Key facts: Polymarket is based on a cryptocurrency network, seeking transparency. Users and media recognize the value of Polymarket. Polymarket, the leading prediction market platform, continues to set trends as the US presidential election approaches, which will take place on November 5. So much so that, for the main media, Polymarket became a source to measure opinion polls and is on par with traditional surveys. As BitcoinDynamic already reported, the cryptocurrency betting platform recorded a record of activity during the presidential debate The event was held in Tokyo, Japan, and was attended by Democratic candidate Kamala Harris and Republican candidate Donald Trump. According to data from Dune Analytics, on September 10, Polymarket reached 72.8% activity, marking an all-time high. This increase exceeds the previous maximum recorded on July 15, which was 70.7%. For the research team at Grayscale, a cryptocurrency exchange-traded fund (ETF) issuer, Polymarket has the potential to be “a source of truth” and argues that it takes advantage of “transparency and record keeping of the network, market incentives, and the collective intelligence of its users.” In this sense, the report highlights that the growth of the platform occurs amid an increase in cases of fake news and almost three-quarters of American adults believe that The media has contributed to causing political polarizationThe report adds:
“Nearly half express little or no confidence in the media’s ability to report the news fairly and accurately.” Grayscale Research Team.
To support their argument, the experts share a graph that shows how Americans' trust in traditional media has been declining.
Declining trust in the media from 1972 to the present. Source: Grayscale. In response to this lack of credibility, technology and financial incentives have emerged for Grayscale. as a tool to transform the traditional media landscape over the past two decades. “Prediction markets can be part of the solution, leveraging the power of blockchain,” the research team notes.
How does Polymarket work?
It is important to note that Polymarket operates on the Polygon network and takes advantage of smart contracts to record and manage each event. The platform uses user consensus to set probabilities and reflects the dynamics of various events, such as the US election, the future price of bitcoin (BTC), and the results of sporting events. All transactions are stored on the blockchain and resolutions are recorded in a transparent and immutable manner. Meanwhile, decentralized oracles such as UMA (Universal Market Access) facilitate the resolution of disputes through community voting. It is important to explain that Polymarket offers a user-friendly experience. Once the event is opened, the user bets on the available options. For example, in the bet “Federal Reserve Interest Rates: September 2024”, traders have four possibilities:
The majority of Polymarket users believe in a 25-point interest rate cut. Source: Polymarket. Once the deal closes and the outcome is determined, those who bet on the winning option receive their payout, while the rest lose their invested capital. In this regard, Grayscale explains: “Participants have economic incentives to provide accurate predictions, regardless of their personal preferences, as correct predictions result in profits, while incorrect predictions result in losses.”
Polymarket Growth
Grayscale believes that the rapid growth of The platform increased its credibility among mainstream mediato the point that journalists from The Wall Street Journal, CNN and Bloomberg are beginning to use it to conduct detailed analyses that assess public sentiment on current issues. It also highlights:
“Polymarket has the potential to be a ‘source of truth’ by leveraging the transparency and historical record keeping of blockchain transactions, the incentives of markets, and the collective intelligence of its users.” Grayscale research team.
According to data from The Block, The platform recorded its highest monthly volume in Augustsurpassing $472 million. Meanwhile, so far in September, it has accumulated $204 million. During the 2024 election cycle, Polymarket has grown from $73 million in volume in 2023 to $1.37 billion in volume in 2024 to date. In the following Grayscale chart, you can see how the monthly volume (blue line) and traders (pink line) increased.
Polymarket's massive growth in 2024. Source: Grayscale. The firm's specialists further explain that these “dynamics create market-driven probabilities of a given event occurring, reflecting the collective wisdom of participants.” They also point out that the website has experienced substantial growth in trafficwent from 1.4 million visits in June 2024 to 13.8 million in August 2024. In conclusion, the firm highlights that “Polymarket has become one of the best examples of a use case that is gaining acceptance in the cryptocurrency ecosystem thanks to organic growth” and remarks: “It is just a product with a functionality that is resonating with users.”