Launched in 2020, Polymarket has swiftly become a key player in prediction markets, with billions in bets, especially on elections, sparking both fascination and curiosity. Is it just a betting platform or a true collective intelligence tool? Let’s delve into this prediction giant.
Polymarket is a prediction markets platform that allows anyone to bet on the outcome of future events: sports, cryptocurrency, music, economics, and more. The principle is simple: users buy and sell “shares” of possible outcomes. For example, on a market like “Will Trump win the election?”, you can purchase either “Yes” or “No” shares.
The key distinction of Polymarket is its decentralized nature. The platform is built on the blockchain Polygon, a layer-2 network of Ethereum, ensuring fast, transparent transactions with low fees. Unlike centralized and regulated US competitors like Kalshi, Polymarket operates without intermediaries holding user funds (non-custodial) and doesn’t require KYC (Know Your Customer) procedures.
All transactions are managed by smart contracts, ensuring that bets are executed and paid automatically according to predefined terms.
The functioning of Polymarket is entirely based on buying and selling “outcome shares” using the stablecoin USDC. For each event, the platform creates a market with at least two possible outcomes. A user who believes in a particular result buys corresponding shares. The price of a share, which fluctuates between $0.01 and $1, is interpreted by the market as the probability of that event occurring. For example, a price of $0.60 suggests a 60% probability.
This price constantly evolves based on supply and demand; if more and more participants buy “Yes” shares, their price will increase, signaling growing confidence in that outcome. Once the event is over, the result is validated by a decentralized oracle, which ensures the accuracy and impartiality of the data.
Finally, holders of winning outcome shares can exchange each share for 1 USDC, while losing outcome shares become worthless. It’s important to note that users can sell their shares at any time before the market resolution to secure a profit or limit a loss.
This mechanism transforms speculation into a form of collective intelligence, where the market price becomes a real-time probability indicator.
The strength of Polymarket lies in the immense diversity of markets offered. The only limitation is that an event must have an objectively verifiable outcome. The most popular categories include:
Advantages
Disadvantages
Let’s now compare Polymarket and Kalshi, its biggest competitor in the market.
| Feature | Polymarket | Kalshi |
|---|---|---|
| Model | Decentralized (Polygon Blockchain) | Centralized |
| Currency used | Crypto (USDC) | Fiat (US Dollar) |
| Regulation | Not regulated in the USA (operates offshore) | Fully regulated by the CFTC in the USA |
| KYC Process | No KYC required | Mandatory KYC |
| Market types | Very broad and reactive (politics, crypto, etc.) | More limited, focus on economics and finance |
| Accessibility | Global (with some exceptions) | Primarily focused on the United States |
Opinions on Polymarket are often polarized, reflecting both the strengths and weaknesses of the platform. Ratings on review sites like Trustpilot can be volatile, often affected by waves of negative reviews following market resolutions deemed controversial.
On the positive side, many users praise the platform’s smooth and intuitive interface, which makes it easy to use even for beginners. The clarity of markets and readability of probabilities are frequently highlighted. Additionally, the diversity of markets and the ability to bet on almost any current topic are perceived as major advantages.
However, like many similar platforms, the most recurring complaint concerns the resolution of certain markets. Users express dissatisfaction with outcomes they consider incorrect or unfair, sometimes pointing to issues with the UMA decentralized oracle. Furthermore, during the American elections, some participants lamented a concentration too heavily focused on this market. This potentially limited the platform’s appeal to an international audience less interested in this specific topic.
Our opinion on Polymarket is generally positive. The platform has brilliantly demonstrated one of the most relevant use cases of blockchain technology: creating a global, transparent, and highly efficient information market. Its ability to aggregate “crowd sentiment” to produce responsive and accurate predictions is impressive. The record volumes reached during major events prove that Polymarket is no longer a niche project but a true financial and informational heavyweight.
However, its meteoric rise should not obscure the risks. The absence of a clear regulatory framework in many jurisdictions, particularly in Europe, exposes users to legal uncertainty. Moreover, the speculative nature of the platform implies a risk of total capital loss, a point that every user should keep in mind.
In conclusion, Polymarket has established itself as the undeniable and probably unbeatable leader in decentralized prediction markets. It’s a powerful tool, not only for savvy speculators but also for anyone seeking to understand real-time probabilities of events shaping our world. Its future will depend on its ability to navigate an evolving regulatory environment while continuing to innovate.
Gaston has been a writer for over 7 years and a passionate cryptocurrency enthusiast since 2020. He loves exploring the crypto ecosystem and is now dedicated to sharing his insights and discoveries through InvestX.
It operates in a regulatory gray area in many countries and has been sanctioned by the CFTC in the United States.
Only the USDC stablecoin is used for betting on the platform.
No, the platform does not require any KYC procedure.
Results are confirmed by a decentralized oracle to ensure impartiality.
No, the maximum loss is limited to the amount you wagered.
The platform charges fees on winnings but not on the sale of shares.
No, access is blocked for U.S. users following an agreement with the CFTC, although a potential return is being considered.
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