Markets
Predict the next president and make money with decentralized markets
What’s the buzz around decentralized prediction markets for the 2024 elections? Learn how to predict the next president and profit from your knowledge.
Have you ever wondered if you could predict the outcome of an event and profit from your predictions? Decentralized prediction markets make this possibility a reality. These markets have recently experienced explosive growth, especially in the run-up to the 2024 US presidential election.
Polymarket, a cryptocurrency-based prediction market platform, has seen a dramatic increase in activity. Dune AnalyticsPolymarket’s volume surpassed $100 million in June alone, marking a record month in the platform’s breakthrough year.
The surge continued in July, with $9.3 million worth of bets placed in the first day alone. This single-day volume exceeded the typical monthly volumes seen on Polymarket last year, which ranged between $3 million and $8 million.
From January to May 2024, Polymarket’s monthly volumes ranged from $40 million to $60 million, a gigantic 7-12x increase over the previous year’s monthly volumes. In June, $111 million worth of bets were placed, the highest level ever recorded by the platform.
Polymarket Monthly Volume | Source: Dune Analytics
One of the most popular contests on Polymarket is the “Winner of the 2024 presidential electionwhich has attracted more than $208 million in bets since its inception. Currently, the odds favor Donald Trump at 66% and Joe Biden at 21%.
Analysts at research and brokerage firm Bernstein note Blockchain-based platforms like Polymarket are amplifying the efficiency of election markets by providing transparency and liquidity. They mentioned this in a recent note to their clients, highlighting how Polymarket, built on blockchain technology, is increasing public appreciation for the role of crypto in politics.
With such increased interest in these platforms, let’s delve deeper into how they work, explore notable bets, identify the top platforms, and find out how you can participate and potentially profit without placing any bets.
What are decentralized prediction markets and how do they work?
Decentralized prediction markets are betting platforms that allow people to bet on the outcomes of real-world events using blockchain technology.
These markets operate on decentralized networks, meaning there is no central authority controlling transactions. Instead, they use smart contracts— self-executing contracts whose terms are written directly into the code. This ensures that all transactions are transparent, secure and tamper-proof.
One of the most popular decentralized prediction markets is Polymarket. Polymarket runs on Ethereum (ETH) Layer 2 (L2) network, Polygon (MATICS), and allows users to speculate on various events, such as political outcomes, entertainment and sports, using the stablecoin USDCThis integration ensures liquidity and stability of transactions.
Polymarket uses an automated market maker (AMM) pool model similar to Uniswap (United). Liquidity providers provide liquidity to the on-chain market and users trade these tokenized stocks to place their bets.
For example, if you think a particular candidate will win an election, you can buy “Yes” stocks at a price that reflects current market probabilities. If the event happens as you predicted, you make a profit. If it doesn’t, you make a loss. This system allows you to profit from your knowledge and predictions about various events.
Polymarket is not the only player in the decentralized prediction market. Platforms like Augur and Hedgehog also offer similar services, allowing users to speculate on a variety of events.
Augur, for example, runs on the Ethereum blockchain and uses a native token (REP) for betting. Hedgehog is another emerging platform, which leverages the same principles of decentralized betting with an emphasis on user-friendly interfaces and diverse market offerings.
Popular Paris on Polymarket
The buzz surrounding the 2024 US presidential election has sparked a flurry of activity on Polymarket. Let’s take a look at some of the most popular bets and what they reveal about public opinion.
Biden and his disappointing debate performance
The first presidential debate on June 27, 2024 marked a critical shift in betting habits on Polymarket. Joe Biden’s performance, widely criticized as one of the weakest since the beginning of the era of televised debates, sparked a surge in betting.
Before the debate, Biden had a 91% chance of being the Democratic nominee. However, after his performance, this abandoned at 71%, with more than $21.2 million going to Biden and $5.06 million going to Kamala Harris, who has garnered 11% support so far.
At the same time, the likelihood that Biden will drop out of the race has increased sharply, from 19% before the debate to 44% as of July 1. Although it has slightly improved At 35%, the volatility reflects the uncertainty surrounding his campaign.
On the Republican side, betting sentiment is overwhelmingly in favor service With more than $6.6 million in bets, Trump would have a 99% chance of becoming the Republican nominee, a stark contrast to the fluctuating confidence in Biden’s campaign.
Forecasts for key states
Key states play a crucial role in determining the outcome of the election, and Polymarket’s prediction polls point to a Republican victory in key states.
For example, Republicans are predicted to win Nevada (71%), Michigan (53%), Pennsylvania (58%), Arizona (73%), Wisconsin (56%), Georgia (80%) and North Carolina (83%).
With more than $3 million in total bets backing these predictions, the Republican Party emerged as the big winner in all of these key states.
There is also a notable prediction regarding international affairs: there is a 56% chance that Israel will invade Lebanon before September, adding fuel to the fire of already complex geopolitical situations around the world.
How to make money from decentralized betting markets?
Decentralized prediction markets offer opportunities to make money, but they also come with very high risks. Here’s how you can profit from these platforms, along with some important tips.
Become a Liquidity Provider
One of the easiest ways to make money on platforms like Polymarket is to become a liquidity provider. Here’s how it works:
- Deposit in USDC:You can deposit USDC into the platform’s liquidity pool.
- Earn fees:By providing liquidity, you earn a share of trading fees every time users place bets.
- Automated Market Maker (AMM):The platform uses an AMM model, ensuring that your funds are used to facilitate transactions and bets efficiently.
This method provides a steady stream of income without directly betting on events, making it a lower risk option compared to outright betting.
Make direct bets
Another way to make money is to place straight bets based on the odds of specific events. For example:
- Choose an event:Select an event you want to bet on, such as the outcome of the presidential election.
- Analyzing probabilities:Consider the current probabilities and make your prediction.
- Place your bet:Bet an amount you are comfortable with, knowing that if your prediction is correct you can get a significant return.
Besides Polymarket, several other platforms offer decentralized prediction markets. These platforms work in a similar way, allowing you to provide liquidity or place direct bets on various events.
While these opportunities can be lucrative, they carry very high risks. If the odds are not in your favor, you can suffer substantial losses.
It is essential to exercise caution in your trading and never invest more than you can afford to lose. Always do your research thoroughly and consider seeking advice from financial experts before taking any action.
Disclosure: This article does not constitute investment advice. The content and materials presented on this page are provided for educational purposes only.