The first presidential election debate of 2020 has gone to pass, and all the world has to say about it, is that it was a spectacular dumpster fire. No clear winner could be discerned, but prediction platforms powered by crypto are running double-time amid the new predictions.
Anti-Trump Sentiment Grows
The FTX derivatives exchange saw its election futures boom in volume, with the CEO of the platform clocking in over $4 million in open interest from people trying to pick the winner. The brash debate performance of Donald Trump, the Republican candidate and current President of the US, did seem to leave the majority on FTX unimpressed. The futures contracts for Trump’s re-election saw a 10% crash in price.
It should be noted, however, that FTX has its volumes amplified by way of leverage. There are, however, predictive platforms in the crypto space that don’t offer leverage. There, six-figure volumes were recorded in a far more modest tone. Polymarket, one such platform, has recorded over $100,000 in volume in its market, aptly titles “Will Trump win the 2020 U.S. presidential election?”
On the 30th of September, 2020, it seemed that the sentiment had shifted similar to that of FTX after the debate. Even so, only 55% of people believe Trump won’t win the election. It should be noted, however, that no one thought he’d win, to begin with.
— SBF (@SBF_Alameda) September 30, 2020
New Markets From Political Speculation
Shayne Coplan spoke to the press regarding this, and explained that the platform itself was designed to find answers to issues that they really want to know about, instead of just speculating on emotionless assets.
Alongside this, he highlighted the immense informational and social value of markets, citing its ability to aggregate information, then synthesize it into an accurate forecast of what might happen. This, Coplan stated, was the essence of price discovery: Aggregating all the knowledge and opinions of people and converting it into one metric.
Dodging ETH’s massive gas fees
Polymarket currently stands as being built on Ethereum (ETH). However, the platform is seeking out Matic as a potential scaling solution in the time leading up to the ETH 2.0 market. Polymarket is a non-custodial platform, and transactions done on it do not carry fees.
The platform itself makes use of an Automatic Market Maker (AMM) in order to serve its price discovery needs. All the market participants on Polymarket subsequently trade against the liquidity pool of this AMM. As for ideas for markets, these can be submitted to Polymarket by its users, which then get curated by the executives of the firm. This, in turn, is to make sure that there are unambiguous terms and conditions in regards to that specific market.