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The decentralized prediction market Polymarket has been garnering attention recently, but data reveals that the vast majority of its users have struggled to turn a profit.
According to on-chain analytics platform Layerhub, out of 171,113 active crypto wallets on Polymarket, a staggering 149,383 (87.3%) reported no earnings, leaving a mere 12.7%—about 21,730 wallets—with positive returns.
Modest Earnings Among the Profitable
For those wallets that did see profits, the earnings were rather modest. Approximately 2,138 wallets managed to earn over $1,000, but most users experienced gains of less than $100.
Additionally, around 7,400 wallets reported profits in the range of $100 to $1,000. This indicates that significant financial returns are relatively uncommon within the Polymarket ecosystem, prompting questions about its profitability for the average user.
Market Activity and User Behavior
Polymarket allows users to wager on the outcomes of real-world events using cryptocurrency, and it has facilitated approximately 10.8 million betting trades to date.
The platform witnessed a notable increase in activity between October 6 and October 8, with daily trade volumes exceeding 300,000. This surge is largely attributed to global events, including escalating geopolitical tensions and the growing excitement surrounding the upcoming U.S. presidential election.
It’s crucial to highlight that not all wallets represent unique users, as many traders employ multiple wallets to diversify their betting strategies.
The data shows that around 25,000 wallets participated in over 50 trades, while approximately 32,000 engaged in between 20 and 50 trades. Conversely, about 58,000 wallets executed only one to five trades, which suggests that the majority of users are relatively infrequent participants.
Open Interest and Influential Endorsements
As of October 9, Polymarket reported an open interest of $161.1 million, indicating substantial activity on the platform.
Interestingly, the platform gained further visibility when Tesla CEO Elon Musk remarked on its predictive capabilities regarding the 2024 U.S. presidential election results, suggesting that Polymarket might offer insights that could rival traditional polling methods.
Musk’s tweet highlighted the shifting odds in the betting markets, noting that former President Donald Trump held a 3% lead over Vice President Kamala Harris.
This commentary illustrates the growing intrigue surrounding predictive markets as a potentially more accurate measure of public sentiment.
Bloomberg’s Integration and Regulatory Scrutiny
In a recent development, Bloomberg LP announced plans to integrate election odds data from Polymarket into its widely used Terminal service.
This collaboration positions Polymarket as a significant source for tracking real-time election odds, leveraging blockchain technology to ensure transparency in trade execution and payouts.
However, not all attention has been positive. A bipartisan group of five U.S. Senators and three House representatives has called for a ban on betting related to the impending 2024 presidential election.
Prominent senators such as Jeff Merkley, Richard Blumenthal, and Elizabeth Warren are among those concerned that wealthy individuals could manipulate election outcomes by placing large wagers, which could, in turn, undermine public trust in democracy.
Future Directions for Polymarket
Amidst these discussions, Polymarket’s CEO Shayne Coplan has hinted at the possibility of introducing commission fees to enhance the company’s revenue stream.
Coplan emphasized that the platform is committed to expanding its marketplace and improving user experience but acknowledged the need to explore various monetization strategies, including the potential introduction of platform fees, to foster growth.
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