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In just over three weeks, trading volume on Polymarket decentralized betting platform went from zero to nearly $ 3 million.
Starting Monday, “Will Trump Win the 2020 US Presidential Election?” Di Polymarket placed bets worth over $ 2.8 million, with each bet (for possible “yes” or “no” answers) costing less than a dollar. The platform allows users to place crypto bets on current events and hotly debated public topics, including politics, pop culture, business and health, according to its website.
Polymarket is a non-custodial platform, which means it does not hold or store users’ funds, and bets can be placed in the dollar-backed USDC stablecoin.
Prediction markets, where users can bet on the outcome of future events, is a key application of decentralized finance (DeFi), which allows users to conduct financial transactions on a blockchain without an intermediary.
Elections and political debates attract a large number of traders to these platforms; The decentralized prediction platform Augur launched five years ago, but struggled to get off the ground until mid-term election betting in the US gave it a modest boost in 2018.
“For me, the presidential election is the Super Bowl for prediction markets. Everyone is experiencing a huge increase in volume. It is natural for cryptocurrencies to follow suit, ”David Liebowitz, vice president of business development at decentralized encyclopedia Everipedia, told CoinDesk via Telegram.
The election also appears to be attracting new users to crypto betting platforms.
Learn more: All-in on DeFi: why centralized trading days are numbered
“There are people who use it, who aren’t even native cryptocurrency users. They don’t even fully understand cryptocurrencies, but they still use Polymarket,” said Shayne Coplan, founder of Polymarket.
Just over a week ago, Polymarket announced it had secured $ 4 million in its latest round of funding, attracting high-profile investors from the industry. Augur launched its new and improved version 2 in July this year.
After the elections
Users are perusing a number of betting and prediction markets in the run up to Tuesday’s election. Anonymous crypto betting platform YieldWars launched its election battle last night and has since attracted over $ 50,000 in bets. Users can stake the platform’s native $ WAR token or ETH.
YieldWars co-founder, passing by Owl, told CoinDesk via Telegram that the sudden increase in volume is anything but shocking given the size and importance of the election.
“Cryptocurrency-based prediction markets are expected to thrive on blockchain right now, but they have failed to deliver up to this point. The elections gave birth to prediction markets, but what will happen when they end? “Owl said.
Owl also said YieldWars may have found the “secret sauce” to keep people interested in betting by creating battle royale-style betting tournaments ideal for sporting events. The election battle is a one-time battle, in which two pools are running at the same time, one in each currency.
The platform partnered with Everipedia to use Associated Press (AP) election data to solve its election betting marketplace.
Read more: The time of prediction markets has come, but they are not ready for it
In October 2020, the well-known AP of the wire service, at first, partnered with Everipedia to create Oracle, an immutable record of the 2020 election results on a blockchain.
“I don’t think there can be a more reliable source than the AP and since Oracle was built using the Chainlink infrastructure, it made sense to choose this option,” Owl said.
According to Liebowitz, blockchain has long been considered the best platform for forecasting markets to thrive. But centralized betting platforms like PredictIt are still leading the game.
PredictIt has 214 “markets” or betting scenarios compared to 19 markets in the new-kid-on-the-block Polymarket. Starting Monday, PredictIt’s main event “Winner of the 2020 Presidential Election?” it had 116.7 million shares traded.
Coplan declined to say anything like this compared to Polymarket, calling it a “bizarre metric,” adding that its platform only tracked trading volumes in dollars, and had no equivalent.
Then, there is the expectation that the elections will increase betting volumes.
“It will only get bigger from here, especially four years from now when the next elections arrive,” Liebowitz said.
According to Coplan, the demand for blockchain-based betting markets has always been there.
“It was simply clear that there was a lot of demand for it. I would say that in the last two weeks the demand has actually materialized. However, these are only the very first few days, “Coplan said.
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