By Gabriel Joyce
Prediction markets are peer-to-peer gambling platforms permit people to trade shares linked to a future event’s outcome. Like a conventional gambling platform, users can bet on political events, sporting events, and more.
Nevertheless, instead of merely placing a bet, they purchase shares whose value varies based on the present market sentiment towards the event’s outcome. Further, the markets mostly accept cryptocurrency in exchange for shares.
Definition of Polymarket
This is a prediction market hosted on the Polygon. Users can utilize USD Coin (USDC). Polymarket provides trading on the result of United States politics, sports, the crypto process, global politics, and other aspects of breaking and trending news. Market variations when staking can lead to temporary loss, where staked funds are utilized by the needs of the market the user is contributing to.
Polymarket’s Critical Features
Polymarket styles itself as a decentralized predictions market. Its staff can manage the platform’s various aspects, for instance, market development, disputes, decision-making, and maintenance.
Polymarket lacks full decentralization. However, it is considered a more transparent and fairer means to speculate on future occurrences than the more hazy systems utilized in conventional gambling, where bookmakers set the odds at will.
How Polymarket Functions?
It leverages liquidity pools offered by users to allow trading. Trading activity and real-time valuations by the community play are critical in establishing the prices of event shares.
The centralized limit order book (CLOB) facilitates on-chain and noncustodial trade settlement while in the background. Besides, off-chain matchmaking services are operational, resulting in a hybrid decentralized system.
Online documentation notes that Polymarket does not charge trading fees. However, this seems to be a semantic statement because, in practice, the platform charges a net 2% on earnings.
Benefits of Utilizing Polymarket
Polymarket is considered more transparent compared to other gambling platforms because of its blockchain technology and smart contracts. Users acquire more insights into the calculation of their share prices.
Shares are programmed to pay out when specific conditions are met. The strategy is considered more trustworthy compared to conventional gambling.
There is a more extensive range of events open for trading on Polymarket than on conventional gambling platforms. This evens the playing field for some analysts with various interests and skills.
Possible Risks and Challenges
Users might find that earning money by offering liquidity is difficult. In fact, it may be a higher-risk initiative compared to purchasing shares.
The staked assets’ value may change considerably, resulting in worthless or value-reduced assets. People can also lose money by betting on a market’s incorrect outcome.
The platform can also fail or be susceptible to exploits, hacks, or harmful actions by external forces. There is no robust evidence to deduce Polymarket’s legitimacy. Additionally, no extensively-announced scandals have stained the platform’s reputation.
Getting Started with Polymarket
One must first register an account and deposit some USDC, which can be purchased for crypto or fiat on a majority of major crypto exchanges. An ID or pass is not needed during the creation process.
Next, a person should navigate to Wallet and then Deposit to deposit USDC. After this, one is ready to purchase and sell shares in future events.
The market menu currently comprises Pop Culture, markets in the Middle East, Politics, Science, and Crypto. In some cases, new markets might have more favorable prices since fewer people will have placed their bets, and the results will be slightly undetermined.
Markets with high liquidity are mostly preferred since purchasing shares in a low-liquidity market might incur price slippage. This means a person is losing some funds in the trade.
Trading and Staying Safe on Polymarket
New members are mostly advised to use a systematic, evidence-based strategy to forecast any event’s outcome. Successful trades primarily work with a significant amount of historical data and develop models to predict the possibility of an event instead of just purchasing shares based on intuition.
It is critical to have a risk management strategy and properly developed entry and exit points to target long-term profitability.
