Polymarket: Not studying the rules = giving away money directly. A guy who swept the end of the day lost 200,000 USDT.
I studied the rules for 10 minutes and picked up 30x, making a total profit of 30,000 USDT.
Here's what happened: @Btc_Crush, @0xzheng888, and I discovered a huge discrepancy between the OP's and PM's predictions of Kodiak's market capitalization. The OP bought YES: 60 USDT → 100 USDT; the PM bought NO: 10 USDT → 100 USDT. Together, we bet 70 USDT to make 100 USDT, a 30% arbitrage opportunity.
But after placing the order, we realized something was wrong. Logically, the price difference should have corrected, but instead, it widened even further. I started looking at the rules, and after reading them, I was completely baffled—the settlement logic on both sides was completely different. Theoretically, it could result in a double loss, ending up with nothing (we had already lost 10,000 USDT).
Just as I was about to accept the loss, I noticed that the settlement rules on PM were very vague: they used the closing price of the "most liquid market" as the benchmark. Everyone assumed it was Gate because it had the highest trading volume, but after checking all the exchanges I could find, I discovered that the most liquid market was actually Kodiak's own built-in DEX, with 400,000 USDT. The price of NO was only 3-5, meaning a 20-33x payout. So, a few of us immediately started buying NO like crazy, accumulating several thousand USDT in total.
_____________________________________ Actually, the reason this trade was profitable was largely because a guy named CR7 entered the market and spent 200,000 USDT to drive the price of YES up to 90+. At that moment, I knew: he was going to settle the accounts for us 🤣 That's why we were able to buy NO at such a low price. Final result: The guy lost 200,000 USDT and left, while we, with a 30x return, pocketed 30,000 USDT. The only takeaway afterward is: Even the largest prediction market right now is incredibly unregulated. Data sources are unclear, settlements are ambiguous, and everything depends on assumptions. But the more unregulated it is, the more opportunities there are, and that's why people will throw money away within the rules.
