The 2024 US presidential election is about to be unveiled, and the eyes of the world are focused on this political race. In addition to traditional media and polling agencies, a prediction platform based on encryption technology - Polymarket - has also emerged as a force influencing public opinion in this election. Polymarket not only provides a decentralized prediction market, but also allows global users to participate in predicting the outcome of the US election. This article will delve into the background, operation, and how Polymarket is influencing this election, as well as discuss the challenges and potential risks it faces.
What is Polymarket?
Polymarket is a decentralized prediction platform that allows users to predict the outcome of future events. From political elections to sporting events, and even economic indicators and social issues, users on Polymarket can participate in predictions using digital assets. This not only allows users to participate in the events, but also reflects the current trends of public opinion as the market price fluctuates with the predicted results.
In the 2024 US presidential election, Polymarket plays an important role. Currently, global crypto users are using Polymarket to predict the chances of Donald Trump and Kamala Harris being elected, and observing the market sentiment based on the real-time data changes on the platform. The platform's operation is similar to a transparent market, not only allowing more people to participate in event prediction, but also making the data publicly available, allowing the public to immediately grasp the market's view on the election.
Polymarket's Team and Background
Polymarket was founded by Shayne Coplan, with the initial goal of creating a transparent and open prediction market. Coplan has a rich background in crypto and blockchain technology, which enabled him to develop Polymarket, a platform that uses blockchain technology to ensure transparency. Since its launch in 2020, Polymarket has successfully raised multiple rounds of funding and attracted support from well-known investors.
Among Polymarket's investors are heavyweight figures from the crypto and tech worlds. For example, Ethereum co-founder Vitalik Buterin, Aave founder Stani Kulechov, and renowned angel investor Balaji Srinivasan have all expressed support for Polymarket. In addition, Peter Thiel, the founder of the famous investment firm Founders Fund, has also led an investment round in Polymarket. The participation of these experts and entrepreneurs from the crypto field has enhanced the market's trust in the platform and increased its influence, making Polymarket a leading player in the decentralized prediction market.
Polymarket's Operating Principles
Polymarket's operating principles are based on blockchain technology, which means that all transactions, predictions, and results will be transparently recorded on the blockchain, ensuring openness and immutability. This design allows users to participate in the prediction of various events without having to trust the platform itself.
On Polymarket, users use the stablecoin USDC to participate in predictions. USDC is a digital currency pegged to the US dollar, allowing users to buy and sell prediction shares at a stable price. In the 2024 US presidential election prediction, Polymarket has set up two different outcome options for the chances of Donald Trump and Kamala Harris winning. Users can choose to support the victory of a particular candidate and purchase the corresponding shares.
The unique feature of Polymarket is its real-time price adjustment mechanism. As more users believe a particular candidate will win and purchase shares of that option, the price of those shares will rise accordingly. Conversely, the price will decrease. This means that the platform's prices will always reflect the market's expectations for the candidates' chances of winning, allowing other users to immediately grasp the market sentiment.
Furthermore, Polymarket does not rely on centralized institutions or intermediaries. User funds are managed by smart contracts on the blockchain, avoiding the potential for fraud and security issues that may arise in traditional financial systems. This non-custodial approach also gives users greater control over their assets, without the need to trust a third party to manage their funds.
What Problems Does Polymarket Solve?
The emergence of Polymarket has solved several key issues in traditional prediction markets:
1. Transparency and Fairness: Traditional prediction markets are often managed by centralized institutions, which can raise concerns about fairness and manipulation. Polymarket operates on the blockchain, with all data and transactions publicly recorded on the blockchain, ensuring transparency and effectively preventing manipulation.
2. Global User Participation: Traditional prediction markets often restrict the participation of users based on their location or identity, but Polymarket, through blockchain technology, allows global users to participate on equal terms, breaking down geographical and identity barriers.
3. Immediate Reflection of Market Sentiment: Polymarket's automatic price adjustment mechanism allows the market to immediately reflect changes in public opinion, providing users with more accurate information to make better prediction decisions.
4. Low Threshold: For newcomers, traditional prediction markets may be cumbersome to operate and require a higher investment threshold. Polymarket's simple and intuitive interface makes it easy for users, even those unfamiliar with blockchain and crypto, to participate in predictions.
Potential Risks and Pitfalls of Polymarket
Although Polymarket provides a more transparent and open prediction market, its operating model also brings some potential risks and challenges:
1. Impact of Large Investors: Polymarket is an open market, which means that users with large amounts of capital can influence market prices and thus affect other users' predictive judgments. For example, users with substantial funds can significantly increase the winning probability of a particular candidate by purchasing a large number of shares for that candidate, leading other users to mistakenly believe that Donald Trump or Kamala Harris has higher support.
2. User Bias: The user base of Polymarket is primarily from the crypto community, which may have a higher level of support for certain candidates, such as Donald Trump. This can result in Polymarket's data being skewed towards specific candidates, not necessarily representing the overall sentiment of voters. Therefore, Polymarket's prediction results may not accurately reflect the actual voting intentions of American voters.
3. Regulatory Challenges: The operation of decentralized prediction markets involves significant capital flows, which may attract the attention and restrictions of regulatory authorities. In 2022, Polymarket was fined by the U.S. Commodity Futures Trading Commission (CFTC) for unauthorized financial activities. In the future, if regulators further regulate prediction markets, Polymarket may face stricter regulatory constraints.
4. Accuracy of Results: Polymarket's prediction results depend on the views of the majority of market participants, but in some cases, the opinions of a minority group may also be accurate. This "majority rule" mechanism may lead the market to be biased towards mainstream opinions and may not truly reflect the actual outcome of an event.
Current Prediction Data for the U.S. Presidential Election
According to the latest data from Polymarket, as of now, Donald Trump's winning probability is around 56.3%, while Kamala Harris's winning probability is around 43.9%. However, these proportions will continue to adjust as the election approaches and the market participants change, with many people updating their predictions based on the latest polls and news. This also means that the data on Polymarket is not static, but rather changes with people's perceptions of the candidates' support, becoming an important reference for reflecting current public opinion.
Polymarket's data has become the basis for many people to observe the election situation, and some media and analysts also refer to these data to speculate on the development of the election situation. The advantage of these real-time data is that they can immediately reflect the market's confidence in the candidates' chances of winning, making it an interesting indicator for observing the election situation.
Conclusion
In the 2024 U.S. presidential election, Polymarket, with its decentralized prediction market characteristics, allows global users to participate and understand the changing election situation. Through the application of blockchain technology, Polymarket provides a transparent, real-time, and open prediction environment, allowing users not only to make event predictions but also to understand the current trends of public opinion from the market data.
Polymarket demonstrates the application value of blockchain technology in the prediction market and prompts people to rethink the potential of decentralized finance. However, the operation of this platform also faces challenges from the impact of large investors, user bias, and legal regulation. These challenges remind us that while decentralized markets can bring a certain degree of transparency, there are still areas that need improvement.
Regardless of the final outcome of the U.S. election, I personally believe that the crypto market will continue to develop, constantly attracting new capital and users. Cryptocurrencies will continue to move forward, as this is a foregone conclusion. With more and more capital and users entering this field, the potential of the crypto world will be continuously released and will play an increasingly significant role in future global events. Polymarket is a prime example of the remarkable value in the crypto market - through a transparent and free prediction platform, it allows everyone to participate in decision-making for the future.
