Polymarket · Wired · Ars Technica
Polymarket saw $600 million in election trades after the elections were over
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Prediction market boosters often tout the platforms as barometers of public opinion, or even “truth machines” offering a clearer picture of where things are headed than polling or other data.
Key facts
- The company is now valued at an estimated $21 billion, and earlier this summer, it announced that its annualized revenue was now over $1 billion
- Polymarket recently raised an over $1 billion round of funding led by 1789 Capital, the venture capital firm where Donald Trump Jr. is a partner
- Nearly all of it—about $284 million—came from pairs of accounts repeatedly buying and selling with each other,” says former Polymarket trader Chris Park, who now runs the prediction-market forensic
- Two global election markets on Polymarket’s offshore platform, for instance, generated over $600 million in trading volume, far more than most political markets typically attract
Summary
Two global election markets on Polymarket’s offshore platform, for instance, generated over $600 million in trading volume, far more than most political markets typically attract. This summer, Ethiopian Prime Minister Abiy Ahmed’s Prosperity Party cruised to victory in federal elections, winning 438 parliamentary seats and paving the way for him to serve another five-year term. On prediction markets, trading volume—the total value of contracts bought and sold—typically tracks roughly with the odds of a given outcome; frontrunners attract far more volume than long shots. $173,000 was wagered on Ahmed winning, compared to more than $41 million traded on his chief of staff, Shimelis Abdisa, becoming the country’s next leader.
Such a high volume of seemingly pointless back-and-forth transactions has raised eyebrows among experts.