What is Polymarket? Your Ultimate Guide to Navigating the Prediction Market in 2024

2024-11-12, 08:04

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## [TL; DR] 
On Polymarket users can speculate on the outcomes of political events and prices movements of cryptocurrencies.

Polymarket exists on the <a  rel="nofollow noopener noreferrer"  href="/price/polygon-matic" target="_blank" class="blog_inner_link">Polygon</a> network and uses USDC for paying transaction fees.

Prices of event outcome shares depend on their demand and supply.

## Introduction 
The blockchain technology has resulted in true decentralized markets for various products and services. These decentralized marketplaces are popular among traders since they do not involve intermediaries. Therefore,  there is high efficiency and  relatively lower costs compared to traditional markets. This analysis covers Polymarket,a decentralized prediction market.

## Overview of Polymarket
As hinted above, Polymarket is a [prediction marketplace for real-world events](https://www.gate.io/learn/articles/unveiling-polymarket-the-role-growth-and-challenges-of-the-crypto-prediction-market/4421 "prediction marketplace for real-world events") and related shares. Polymarket, built [on the Polygon blockchain](https://www.gate.io/blog/122/who-is-behind-the-rise-of-the-polygon-network-blockchain-consensus-mechanism-explained-in-one-article "on the Polygon blockchain") and founded by Shayne Coplan in 2020, operates on the <a  rel="nofollow noopener noreferrer"  href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> network. Since it is based on the blockchain and uses smart contracts it offers a secure and transparent means for people to speculate on various events such as outcomes of sporting events or political elections. People may also bet on the price direction of different investment assets such as <a  rel="nofollow noopener noreferrer"  href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">bitcoin</a> and ETH.

During the past several years the participants bet on different events such as the 2020 U.S. Presidential Election and the Paris Olympics 2024. That political prediction enables participants to speculate on possible outcomes of key political events. For instance, before and during the past United States presidential election people bet on its possible outcome. Similarly, during this year’s Paris Olympics many people bet on the country that would win the largest number of medals. These events attracted many people from across the globe.

Read also how [Trump boosted Polymarket](https://www.gate.io/learn/articles/trump-boosts-polymarket-whats-the-profit-potential-in-crypto-prediction-markets/3763 "Trump boosted Polymarket")

It is important to note that people may also speculate on the price direction of some investment instruments such as ETH or <a  rel="nofollow noopener noreferrer"  href="/price/xrp-xrp" target="_blank" class="blog_inner_link">XRP</a>. This year many speculators made their bets on the highest price <a  rel="nofollow noopener noreferrer"  href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">bitcoin</a> may attain in 2024. That poll has a very high volume of over $4 billion. For example, over $2.1 billion volume indicated that the <a  rel="nofollow noopener noreferrer"  href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">bitcoin price</a> would be above $70,000 by the end of October.

Over the years the trading volume on the Polymarket prediction market grew significantly. As an example, the Polymarket trading volume reached $2 billion  in October. However, in June the trading volume on the decentralized platform was around  $110 million. Although in June the platform recorded 30,000 users; it had 191,000 active traders in October.

Read also: [Bitcoin Price Prediction & Forecast for 2024, 2025, 2030](https://www.gate.io/price-prediction/bitcoin-btc "Bitcoin Price Prediction & Forecast for 2024, 2025, 2030")

## Polymarket’s Decentralized Nature Enhances Transparency and Security
As a decentralized <a  rel="nofollow noopener noreferrer"  href="/web3" target="_blank" class="blog_inner_link">Web3</a> application Polymarket allows the users to connect their non-custodial <a  rel="nofollow noopener noreferrer"  href="/web3" target="_blank" class="blog_inner_link">web3</a> digital wallets to the platform which increases the security of their assets. Many users connect their Meta Mask wallets to the prediction market. Also, it is very convenient for people to use Polymarket since it does not require any KYC procedures.

Since it bypasses intermediaries Polymarket offers private and convenient betting experience which is in line with the decentralized nature of the blockchain. Since it is [based on the Polygon network](https://www.gate.io/learn/articles/what-is-polygon/73 "based on the Polygon network") it has very low transaction fees. Similarly, it is scalable which enables many people to participate with little or no hassles. Since it is a decentralized platform, oracles are responsible for determining  the outcome resolution in a transparent manner. Each correct prediction gets a $1 per share while the incorrect ones lose their values.

## The Role of Polygon Network and USDC in the Prediction Market
As already hinted above, the <a  rel="nofollow noopener noreferrer"  href="/price/polygon-matic" target="_blank" class="blog_inner_link">Polygon</a> network is very suitable for the prediction market. First the [layer-2 network](https://www.gate.io/learn/articles/what-are-bitcoin-layer-2-networks/4419 "layer-2 network") is scalable and cost-effective which attracts many people to the platform. Basically, it charges a small fee to the winning trades. The fee covers for the operational costs of the network as well as rewarding liquidity providers. Second, the users pay for the platform in USDC which makes it cost-effective. As a result, it is very convenient for people to use the platform. It is essential to realize that Polymarket does not charge any fees for buying and selling of the outcome shares. However, there is a small amount for depositing and withdrawing the digital assets.

## Types of Predictions on Polymarket
There is very little, if any, restrictions on the real-world events prediction allowable on Polymarket. People can speculate on different event outcomes. Let’s briefly look at some of these categories.

Political Predictions: Usually, there are many political events that enable the users to speculate on their outcomes.They can bet on the outcomes of elections in different countries. They can also bet on major policy decisions such as interest rates cut. Since many people are interested in betting on the outcomes of major elections and policy decisions this category draws many users.

Crypto Markets: The nature of crypto predictions on Polymarket is different from the traditional means of  trading digital assets. Usually, the speculators set price targets for certain crypto assets at given periods. For instance, the possibility of <a  rel="nofollow noopener noreferrer"  href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">bitcoin</a> to reach $120,000 by 31 December 2024. Such a speculative method is suitable for newbies in the crypto sector or those who do not want to spend much of their time assessing price movements.

Sports events: One of the main areas of betting is on sports events.  For example, during a world cup soccer tournament the users can bet on the country that may win. They can also speculate on milestones such as the list of countries that may reach the quarter final stage. Usually, betting in the category focuses on major leagues such as La Liga or Bunde Sliga.
 
Pop Culture And Global Events: With Polymarket speculators may bet on the outcome of some cultural events such as the winner of Miss World.

## How to Make Money on Polymarket 
To start, an individual buys a share on the possibility of an outcome or event to occur. For instance, if you think that a certain candidate will win an election you purchase a "Yes” share. On the other hand, if you think he/she cannot win the election you buy a “No” share. If the event occurs as you had predicted your share’s value will be $1. if the event fails to happen as you have predicted your share becomes valueless. Each outcome of an event is collateralized by $1. It is important to note that Polymarket does not set the value of the shares. The forces of demand and supply determine the value of the shares. Also, every user can sell his/her share at any time before the event concludes.

## Making Money from Prediction Markets: How to Use Polymarket? 
The first step for a person who wants to use Polymarket is to register on its website. Once you do so you connect your non-custodial crypto wallet to the platform. After that you deposit USDC into your wallet. From there, you pick a market you want to participate in. Note that you can buy USD C on various exchanges that include Gate.io. In fact, Gate.io is one of the most secure cryptocurrency exchanges you can use. Here are the steps to purchase USDC on Gate.io.

Step 1: Create an account on Gate.io. If you already have an account you login.

Step 2: Complete your KYC and security verification process.

Step 3: Select your preferred payment method such as credit card or wire transfer.

Once you do that you will follow the given instructions, step by step.

Going back to Polymarket; once you have funded your wallet you buy the outcome shares of your choice. The price of the share depends on the probability of the outcome of the event. As said above, Polymarket is safe to use since the cryptocurrency remains in the users’ wallets.

## Conclusion
Prediction markets have become another means of making money in a very simple manner. The participants can easily indicate the possibility of an outcome through buying the “Yes” or “No” shares. However, for someone to benefit the most from this market he/she should have much knowledge on the event he/she wants to bet on. At this point Polymarket is one of the leading decentralized prediction markets.

<div class="blog-details-info">
<div>Author: Mashell C., Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions. All investments carry inherent risks; prudent decision-making is essential.
<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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