The Rise of the Encryption Prediction Platform: Polymarket Leads a New Direction in the Industry

In recent years, encryption prediction platforms have emerged as a new force in the blockchain industry, rapidly rising and gaining widespread attention. This unique market form allows users to buy and sell shares related to the outcomes of future events, thereby predicting the direction of events. It not only provides investors with new investment channels but also offers valuable data resources for research institutions. Industry reports show that the scale of encryption prediction platforms is experiencing explosive growth, and it is expected to maintain a high-speed growth trend in the coming years.

Among the many encryption prediction platforms, Polymarket stands out with its unique operational mechanism and timely event marketing, becoming a leader in this field. As a decentralized prediction market platform based on blockchain, Polymarket allows users to bet on the future outcomes of various topics using encryption currencies. It utilizes smart contracts to operate on a certain blockchain, significantly reducing transaction fees and speeding up transaction processing. Since its launch, Polymarket has attracted a large number of users and followers with its high transparency and user-friendly interaction experience, making it the largest encryption prediction platform currently.

This article will delve into the operational mechanisms and principles of Polymarket, while analyzing new trends in the encryption prediction market, aiming to provide readers with a comprehensive and in-depth insight into the encryption prediction market.

Polymarket: Understanding the Real World Through Betting

Polymarket is a decentralized prediction market platform based on blockchain technology that has started to emerge in the public eye in recent years. The platform was founded by Shayne Coplan in 2020, and its creation is closely related to Coplan's profound insights during the pandemic. Faced with a plethora of uncertain viewpoints and opinions in the market, both sides often hold firm to their positions, making it difficult to persuade each other. Coupled with the rampant spread of misinformation and the influence of profit-driven algorithms, it has become increasingly challenging for people to see the truth of the matter. Therefore, Coplan founded Polymarket with the aim of allowing people to understand what is happening in the real world more accurately through a completely new approach.

The theoretical basis of Polymarket comes from Hayek's famous paper "The Use of Knowledge in Society." Hayek believed that economic incentives are key to driving people to better understand uncertainty. When economic incentives are in play, people tend to read more and better information sources, think more deeply, and try to place their money on the outcomes that are more likely to occur. Coplan put this theory into practice, simply put, by understanding the real world through betting.

Upon opening the Polymarket website, the homepage prominently displays hot news events of global interest, such as the likelihood of Trump winning the upcoming presidential election, whether a conflict will arise between Musk and Zuckerberg, and the expected number of interest rate cuts by the Federal Reserve this year. Users can select specific markets based on their personal interests and purchase "outcome shares" that represent the potential results of these events. The market prices of these shares reflect the collective perception of the likelihood of the events, providing users with an intuitive reference. Before the market resolution, users enjoy the flexibility to sell their shares at any time, and this process typically does not require high transaction fees. Once the results of the relevant events are officially announced, accurate predictors have the right to redeem their shares at a price of $1 per share, while shares held by inaccurate predictors will lose their value. It is worth noting that all transactions and settlements on the Polymarket platform are automatically executed through smart contracts, a mechanism that ensures the fairness, transparency, and security of transactions.

Polymarket encourages each user to take responsibility for their opinions by introducing a reward and punishment mechanism, making the statistics on the platform better reflect the true state of the market. Compared to previous platforms or social media, Polymarket's predictions are closer to the truth. For example, in the case of room temperature superconductors, while some authoritative media were skeptical, influencers confidently confirmed its realization, even fabricating evidence. In contrast, Polymarket provided a more rational prediction, with a truth-to-falsity ratio of one to nine, demonstrating the rationalization of user opinions under the reward and punishment mechanism.

Currently, social media and spam information are rampant, and the ways people understand events are often limited. These institutions may be unable to remain objective due to vested interests, while social platforms also recommend information based on user interests, leading to the information cocoon effect. Polymarket, as a decentralized prediction market platform, maintains fairness and justice based on blockchain technology, providing an opportunity for change in social public opinion. Its characteristics of being politically incorrect, emotion-free, and objectively true showcase people's real judgments, providing a new perspective for understanding the real world.

Can Polymarket's popularity continue?

The encryption prediction platform is not a new industry. In fact, as early as 2018, platforms established the first blockchain technology-based encryption prediction platform. However, at that time, due to limitations in technology and the fact that blockchain had not yet become widespread, the cumbersome operation steps and unfriendly interaction interface prevented it from truly entering the public eye. It wasn't until the emergence of Polymarket that the encryption prediction platform was able to truly become popular in the blockchain industry and become a mature application.

According to the data, Polymarket is attracting widespread attention and participation globally at an unprecedented speed due to its unique betting prediction model. Especially during the current U.S. election period, Polymarket has not only become a popular platform for the general public to bet on their voting intentions but has also attracted a large number of investors hoping to make profits through accurate predictions of candidates' victories. In the past few months, these active participants have invested hundreds of millions of dollars on Polymarket, directly driving the platform's business scale and visibility to historic new heights.

The latest data further confirms the booming situation of Polymarket. Since April this year, both the trading volume and user numbers of Polymarket have shown explosive growth, especially under the global attention triggered by the assassination attempt on Trump in July. As a representative of prediction markets, Polymarket has been widely reported by global media, further enhancing its visibility and influence. Affected by this event, Polymarket's monthly trading volume in July doubled compared to June, surpassing the $200 million mark, with daily trading volumes stabilizing above $20 million and the number of daily active traders exceeding 6,000.

The popularity of Polymarket not only attracts enthusiastic participation from a large number of users but also makes some idealists in the encryption field view it as an arbitrator revealing the truth. They believe that Polymarket, with its decentralized and transparent characteristics, is expected to become one of the main sources of fair information. However, behind the current popularity, we also have to face the many challenges and potential risks that Polymarket is facing.

Firstly, the lack of continuous capital inflow is one of the key issues that will determine whether Polymarket can sustain its future development. As a zero-sum game, the nature of prediction markets means they cannot attract continuous passive capital inflow like stocks, bonds, or encryption in traditional financial markets. This characteristic poses a challenge for Polymarket in maintaining liquidity over the long term, which in turn affects its ability to achieve sustained profitability and growth.

Secondly, the limitation of market liquidity is also an important issue that Polymarket needs to address. Currently, the top trending topics on Polymarket are almost all related to the U.S. elections, which attract the attention of the vast majority of users. However, for most markets, especially those involving non-instant payments and niche topics, there is still a lack of sufficient appeal. This results in relatively insufficient liquidity in these markets, making it difficult to form an effective market price discovery mechanism, thereby affecting the accuracy and credibility of the prediction results.

In addition, the issue of the influence of market participants is also an aspect that Polymarket needs to pay attention to. In prediction markets, a lack of a sufficient number of professional market makers and other market participants may lead to market prices being manipulated or influenced by a small number of advantaged participants. This not only undermines the ability of prediction markets to provide accurate insights but may also trigger market unfairness and a crisis of trust. For example, some industry insiders often have advance knowledge of insider information, allowing them to place large bets in advance and profit from ordinary users. Therefore, establishing a more fair and just regulatory and auditing mechanism is also crucial for the future development of Polymarket.

Finally, Polymarket relies on hot news to create topics for people to bet on and predict directions, which often touches on some socially sensitive events. For example, not long ago, Polymarket faced criticism for marketing through several tweets containing inappropriate language posted on its official social media account. Although Polymarket later issued an apology regarding the inappropriate wording in the tweets, fired related personnel, and initiated an internal review, it still sparked public skepticism. Some media believe that Polymarket is profiting from some unfortunate events.

The Future Development of Cryptocurrency Prediction Markets from the Perspective of Polymarket

The popularity of Polymarket undoubtedly reveals the limitless potential of the encryption prediction market. Looking back, prediction markets mostly remained in the theoretical stage; even when there were practical attempts, they were often closely linked to gambling and even exploited by criminals as a tool for money laundering. However, the introduction of blockchain technology has brought profound changes to prediction markets, and its public and transparent characteristics make on-chain encryption markets easier for ordinary users to accept and trust.

Although Polymarket is not the pioneer of the encryption prediction platform, it is undoubtedly the most mature and influential platform at present. Its success is reflected not only in the rapid growth of user numbers and the continuous increase in transaction volume, but also in its successful introduction of the encryption prediction market to the general public, injecting new vitality into this field. The rise of Polymarket has shown us new application cases in the blockchain industry, as well as the unique charm and broad prospects of encryption prediction platforms.

For a long time, prediction markets have been regarded as the holy grail in the field of cognitive technology. As early as 2014, the founder of Ethereum showed a keen interest in using prediction markets as a governance mechanism. However, for a long time, prediction markets have faced numerous challenges in practical applications, such as irrational participants, insufficient market liquidity, and a lack of betting motivation among holders of "correct knowledge." These issues have continuously constrained the development of prediction markets.

The emergence of Polymarket has successfully broken this deadlock. It has not only attracted the attention of many industry insiders but also demonstrated strong vitality and broad prospects in practical applications. The founder of Ethereum himself has used Polymarket to track Sam Altman's board exit event, which undoubtedly adds more authority and influence to Polymarket. At the same time, an advisor from an investment institution also highly praised Polymarket, considering its page to be the best place to start a day on the internet. This evaluation not only reflects Polymarket's outstanding performance in user experience but also highlights its unique value in information acquisition and decision support.

There are viewpoints that the encryption industry should reduce zero-sum games and shift towards providing positive-sum experiences. The prediction market is one of the best options to fulfill this mission. It can serve as a betting platform, offering users the possibility of entertainment and profit; at the same time, it can also become a source of information, helping users make more informed decisions. This dual characteristic gives the prediction market a unique position and value in the encryption industry.

However, we must also be soberly aware of the challenges that the encryption prediction market faces in its future development. The uncertainty of regulatory policies, the prevention of compliance risks, and the construction of market ethics are all issues that we need to focus on. Only by ensuring compliance, fairness, and