- US elections triggered a sharp growth in the prediction markets.
- Platforms like Augur and Polymarket are doing a good job in predicting the outcome of the events.
The US presidential election has become a significant boost for the decentralized prediction markets, which registered a sharp increase in trading volumes ahead of the life-changing event. People are agitated and ready to stake their money on who will rule the most influential global superpower for the next four years.
At the time of writing, the trading volume on the election-related bet on the popular prediction market platform Polymarket exceeded $6.4 million, which is over 90% of the platform’s total trading volume.
“Trump wins” bet on Polymarket (Source: Polymarket)
Notably, other popular prediction market platforms also have registered a sharp increase in user activity. Thus, Augur registered five straight record volume days for Catnip.exchange, a simple end-user interface for Augur’s US election market. The trading volume jumped from $200,000 on October 25 to over $1.2 million on the election day.
Meanwhile, open interest on Augur 2.0 surpassed $4 million and increased by over 20,000% since August.
Prediction markets more accurate than polls?
Prediction market platforms describe these markets as bets on whether Donald Trump will win the 2020 US presidential election. While it is not considered a popular vote, bets’ distribution helps gauge who is likely to become the President. Moreover, according to the co-founder of Ethereum, Vitalik Buterin, prediction markets are doing a better job than polls and traditional models.
He believes that unlike traditional models, the prediction markets correctly incorporate various factors that may affect the outcome, including the possibility of heightened election meddling and voter suppression. Also, the prediction markets are outside the reach of the politician and other interested parties who might want to distort the picture.
Currently, the exit polls and preliminary results imply that Biden is leading with a narrow margin. The situation looks similar to what happened in 2016, and the US markets are bracing for a hot week. Both candidates have already declared the win, though the final result is yet to come.
Meanwhile, the prediction markets have a much clearer picture. According to the Augur market, over 66% of the participants bet on Trump’s win, and only 33% believe Biden will have the upper hand.
The $TRUMP $BIDEN prediction market on FTX shows a similar picture where Trump Wins Token is still in a green zone on a day-to-day basis.
Trump Wins and Trump Loses tokens (Source: CoinGeko)
The jury is still out on the subject, but one winner is already apparent. According to the co-founder of the anonymous crypto betting platform YieldWars, “the US presidential elections breathed life into prediction markets.” Now, it depends on the platforms if they manage to keep people enthusiastic about betting once the event is over.
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