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If you are a crypto enthusiast, it would be hard to miss the growing popularity of a crypto-powered prediction market called Polymarket.
Not only are gamblers wagering on everything from the November 2024 U.S. Presidential elections to the Paris Olympic Games, but individuals are now looking to Polymarket as “a source of accurate, real-time truth.”
The belief is that bettors always put their money where their mouth is, and, therefore, exclusive, insider and expert knowledge on important world events will be reflected in respective Polymarket bets.
Is that the case? That is a hard one to answer, but if you had put $5 a few months ago on Polymarket taking crypto by storm, you would have something to show for it.
What is Polymarket, and how do you use it? This article answers all these questions and more.
Key Takeaways
- Polymarket is built on top of the Polygon PoS blockchain.
- Users place bets using USDC stablecoins.
- As of August 1, 2024, the 2024 U.S. Presidential Election winner had attracted bets worth over $474.4 million.
- Polymarket incentivizes users to increase market liquidity by rewarding USDC to users who place limit orders.
- Since Biden dropped out of the 2024 Presidential race, Trump’s odds to win have fallen from 64% to 53%, as of August 1, 2024.
What is Polymarket?
Polymarket is a crypto-based prediction marketplace that allows users to bet on real-life topics such as politics, international relations, sports, pop culture, business, science, and more.
The platform is built on top of the Polygon PoS blockchain and uses USDC stablecoins for bets.
Polymarket has a hybrid-decentralized model, where bets are matched and ordered by an off-chain operator, while bet settlement and execution occur on-chain in a decentralized manner.
How to Place Bets on Polymarket
There are so many world events you can bet on in Polymarket. In our example, we will take the most popular bet on Polymarket i.e. the 2024 U.S. Presidential Election Winner which has attracted bets worth over $474.4 million, as of August 1, 2024.
Steps to Place Your First Polymarket Bet
Logging in
You can log in using your Google account, but the fastest way to get onboarded is to use your self-custodial crypto wallets, such as MetaMask or Coinbass Wallet.Depositing USDC
Polymarket only accepts USDC bets, so you will have to deposit USDC stablecoins to your Polymarket account. You can send USDC to your account from your crypto wallet or buy USDC off the market. Ensure that the USDC is on the Polygon PoS network.Betting on Polymarket
Once you have funds in your account, you can start betting. Let’s say you want to bet on the 2024 U.S. Presidential Election Winner, you will find numerous candidates with “Yes” and “No” options against their names.
If you believe Donald Trump will win, you can bet on “Yes” for Trump. At the time of writing, Trump’s odds of winning the election were at 53%; therefore, 1 share of “Yes” for Trump was priced at 53 cents.
Enter the number of shares you want to buy for “Yes” on Trump. You can also place limit orders that will automatically trigger once your pre-determined market price is reached. Polymarket incentivizes users to increase market liquidity by rewarding USDC to users who place limit orders.
If Trump ends up winning the elections, your “Yes” shares (bought at 53 cents) will be worth $1, resulting in a profit of 47 cents or 88.6%.
You can also sell your shares at any time. For example, if Trump’s winning odds rise to 60% one month before the elections, you can sell your “Yes” shares at 60 cents.
Similarly, you can bet on Kamala Harris, Robert Kennedy, and Michelle Obama. Even Kanye West was among the options whose “Yes” shares were priced at 0.1 cents — we’ll see if that plays out.
this guy will win $271,000 when Kanye wins the 2024 election pic.twitter.com/LUZMknhvJb
— Polymarket (@Polymarket) January 22, 2024
Would You Bet on Polymarket Over Traditional Polls?
Polymarket is being touted as a platform where one can find unbiased and unfiltered truth in real time.
Instead of relying on polls and surveys to gauge future events, people are now looking to Polymarket to gain insights on crucial events such as presidential elections.
A key advantage of Polymarket is that it updates event probabilities in real time, taking into account the latest information available to the public.
For example, since U.S. President Joe Biden announced his exit from the 2024 Presidential race on July 21, 2024, Trump’s odds to win have fallen from 64% to 53%, as of August 1, 2024.
Trump's odds are down 18% since he was shot. pic.twitter.com/1tTXL92Gf4
— Polymarket (@Polymarket) August 1, 2024
“Traders combine all available information: news, polls, and expert opinions, and make informed trades based on that combined knowledge. Their economic incentive ensures that as more savvy traders participate, the market’s price (probability) will change to more accurately reflect the true current odds,” said Polymarket.
On X, Ethereum co-founder Vitalik Buterin said prediction markets and community notes were becoming “two flagship social epistemic technologies of the 2020s.”
Prediction markets and Community Notes are becoming the two flagship social epistemic technologies of the 2020s.
Both truth-seeking and democratic, built around open public participation rather than pre-selected elites.
I want to see many more things like this.
— vitalik.eth (@VitalikButerin) July 2, 2024
“Both truth-seeking and democratic, built around open public participation rather than pre-selected elites. I want to see many more things like this,” wrote Buterin.
But, when it comes to U.S. presidential election prediction on Polymarket, there is a notable issue.
The Commodity Futures Trading Commission (CFTC) has banned Polymarket from making its prediction platform available to U.S. residents since January 2022.
How sure can we be about the accuracy of Polymarket polls on the U.S. presidential elections if U.S. citizens are not participating?
The Bottom Line
At first sight, Polymarket can seem like a typical crypto platform made for crypto degens to make wild speculations on. But there is more than what meets the eye.
Public sentiment—with money where your mouth is—is a massively important indicator of key world events such as presidential elections, U.S. Federal Reserve interest rate outlooks, and more.
In a world where truth and opinion are more co-mingled than anything you will find in crypto, platforms like Polymarket will continue to thrive.
