Prediction markets have always captivated the attention of many players, whether for political elections or sporting events. But today, with the rise of blockchain and decentralized finance (DeFi) , these platforms are taking on a whole new dimension. It is in this context that Polymarket, a decentralized prediction market, stands out as an innovative alternative.
Table of contents
What is a prediction market?
A prediction market allows its users to bet on the outcome of a future event. Users wager on the results of real-world events, such as a presidential election, an economic policy decision, or a sporting event. Unlike traditional betting, prediction markets utilize the " wisdom of crowds ," a phenomenon whereby collective decisions can sometimes be more accurate than those of individual experts.
Introducing Polymarket
Polymarket is a prediction market platform launched in 2020. Based on blockchain technology , it allows its users to speculate on a variety of topics ranging from election results to global economic trends. Unlike other centralized platforms, Polymarket is entirely decentralized, thus ensuring complete transparency and greater accessibility for its users.
How does Polymarket work?
On Polymarket, users wager cryptocurrencies, primarily USDC USDC a stablecoin pegged to the US dollar), to bet on predictions. The process is simple: you select a question, such as "Will Bitcoin surpass $100,000 by the end of the year?", and you bet on the answer you deem most likely. When the event occurs, those who bet correctly receive their winnings proportional to their initial stake.
Polymarket and decentralization
What makes Polymarket unique is its integration with decentralized finance ( DeFi ) and its decentralized nature. Unlike traditional centralized prediction markets, such as sports betting or casinos, the platform does not charge a fixed commission. In other words, Polymarket operates as a zero-expectation game. This means that every bet contributes directly to participants' winnings, without any intermediaries taking a cut. This lack of commission allows users to bet in a transparent and fair environment, a major advantage over centralized platforms that often take a commission, thus reducing bettors' potential winnings.
Types of predictions
On Polymarket, the topics of predictions vary enormously. Users can bet on major political events, such as elections or legislative decisions. They can also focus on economic events, such as stock market trends or cryptocurrencies, or even cultural or sporting events.
Polymarket versus other prediction markets
In terms of competition, Polymarket stands out from other platforms like Augur. Its main advantage lies in its ease of use and intuitive user interface. Unlike some competing platforms, Polymarket doesn't require in-depth blockchain knowledge, making it accessible to a wider audience. An emerging competitor is making its mark on the Solana , known for its trading and a prediction market called BET: Drift .
Why is Polymarket unique?
The platform stands out for its simple interface and its focus on decentralized finance. Unlike some platforms that require a native token, Polymarket works directly with stablecoinlikeUSDC, making the user experience smoother. Furthermore, decentralization allows for zero-expectation gambling, unlike centralized betting where a portion of the stakes is taken as a commission.
Here, all wagered funds are redistributed among the winners, maximizing potential winnings for each user. This transparency and fairness are compelling arguments for those who wish to bet without incurring the hidden fees of traditional platforms.
Cryptocurrencies on Polymarket
Polymarket usesUSDC as its primary currency. This stablecoin, pegged to the US dollar, allows users to minimize the risks associated with cryptocurrency volatility. It's important to note that Polymarket does not allow direct token trading but focuses solely on predictions, unlike Drift.
The risks
Like any prediction market, Polymarket carries risks. Markets are volatile, and users can lose their stakes if their predictions are incorrect. Furthermore, the decentralized nature of the platform means there is no recourse in case of a dispute.
Polymarket and regulation
Prediction markets are often a slippery slope in terms of regulation. Polymarket, while innovative, is not immune to this reality. The platform has already attracted the attention of regulators, particularly in the United States, where gambling and betting are strictly regulated. However, its decentralized nature makes strict regulation difficult.
How do I use it?
1. Connecting with a crypto wallet :
- When you use a wallet to log in, you are directly staking stablecoins like USDC USDC USD Coin), because Polymarket uses this currency for all transactions.
- You need to transfer USDC USDC the Polygon ( Ethereum Layer 2 Ethereum , you can convert other cryptocurrencies to USDC on an exchange and then send them to Polygon .
- The advantage of this method is that you retain control of your funds through your personal wallet.
2. Log in with an email address :
- If you choose to log in with an email address, Polymarket creates a "custodial" wallet for you (managed by the platform). Your funds are then held by Polymarket.
- fiat payments (such as USD) through integrated payment services (such as a bank card or other options offered by third parties).
- The funds are automatically converted to USDC for use on the platform.
Summary: What form do the bets take?
- USDC (USD Coin) is the reference currency used on Polymarket, regardless of the connection method.
- You can fund your account withUSDC (in crypto) or with fiat funds (converted to USDC).
Important points to note:
- If you are using a crypto wallet, make sure you have enough MATIC ( Polygon's native crypto) to cover transaction fees.
- If you choose to connect via email, your funds are held by Polymarket, which may limit your direct control compared to a non-custodial wallet.
The advantages of using Polymarket
Polymarket offers several advantages. First, thanks to its decentralized structure, it operates as a zero-expectation game. All funds wagered by participants are redistributed among the winners without any platform taking a significant cut. Unlike centralized sports betting or casinos, the platform does not charge a commission, thus maximizing user winnings. Furthermore, its transparency is key: results are published on the blockchain, guaranteeing the integrity of the process. Finally, the diverse range of topics available allows everyone to find something that interests them.
The limitations of Polymarket
However, the platform also has its limitations. It remains relatively new and has not yet achieved widespread adoption. Furthermore, some markets lack liquidity, which can make trading less dynamic.
The future of Polymarket
Polymarket's future looks promising. With the growing interest in prediction markets and decentralization, Polymarket could become a leader in its field. The platform continues to innovate, regularly adding new features and covering new events.
Conclusion
Polymarket is a decentralized prediction market that leverages blockchain technology to offer a transparent and fair platform. By adopting a zero-expectation gaming model, it distinguishes itself from traditional betting platforms by maximizing user winnings. If you're looking for a way to invest in future events while benefiting from decentralization, Polymarket could be an attractive option, with all the advantages and risks that entails.
FAQ
What is Polymarket? Polymarket is a decentralized prediction market platform where users bet on the outcome of future events.
How does Polymarket work? Users wager cryptocurrencies, primarily USDC USDC to bet on the outcome of real-world events. All funds are redistributed among the winners without any commission being taken by the platform.
What types of events are covered? Polymarket covers a wide range of events, including political, economic, and cultural events.
What are the risks associated with Polymarket? The main risks are the volatility of the prediction markets and the possibility of losing your investment if the prediction is incorrect.
Does Polymarket take a commission on winnings? No, Polymarket is a zero-expected-earnings market. This means that winnings are redistributed among the winners without the platform taking any commission.
Yoann
Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.
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