- This is only a small portion of Polymarket wallet revenue.
- Whale traders dominate the platform.
- There is no slowdown in trading activity.
Recently, Polymarket, a distributed Polygon-based prediction platform, has been receiving a lot of attention. Ahead of the upcoming US election, the platform has recorded a total of $1 billion in bets on this event alone.
Traders are interested in the possibility of betting on real events, especially important ones. However, despite its popularity, recent data shows that most traders are losing money. In other words, only 12.7% of Polymarket wallets subsequently reported realized profits.
Why Most Polymarket Betters Lose Money
Polymarket has received a lot of attention ahead of the upcoming US election. However, its performance for traders leaves much to be desired. Data from LayerHub on October 10 showed that 87.3% of the 176,076 wallets that interacted with Polymarket reported losses.
Most of these wallets bet small amounts and reported returns of less than $100. Just 2,148 wallets earned more than $1,000 from over 10.79 million bets on the platform. There are many reasons for this low profitability, with low liquidity being the biggest problem.
There is considerable liquidity on popular bets such as the winner of the US election, but this is the exception. According to a recent report by Crypto.com, most bets on Polymarket have low liquidity. This means that there are few counterparties that can match the size of your trade. Low liquidity causes price declines, forcing traders to execute trades at less favorable prices.
Polymarket faces new competition
Despite Polymarket’s dominance in prediction markets, the platform may be more vulnerable than it appears. In August, the platform achieved a trading volume of $473 million. However, according to a report by Crypto.com, 91% of this volume is related to the US presidential election.
In contrast, some of Polymarket’s competitors have much better access to liquidity. This includes the Solana-based BET platform powered by the Drift perpetual futures exchange. BET’s main advantage is that it has access to $500 million in liquidity from Drift.
By providing more liquidity, these platforms can help make prediction markets more efficient and profitable for users.
On the flip side
- Last July, through D8X Exchange, users Take advantage of Polymarket betting. However, this has raised concerns, especially due to the risky and unpredictable nature of these positions.
- Betting markets like Polymarket also serve to gauge the likelihood of future events. for example, PolyMarket Probability Prediction President Joe Biden is expected to drop out of the primary.
Why This Matters
Polymarket’s past performance is very important for traders looking to participate in the betting market. This shows that even if traders predict the outcome, they may have difficulty realizing profits.
Learn more about Polymarket’s token launch.
Polymarket Mulling Token Launch for New Fund Raising: Is It Time?
Learn more about Solana’s latest achievements:
Solana dominated the token launch with 87% market share.