Polymarket is an online peer-to-peer prediction market platform where users can trade stocks based on the outcome of real-world events. It leverages blockchain technology and smart contracts to provide a trustless, transparent, and user-friendly way to speculate on future events in sports, politics, pop culture, and science.
Polymarket Overview no way~is That history
Polymarket was founded in 2020 by Shayne Coplan and is built on the Ethereum blockchain. It launched its beta version in the same year, allowing users to trade on a variety of topics. It also raised $4 million in a Series A funding round with investors including Polychain Capital, CoinFund, and other big names in the blockchain space.
Polymarket has made significant profits. traction During the 2020 US presidential election, it attracted people interested in betting on the outcome of the election, and its user base and trading volume grew rapidly. However, in 2021, the platform faced the following problems: scrutiny Regarding concerns from the Commodity Futures Trading Commission regarding the unlicensed binary options offering, Polymarket later stable In early 2022, it settled with the CFTC, agreeing to pay $1.4 million, curtail non-compliant markets on its website, and “cease and desist from violating CEA and CFTC regulations as charged.”
As part of the agreement, Polymarket implemented blocking measures that prevented US users from trading on the platform, but still allowed them to view the information marketplace.
Despite regulatory challenges, Polymarket continues to grow. In 2024, the platform high A $45 million Series B funding round led by Peter Thiel’s Founders Fund, with participation from high-profile investors including Ethereum co-founder Vitalik Buterin, has also hired veteran futures industry executive Richard Jaycobs to help navigate U.S. regulatory activity, and has brought on a reputable statistician and election commentator. Nate Silver As an advisor.
In 2024 alone, Polymarket saw over $400 million in transactions, much of which was driven by the US elections.
Features and characteristics
Polymarket allows users to create markets for any event by specifying outcome options and initial liquidity, decentralizing the process, and allowing multiple markets. Users can buy and sell shares on the outcome of an event, with prices determined by supply and demand, reflecting the collective wisdom of the crowd. Users can make predictions on topics as diverse as who the next US President will be, the outcome of the Super Bowl, and who the next James Bond actor will be.
Polymarkets displays the probability of an event occurring as a dollar value. For example, if former President Donald Trump has a 70% chance of being re-elected in 2024, Polymarkets displays this as $0.70. When the event is completed, the shares on the right side will convert to $1, so a share purchased at $0.70 will be worth $1. The shares on the wrong side will be worthless.
Polymarket also allows users to place limit orders for specific events. Using the election example, a user could place a limit order for a Trump presidency at $0.40, hoping that some event or series of events will occur before the election that will reduce Trump’s chances. If this happens, the user’s order will be filled at $0.40 instead of $0.70, increasing the potential profit if the bettor is right.
Polymarket Competitors
Polymarket’s main competitor is Augur, one of the earliest decentralized prediction markets, also based on Ethereum, allowing users to create and trade event outcomes using a similar decentralized model. Another competitor is Gnosis, an Ethereum-based prediction market platform focused on providing the infrastructure for creating prediction markets, and has developed a variety of tools and applications to support this ecosystem. PredictIt is also a more traditional, centralized prediction market platform focused on political events, and operates under a no-action letter from the CFTC, which provides a regulated framework.
Polymarket has seen continued growth, with the number of active monthly traders steadily increasing over the past few months in particular.
Polymarket’s monthly transaction volume also showed similar growth.
Disclaimer: This article was created with the help of OpenAI’s ChatGPT 3.5/4 and has been reviewed and edited by our editorial team.
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