Gate.io Blog Presidential Election Sparks Polymarket, Is Event Trading Becoming a New Trend?

Presidential Election Sparks Polymarket, Is Event Trading Becoming a New Trend?

23 August 00:26

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![](https://gimg2.gateimg.com/image/article/17243437211690791857hotspot.jpeg)
## [TL；DR]: 
The 2024 US presidential election is full of twists and turns, with a strong sense of topic, triggering a large number of players to flock to Polymarket to predict the election results. Currently, the total amount of betting has exceeded $680 million.

Polymarket stands out in the fiercely competitive market mainly because of its efficient operation based on the <a href="/id/price/polygon-matic" target="_blank" class="blog_inner_link">Polygon</a> blockchain, low transaction costs, and compatibility with traditional payment methods.

Polymarket, a project that predicts market and event trading, also faces challenges and limitations, such as legal regulation, market manipulation, and security risks of smart contracts.

## Introduction
Recently, with the hot topic of the US presidential election heating up, many users have begun to bet on the election results, and the prediction market agreement Polymarket has quickly become popular, becoming a new focus of the market.

The following text will focus on Polymarket, revealing the development status and opportunities for participation in event prediction and trading markets.
 
## Presidential Election Betting Heats Up, Polymarket Gains Popularity
As a well-known Polygon on-chain prediction market, Polymerket has quickly gained popularity in the recent US election discussions and is becoming an important testing ground for collective intelligence games.

On the contrary, if the prediction is wrong and Trump fails to win the election, users holding "No" shares will not need to pay additional fees. Still, their previously purchased "Yes" shares will become invalid, meaning they will not receive any return.
 ![](https://gimg2.gateimg.com/image/article/17243438091.jpg)
Source: Polymarket
 
According to platform rules, users choose to purchase "yes" or "no" shares to bet on election results, using price (odds) to reflect the probability judgment of market consensus. In the market guessing of "Presidential Election Winner 2024" in the above chart, the 52.7 percents "Yes" can be understood as the current market estimate of Trump's winning rate being 52.7%. If the user approves the winning rate, they will buy "Yes." If Trump wins, they will earn 47.3 cents per share. On the contrary, if the prediction is wrong and Trump fails to win the election, users holding "No" shares will not need to pay additional fees, but their previously purchased "Yes" shares will become invalid, meaning they will not receive any return.

It is not difficult to find that this mechanism motivates users to make accurate predictions based on personal judgment and market information to pursue potential returns or take risks. It not only reflects the decision-making ability of market participants but also demonstrates how the prediction market dynamically adjusts expectations for future events based on collective intelligence.

The current presidential election race has become much hotter than other games due to news such as Trump's shooting and Biden's withdrawal, and market bettors have repeatedly adjusted their bets as the situation evolves.

According to Dune Analyst's statistics, Trump’s presidential campaign win rate reached as high as 71% after he was shot. Subsequently, with Biden's withdrawal, the current Vice President Harris' win rate as a presidential candidate continued to rise and has now slightly surpassed Trump's.
 ![](https://gimg2.gateimg.com/image/article/17243438352.jpg)
Source: Dune Analyst

Of course, players on Polymarket can not only guess the basic outcome of the election but also the possibility of Biden withdrawing from the race, predict the popular Republican vice presidential candidate J.D. Vance, and the vocabulary that may be involved in Trump's conversation with Musk. These predictions greatly enrich the dimensions of election discussions and showcase the diverse perspectives and creativity of the user base.

The betting events on Polymarket are not limited to presidential elections but also include multiple topics such as cryptocurrency, sports, and popular culture, such as predicting the country with the most Olympic medals, predicting movie box office performance, predicting Premier League results, and predicting the number of Federal Reserve interest rate cuts. As long as it is a topical event, bets can be created for game guessing.
 
## How Does Polymarket Become Popular?
Since its establishment in 2020, Polymarket has rapidly gained ground in predictive markets with its innovative blockchain technology and decentralized model.

At that time, the global pandemic was raging, the world was in panic, information dissemination channels were blocked, and the real situation was difficult to reflect accurately. So, the founder, Shayne Coplan, was inspired by Hayek's "The Application of Knowledge in Society" and believed that economic incentives should be applied to predict markets in order to truly reflect people's views or opinions on a certain event.

He referenced and improved the early prediction market Augur based on <a href="/id/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a>, with the first bet theme being the reopening time of New York City during the pandemic.

Vitalik Buterin also expressed an optimistic view on that year's prediction market: "I predict that in the coming years, the prediction market will become an increasingly important application technology for Ethereum. The 2020 US election is just the beginning, and the prediction market will attract more attention, not only covering elections, but also condition prediction, decision-making, and other ecosystem applications.”

After years of deep cultivation, the platform finally became popular in May this year due to a large number of users betting on the outcome of the US presidential election. The trading volume continued to rise. As shown in the figure below, the trading volume exceeded $100 million in June, and approached $400 million in July. It is expected to exceed $1 billion by the end of the year.
 ![](https://gimg2.gateimg.com/image/article/17243438753.jpg)
Source: Dune Analyst
 
This significant growth not only attracted the attention of campaign experts, political analysts, and public figures such as Trump, but it also won the favor of investors, including Founders Fund and Ethereum co-founder Vitalik Buterin, with cumulative financing reaching $74 million.
 ![](https://gimg2.gateimg.com/image/article/17243438904.jpg)
Source: ROOTDATA
 
Polymarket stands out in the fiercely competitive market mainly because of its efficient operation based on the Polygon blockchain, low transaction costs, and compatibility with traditional payment methods (such as allowing users to use bank or credit cards to purchase USDC for placing bets through MoonPay).

In addition, the platform has successfully attracted many retail investors through extensive marketing strategies, including a partnership with the Reddit channel WallStreetBets.

It is worth noting that the agreement has not yet to explicitly state the issuance of tokens, and we will continue to monitor this.
 
## MEME Craze Fades, Event Trading Will Become a New Trend on the Chain?
The core advantage of event trading protocols represented by Polymarket compared to traditional platforms is its decentralized market mechanism and transparent execution of smart contracts.

For MEMEs that focus on seizing sales opportunities, insider information, and a large amount of ineffective information, user participation in event prediction is more interesting, relatively fair, and pure. This is also an important reason why the prediction market is becoming increasingly active.

Users can place bets on various events on the platform, including political elections, sports events, crypto trends, etc. The betting results are determined by market participants' collective wisdom and consensus, and automatically settled through smart contracts. This "all-or-nothing" betting model motivates users to conduct deeper research and make more accurate predictions, thereby adding more intelligent games and social discussions, greatly enriching the practical adoption of crypto technology.

However, projects like Polymarket that predict market and event trading also face some challenges and limitations.

1.Legal and regulatory risks: Polymarket, a gambling business, is subject to strict regulatory restrictions in many jurisdictions. The CFTC has fined it $1.4 million and required it to gradually cease its services in the United States. At present, there are still a large number of American users participating in betting through this platform, and this jurisdictional limitation is the biggest obstacle to the practical adoption of such platforms.
 ![](https://gimg2.gateimg.com/image/article/17243439305.jpg)
Source: CFTC
 
2.Insufficient liquidity leads to game errors: Despite the surge in trading volume during popular events such as the US election, insufficient liquidity in other niche markets may fail price discovery mechanisms, leading to unnecessary disputes and losses.

3.User trust and fairness: The influence of market participants' funds, public opinion, and other factors may lead to price manipulation, and some events may result in differences in user opinions due to differences in evaluation criteria. Therefore, establishing a fair market environment is a key issue that Polymarket needs to address.

4.Risk of peer competition: With the booming prediction market, <a href="/id/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> Ecosystem Drift Protocol prediction market B.E.T, Sui Ecosystem Prediction Protocol Karma Protocol, and others have been launched one after another, intensifying industry competition.

In short, Polymarket has become an important indicator of public opinion in presidential elections, and the platform is expected to use this opportunity to expand its guessing topics and open up market space in this field. Polymarket's explosion not only reflects the strong interest of the current younger generation in political events but also demonstrates that the predictive market, as an emerging way of information aggregation and viewpoint exchange, is gradually changing the traditional political discussions and the reality of the <a href="/id/price" target="_blank" class="blog_inner_link">crypto market</a>.

<div class="blog-details-info">
<div>Author:**Carl Y.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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TL；DR

Introduction

Presidential Election Betting Heats Up, Polymarket Gains Popularity

How Does Polymarket Become Popular?

MEME Craze Fades, Event Trading Will Become a New Trend on the Chain?

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