What Is Polymarket, and How Does It Work?
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Polymarket is a decentralized platform that enables users to place bets on the outcome of global events — from science to sports, and culture to crypto.
But it’s politics that has catapulted this website to popularity. In the run-up to the U.S. election, more than $1 billion was wagered on whether Kamala Harris or Donald Trump would win.
How Does Polymarket Work?
Let’s illustrate this with a make-believe scenario — who would come first in a 100m race: Usain Bolt or Noah Lyles?
Once a market has been established, the odds presented to users change in real time, and betters can purchase shares based on what they think will happen.
These shares are priced in cents — and are a reflection of how likely an outcome is. For example, if shares in Usain Bolt cost 80 cents, that means the market thinks there’s an 80% chance that he would win. Betting on Noah Lyles would cost 20 cents.
As the race approaches, these odds may evolve, meaning shares in Lyles will rise in value. Those who backed him early on can sell their shares whenever they like, enabling them to generate a profit even before the outcome is known.
That brings us to what happens when the final result emerges. If Lyles emerges victorious, his shares would automatically be worth $1, while Bolt’s would be worth $0.
In order to bet, users need to open an account and deposit USDC — a stablecoin that’s pegged on a 1:1 basis with the dollar. Polymarket is based on the Polygon blockchain.
Is Polymarket Legit?
Polymarket is a legit platform. It has been running since 2020, with transparent information about the team and founder, Shayne Coplan, a New York-born entrepreneur. Big financial firms like Bloomberg LP are even planning to use election odds data from Polymarket on their Terminal.
While Polymarket is legitimate, it’s still not recommended to bet more than you can afford to lose. Additionally, there are concerns that wealthier bettors could potentially influence market outcomes, making it even riskier.
How Accurate is Polymarket?
That’s a really interesting question. Given how Polymarket users are putting their money where their mouth is, this platform can be an up-to-the-minute insight into sentiment. Founder Shayne Coplan has even argued the website had anticipated Joe Biden would crash out of the U.S. race before the media did — and that Donald Trump would select JD Vance as his running mate.
One of Polymarket’s distinct advantages lies in how it can provide an instantaneous barometer of public opinion, while polls from data companies may only emerge days after a breaking news event has taken place. That helps explain why Bloomberg began to integrate the platform’s data into its Terminal service — adding a much-needed sheen of credibility.
Another significant development came when the company hired Nate Silver as an adviser — a renowned statistician who made his name by making in-depth predictions about past presidential elections.
How to Use Polymarket in the US
Despite American politics emerging as one of the biggest use cases for Polymarket, it’s actually currently unavailable in the US.
All of this follows a case that was brought by the Commodity Futures Trading Commission, which found the company was an unregistered binary options trading platform.
As part of a settlement reached in 2022, Polymarket was ordered to pay a $1.4 million penalty — and told to stop offering operations within the country altogether.
Weirdly though, data from similarweb suggests that 58.5% of this platform’s traffic continues to come from America — followed by 3.9% from Canada and just 3.4% from the UK.
Step-by-Step Guide: How to Bet on Polymarket
- Connect to a VPN.
Polymarket is not available in the U.S., so you’ll need to connect to a VPN and select a region where the platform is accessible. - Sign Up
- You can sign up by connecting a crypto wallet like MetaMask or Phantom, or simply use an email or Google account. No KYC (Know Your Customer) verification is required.
- Deposit USDC by transferring it from your wallet or an exchange using the Polygon Network. There’s also an option to buy USDC with a credit card.
- After sending the funds, activate them by clicking “Cash” and selecting “Activate Funds.”
3. Pick a Market.
Choose a market that interests you from the available categories. For example, select the 2024 U.S. Presidential Election winner market.
4. Buy and Sell Shares.
To buy, select your prediction, enter the amount of USDC to invest, and place your order. You can sell your shares before the market resolves. If the odds improve, you can sell for a profit. If they drop, you can sell early to limit losses. You can also set limit orders for automated buying or selling when prices reach a certain point.
5. Withdraw Funds
To withdraw, go to “Cash,” click “Withdraw,” enter the wallet address and amount, and confirm. Make sure to use the Polygon Network for the transaction.
How Does Polymarket Make Money?
At the moment, 2% of a user’s winnings is charged as a fee — with the funds going toward covering transactions on the Polygon blockchain and rewarding liquidity providers. The website claims that none of this is taken as revenue.
In an interview with Forbes, Coplan explained that this is because Polymarket is focused on growing its user base, but he went on to warn that additional fees may be imposed in the future. He didn’t provide any further information on what this would look like, saying: “We’ll focus on monetization later.”
Is There a Polymarket Coin?
Given Polymarket’s crypto roots, there has long been feverish speculation about whether this prediction market has plans to launch a native token of its own.
Executives haven’t publicly confirmed whether this is in the pipeline, but an article in The Information suggests this has been considered.
In the meantime, the platform’s focus has been on fundraising in a more traditional way — with $70 million generated across two separate rounds.
Who Has Invested in Polymarket?
Polymarket has attracted support from some pretty big names of late — including Ethereum’s co-founder Vitalik Buterin.
He’s pushed back against criticism that this website amounts to gambling, writing on X:
“Prediction markets are interesting because they’re a social epistemic tool: the public gets a view of how important certain events are and what kinds of things are likely to happen, that is much less vulnerable to biased editorial opinion than either social media or news websites.”
Advantages of Using Polymarket
Wide range of event types: Polymarket offers a variety of betting options on topics like politics, sports, and pop culture. You can bet on everything from the outcome of the U.S. elections to who the next James Bond actor will be, so there’s something for everyone.
Access to restricted betting markets: Unlike traditional platforms, Polymarket lets you bet on events that are often restricted elsewhere, like political outcomes or finance-related bets. This gives you access to unique markets.
Speculative and hedging opportunities: Polymarket allows you to bet on real-world risks, such as elections or crypto prices. This can help you hedge against financial risks by betting on possible outcomes.
Downsides and Risks of Using Polymarket
Beyond regulatory concerns, a recurring issue that Polymarket has faced relates to how the outcome of bets are finalized.
One example of this came in May 2024, when more than $13.2 million was staked on whether an Ethereum ETF would be approved by the end of the month.
Betters were told that the market would resolve to “Yes” if the SEC gave the green light — and it did — but critics argued this was incorrect because an S-1 filing hadn’t been signed off.
There are dispute mechanisms in place for disagreements like this, with UMA’s Optimistic Oracle used to reach resolutions.
Will Polymarket Remain Popular?
Polymarket saw unstoppable growth in the run-up to the U.S. election — smashing trading volume records for six consecutive months.
But given that the vast majority of betting has surrounded the presidential race, questions have been raised about whether demand would dry up once the result was known.
There’s little doubt this platform will be battling to remain relevant in 2025 and beyond — all while facing new markets to entice users.
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