Have a hunch about the outcome of a real-world event? Polymarket lets you turn insights into actual predictions — from who’ll win the next election to where crypto prices are headed or even pop culture. But what is Polymarket? By the end of this guide, you’ll understand exactly how the decentralized platform works, what makes it popular, and how it differs from other prediction markets in 2024.
KEY TAKEAWAYS
➤ Polymarket is a decentralized platform where users can make predictions on real-world events, from politics to crypto trends. Odds are set by user demand.
➤ Built on Polygon and using USDC, Polymarket keeps fees low and offers transparent, user-driven predictions.
➤ While U.S. residents can only view markets, users elsewhere can engage safely by securing wallets and tracking market trends.
What is Polymarket?
Polymarket is a prediction market ecosystem that allows users to forecast the outcomes of real-world events by buying and selling shares.
Built on the Polygon network, Polymarket lets users participate in a range of events, from political predictions and crypto price trends to pop culture and global happenings.
The platform operates without a central “house” or set odds — prices are based purely on user sentiment and supply and demand within each market.
Polymarket is not just limited to guessing on straightforward price predictions; it offers markets across various fields, allowing users to explore their insights on countless topics. So, if you lack trading chops but are still keen to form evidence-based predictions, the platform may be an ideal facilitator.
How does Polymarket work?
Polymarket functions as a marketplace where users can trade shares based on the likelihood of specific outcomes. Here’s a breakdown of how it works:
- User-driven odds: Unlike traditional betting platforms, Polymarket doesn’t set odds. Instead, the price of shares — ranging from $0.01 to $1.00 — reflects the market’s collective sentiment. For example, if “Yes” shares on a political outcome are trading at $0.70, it suggests a 70% likelihood of that event occurring based on user consensus.
- Event categories: Polymarket offers a wide variety of markets, including political predictions, crypto predictions, sports, and even entertainment events. Users can participate across these Polymarket prediction categories based on their interests.
- Market resolution: After the event concludes, Polymarket uses decentralized oracles to confirm the outcome. Correct predictions are paid out at $1.00 per share, while incorrect ones lose their value.
- Decentralized infrastructure: Built on Polygon, the platform uses USDC to facilitate secure and low-fee transactions, making it an accessible choice for those looking to explore blockchain technology without the high fees typical of other platforms.
What can you predict on Polymarket?
On Polymarket, users can make predictions on a diverse range of verticals, making it a unique hub for all types of forecasts. Here are the main categories:
- Politics: The platform hosts various political predictions. These include high-stakes events like U.S. elections and major policy decisions. Election odds and policy outcomes are popular categories that often draw large trading volumes.
- Crypto markets: Unlike typical crypto prediction markets that focus only on price predictions, Polymarket lets users predict specific price milestones, such as Bitcoin reaching $30,000 by a set date. This is ideal for those who want exposure to crypto forecasts without needing to constantly monitor price fluctuations.
Did you know? Polymarket’s user-driven model has made it one of the most trusted platforms for predictions, with user insights often considered more reliable than traditional polls due to the real-money stakes involved. On the flip side, the model leaves the platform open to market manipulation. Should a small number of accounts make large bets, this could skew odds in a way that does not reflect reality.
- Sports events: Users can participate in sports predictions, covering outcomes from major leagues, championships, and even player-specific events.
- Pop culture and global events: Polymarket also offers predictions on entertainment and current events, from award shows to major economic announcements.
With Polymarket’s diverse categories, users can apply their insights to nearly any field of interest. This flexibility sets it apart from other prediction platforms, which are often limited to one or two specific types of events.
Setting up an account
Before you start making predictions on Polymarket, you’ll need to set up your account and fund it. You’ll need USDC and a compatible wallet like MetaMask.
First, set up your MetaMask wallet if you haven’t already done so. This is a key step for logging in to Polymarket. Once you are in, you’ll need to fund your wallet with USDC.
You would also need a small amount of MATIC to cover network fees. USDC will work for predictions, while MATIC supports low transaction fees on Polygon.
For a more detailed step-by-step guide, check our tutorial on how to use Polymarket to bet on Trump vs. Kamala.
How does this prediction market make money?
Polymarket doesn’t operate like a traditional betting platform, where the “house” takes a cut on every transaction. Instead, it has a few revenue sources tied to platform activity:
- Transaction fees: This prediction ecosystem charges a small fee on winning trades, which goes toward operational costs and rewards for liquidity providers. This setup keeps fees relatively low compared to centralized platforms.
- Liquidity provider rewards: Polymarket incentivizes liquidity by offering rewards to users who help maintain active markets. Liquidity providers play a key role in keeping markets functional and ensuring users can buy and sell shares as needed.
Fact check: Since its launch, Polymarket has paid out over $3 million in USDC rewards to liquidity providers, helping maintain the platform’s accessibility and smooth trading experience.
Polymarket pros and cons
Polymarket offers unique advantages as a prediction platform, but it also has some limitations to consider. Here’s a look at the pros and cons.
| Pros | Cons |
| Decentralized and transparent: Relies on decentralized oracles for outcome resolution, offering transparency and a user-driven experience. | Restricted U.S. access: Due to regulations, U.S. residents can only view markets without participating. |
| Low fees: Built on the Polygon network, which allows for low transaction costs and accessible trading. | Crypto-only: Requires a crypto wallet and USDC, which may deter non-crypto native users. |
| Diverse prediction categories: Covers a range of topics from politics to crypto markets and pop culture, providing more variety. | Limited liquidity in niche markets: While popular events are highly active, less popular markets may have low liquidity, affecting trading ease. |
| No “House” influence: Odds are set purely by supply and demand, with no centralized control over prices. | Open to whale manipulation: Large bets made by a small number of accounts can impact odds. |
Tips for using Polymarket
- Explore diverse markets: From political predictions and crypto trends to sports and entertainment, Polymarket covers a wide range of events. Start with familiar topics to build confidence, then branch into new areas as you gain experience.
- Manage risk and track trends: Use Polymarket’s flexibility to buy and sell shares as the market shifts, reducing losses or securing gains early. Watching trends in real time lets you react quickly to changes, a key feature of prediction markets.
- Keep in mind the platform’s limitations: As Polymarket has no “house influence,” platform whales can significantly impact how odds are calculated.
The above Tweet outlines a case of one trader making huge bets on the platform across four accounts. Below, user sentiment around the platform being a “scam” or “fixed” is demonstrated.
Is Polymarket safe to use?
Yes, Polymarket is considered safe, so long as users secure their crypto wallets and follow market updates closely. The platform’s use of oracles and its user-driven model provides transparency, as outcomes are verified through a decentralized network. However, the platform’s model means that odds are seemingly open to a level of market manipulation. The actions of a few accounts are potentially able to skew perceptions of the plausibility of a certain outcome.
By understanding what Polymarket is, its limitations and uses, and practicing risk management, users can engage confidently with this trending prediction platform.
Disclaimer: This article is for informational purposes only and should not be considered investment advice. Using prediction platforms to anticipate the outcome of any real world event carries risk. Never spend more than you can comfortably afford to lose.
Frequently asked questions
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