The decentralized prediction market Polymarket is gaining popularity again, and the number of new accounts on the platform has reached a record high. According to Dune data, Polymarket’s transaction volume reached US$51.34 million in January 2024, a monthly record high.
Bet on who will be elected President of the United States at Polymarket
The reason for the recent surge in Polymarket traffic is not only whether the Bitcoin ETF in early January will pass this prediction, but also the US election.
There are still nearly ten months before the US presidential election. As one of the candidates and a politician who is good at playing with social media, Trump has repeatedly forwarded his claims on Polymarket on the media he founded, Truth Social. rate, which brought a lot of exposure to Polymarket. Political bets are seeing a lot of traffic on Polymarket these days.
The picture on the left shows the traffic ranking on the Polymarket site; the picture on the right shows a screenshot of Trump’s odds on Polymarket forwarded by him.
The most popular prediction market on Polymarket is "2024 Presidential Election Winner". The starting transaction price of each result is 0.5 US dollars. The price will change according to the amount bet by users on the winning and losing sides. The price (odds) represents the current The probability of the event happening, that is, the current price of $0.5 means that Trump has a 50% probability of being elected president. If the price rises to $0.7, that means Trump has a 70% chance of winning the nomination. At the time of writing, $33.67 million was bet on the market.
Polymarket's operating model is quite unique. Users can turn their predictions about something in the future into actual investment portfolios, and these investment choices are actually concrete representations of users' in-depth interpretation of various types of information and future prospects. Successful predictions not only bring potential financial benefits, but also demonstrate the trader's deep insight into a specific topic. For example, related to Bitcoin ETF
Since its debut in 2020, Polymarket has been the premier destination for crypto degen betting, allowing users to buy and sell shares using USDC via a crypto wallet, and market makers earning weekly rewards for providing liquidity on each market. Political election prediction is one of the biggest driving forces behind the widespread spread and popularity of prediction markets. When the two are combined, Polymarket once again attracts countless attention. Prior to the election month of 2020, Polymarket’s monthly revenue had even surpassed SushiSwap to become the fourth highest fee-generating project in the blockchain.
Even the founder of Ethereum bets on political elections on Polymarket. A month ago, Vitalik said on Warpcast, “My very conservative, betting on boring but potentially winning multi-market political portfolio seems to perform well. good".
Beyond Crypto, Polymarket’s PMF
Although Polymarket is an actual decentralized market project deployed on Polygon, it has completed its transformation to obtain PMF outside of encryption. As you can see on the navigation bar of the Polymarket homepage, Crypto is just one of the sections. In addition, there are topics such as politics, the situation in the Middle East, sports, and pop culture. Mass Adoption has been a coveted target for some crypto projects, and Polymarket seems to be showing its potential once again.
Last week, 1confirmation’s GP Richard Chen mentioned in the article “Computers vs. Casinos: The Crypto Industry’s Culture Wars” how casino legend Steve Wynn transformed Las Vegas from a single gambling center to a comprehensive entertainment destination. Wynn When The Mirage opened in 1989, it was the first to offer rich entertainment experiences outside the casino, such as concert performances and shopping malls. The success of this strategy prompted other casinos to follow suit, greatly increasing the number of tourists visiting Las Vegas.
Therefore, Richard believes that the crypto industry should also reduce its zero-sum game and shift towards providing a positive-sum experience. The prediction market is one of the best choices to accomplish this mission, both as a betting platform and as a source of information.
Market predictions have long been considered the holy grail of cognitive technologies, and as early as 2014, Vitalik expressed interest in using prediction markets as a governance mechanism (i.e., futarchy). However, prediction markets have not made much progress in practical applications so far, and usually suffer from a series of common problems: most participants tend to be irrational, and people with "correct knowledge" cannot do it unless they can involve large amounts of money. Be willing to invest time and risk in betting, and the market is often illiquid.
Vitalik mentioned in a blog post published yesterday, "If people are willing to bet tens of billions of dollars on sports events, why wouldn't they invest enough money on U.S. elections or other major events to attract serious participants? ” However, this argument must face the fact that previous versions have not reached this scale. However, Vitalik is still optimistic about the prediction market because he believes that artificial intelligence will have the possibility of widespread participation in the prediction market.
But before it is widely combined with AI, we still need to consider the problems currently facing Polymarket. One is, in addition to politics (more controversial and cyclical events), what other events can bring stable users and traffic to the platform; the other is On the one hand, if Polymarket succeeds, what benefits will it bring to the crypto market? What kind of derivatives can be built around it to keep this market alive?
A Taylor Swift fan on Twitter retweeted Polymarket's prediction market for the 2024 Grammy's Best Song and compared the odds between Taylor and another pop star, Billie Eilish. As more and more players from traditional markets participate, the prospects for Polymarket may become clearer.
