepting an unfavorable ceasefire.

Trading link: This is the main path where Russia overperforms the current Scenario 1/2 expectations without a broader regime shock. It should move:

• City‑level Russian‑capture markets up.
• Near‑term ceasefire odds modestly up (if the West decides to freeze lines).
• Long‑run Ukrainian survival odds only slightly down if fortification and aid are reinforced behind the new line.

4) Technological discontinuity: EW, counter‑drone, and long‑range strike

Most 2025 analysis assumes incremental tech evolution, not a step change. But a true discontinuity on either side would be regime‑changing.

Positive for Ukraine:

• Effective wide‑area counter‑drone/EW that reliably blinds Russian UAVs over key sectors.
• Mass deployment of cheap, long‑range strike drones and missiles that can sustain regular hits on Russian ammo depots, rail nodes, and refineries hundreds of kilometers away.

This would:

• Tilt the ISR–strike balance back toward Ukraine.
• Strengthen the logic of Option C (strategic neutralization) and, secondarily, Option A if paired with an aid surge.

Positive for Russia:

• Robust anti‑drone shields nullifying much of Ukraine’s FPV advantage.
• More accurate, cheaper guided munitions and mass glide bombs that can dismantle Ukrainian fortifications faster than they can be rebuilt.

This would:

• Raise the probability of local defensive collapses.
• Push scenario odds toward a harsher Scenario 1 with more territorial drift.

Trading link: Because drones now drive ≈70% of casualties, credible evidence that one side has pulled decisively ahead in UAV/EW effectiveness should move:

• Territorial bands (more or less drift).
• War‑duration markets (longer stalemate under Ukrainian tech edge; shorter, more dangerous drift if Russia dominates).

5) External macro and geopolitical shocks

The war does not exist in isolation. Major external events can reallocate Western bandwidth and budgets.

Key candidates:

• Global recession or credit stress: increases fiscal pressure, making large discretionary aid harder to sustain.
• Energy price spike (e.g., escalated Middle East conflict, Red Sea disruption): tightens European budgets and potentially increases incentives to seek a settlement that normalizes some Russian exports—or, conversely, to tighten sanctions if Russia is blamed.
• East Asia crisis (Taiwan Strait, Korean Peninsula): forces the US to husband munitions and lift constraints in the Indo‑Pacific, potentially at Ukraine’s expense.

Trading link: These shocks primarily hit aid trajectories and sanctions enforcement, so they translate into:

• Adjusted odds for Russian incremental gains vs. Ukrainian endurance.
• Changes in the expected duration of sanctions, which carry through into Russian macro and European energy markets.

6) Nuclear signaling and escalation

Most expert work still treats nuclear use as very low probability, but the signaling around it is a critical regime‑shift variable.

Watch for:

• Explicit, target‑specific nuclear threats by Russian leadership tied to battlefield events (e.g., a Ukrainian drive on Crimea).
• Verified movement or dispersal of non‑strategic nuclear warheads closer to the theatre.
• Breakdown of tacit red lines—e.g., Russia striking NATO territory, or NATO moving from enabling to directly operating air defenses or aircraft in Ukrainian airspace.

Any of these should be treated as step‑function events:

• Escalation markets (NATO–Russia clash, nuclear use) reprice sharply.
• Global risk premia widen (equities, credit, vol, energy), even if the war on the ground remains positional.

For prediction markets, nuclear signals are less about who holds Chasiv Yar, more about systemic tail risk.

11.2 A 2025 indicator checklist – and how to update probabilities

Rather than track everything, focus on a short, repeatable dashboard. The table below summarizes the most useful categories and how they should move your scenario weights.

12. Sources, Data, and Further Reading

This roadmap is built on open, documented sources rather than opaque “insider” claims. Below is a guide to the main datasets and analytic work you can use to replicate or challenge the scenarios and priors used throughout—plus some cautions on their limits.

Core analytical frameworks

Strategic options and operational lessons

• Carnegie Endowment – strategic neutralization and the “steel porcupine”: Outlines Ukraine’s emerging theory of victory as strategic neutralization and details what a denial‑based defense architecture would require.
• CNA / RAND‑type analyses: Assess Russia’s lessons from the war, especially the emergence of the “transparent battlefield” and how ISR, drones, and artillery constrain large maneuvers.
• CSIS, RUSI, ECFR, Atlantic Council: Regular assessments of Russian and Ukrainian adaptation, the drone war, and the consequences of declining Western aid.
• Valerii Zaluzhnyi’s 2023 essay on modern positional warfare: A primary Ukrainian doctrinal statement on why the war has become positional and what it would take to break that stalemate.

These are the backbone for Sections 2–8 on Options A–C and the 2025–27 scenario grid.

Front lines, force levels, and fortifications

Territorial control and front geometry

• ISW / AEI ArcGIS StoryMaps and daily campaign assessments: High‑frequency frontline maps used to define key axes (Kupiansk, Chasiv Yar, Pokrovsk, Robotyne, Dnipro line).
• BBC “Ukraine in maps” and ACLED’s Ukraine Conflict Monitor: Cross‑checks on territorial control and patterns of clashes.
• ACAPS Q4 2024 update: Quantifies recent Russian gains (~500 km² in Q4 2024) and highlights pressure points like Bilohorivka, Kupiansk–Borova, Pokrovsk, and Vuhledar.

Trenches, minefields, and fortification depth

• Reuters / Brady Africk (AEI) satellite analysis, Planet Labs imagery, and related OSINT work: Map Russian defensive belts (Surovikin lines) and growing Ukrainian fortification programs.

Force levels and budgets

• IISS Military Balance; CFR and Dupuy Institute summaries: Underpin estimates of ~600,000 Russian personnel in/near Ukraine and 500,000–600,000 Ukrainian personnel, and the 2025 defense budgets ($145B Russia, ~$53.7B Ukraine).

Western aid, sanctions, and macro support

• Kiel Institute’s Ukraine Support Tracker: Main dataset for €399.8B in 2022–24 commitments, the 2023 peak and 2024 decline in military aid, and the rising share of financial support.
• NATO “Support for Ukraine” pages: Source for the €40B+/year military aid floor and 2024 totals (>€50B).
• EU/EEAS and Ukraine Facility documentation: Details on multi‑year EU macro‑support, conditionality, and the use of frozen Russian asset proceeds.
• US sources (CFR aid tracker, State/DoD releases, UkraineOversight.gov, Operation Atlantic Resolve reports): Track total US appropriations, drawdowns, and oversight findings.

These are the reference points for all aid‑trajectory assumptions and for the three aid paths (surge / plateau / erosion) used in Section 3 and later scenarios.

Historical base rates for positional wars

For Sections 9–10, the base‑rate discussion relies on:

• Specialist histories of WWI (1915–18 Western Front), the Korean War (1951–53), and the Iran–Iraq War (1980–88), plus modern operational essays (e.g., West Point’s Modern War Institute, Marine Corps Gazette) on transitions from maneuver to attrition.
• Zaluzhnyi’s own framing of the Ukraine war in explicit comparison to WWI‑style stalemate.

How to use these alongside prediction markets

To avoid trading on pure headlines:

• Cross‑check territorial markets against ISW/ACLED/BBC maps and ACAPS reporting on where the line is actually moving and how fast.
• Anchor war‑duration and settlement odds in the historical 2–7 year base‑rate window for positional stalemates, then adjust only when aid or Russian domestic indicators move.
• Benchmark aid‑sensitive markets against Kiel, NATO, EU, and US oversight data to distinguish real shifts in firepower from short‑term political noise.

Data limitations and fog of war

All these sources share hard constraints:

• Fog of war and propaganda: Both sides curate information; casualty and loss claims are heavily politicized.
• Classified data gaps: True force levels, stockpiles, and production rates are only partially visible; open estimates are ranges, not precise counts.
• Reporting lags and survivorship bias: Many datasets (Kiel, ACAPS, historical analogues) are updated quarterly or after the fact; frontline OSINT over‑represents sectors where footage is available.

Treat the numbers in this roadmap as structured estimates, not precise measurements. The real edge in trading comes from how quickly you update those estimates against evolving data—not from believing any single figure is exact.