Bitrabo Editorial
Polymarket, a prediction platform built on Polygon, is receiving notable global interest. It stands out as one of the leading decentralized applications (dApps) that operates without its own token and is being closely watched by poll experts amid the current U.S. presidential campaign.
The race is heating up between current Vice President Kamala Harris and former President Donald Trump, who aims to reclaim the presidency after his 2020 loss to Joe Biden.
Are Predictions from Polymarket Reliable?
According to data from Polymarket, Trump has recently widened his lead. Current estimates place Trump’s chances of winning at 61%, while Harris is at 39%.
Moreover, the market for the Presidential Election Winner 2024 has reached a significant volume of over $2 billion. However, one analyst argues that Polymarket may be misleading users by downplaying the true open interest in its markets.
Open interest refers to the total number of active contracts across various markets on Polymarket, serving as an indicator of market liquidity and participant interest.
The analyst estimates that the open interest is approximately $200 million, a notable increase from $100 million over the last month. According to DeFiLlama, the platform’s total value locked (TVL) is about $211 million, encompassing all active markets managed by the dApp.
This TVL figure pales in comparison to the $2 billion volume reported for the Presidential Election Winner 2024 as of October 18. The current TVL is near its historical highs, increasing from under $50 million in April. Despite this growth, the platform’s liquidity appears less robust than one might expect.
Concerns Over Transparency
The analyst criticizing the platform is calling out Polymarket for emphasizing volume figures over open interest, labeling this practice as unethical. This raises important questions about transparency, which could potentially hinder users’ ability to accurately assess risks while betting on the platform.
With Americans scheduled to vote for their next president on November 4, after Joe Biden steps down, the largest market on Polymarket will conclude, and rewards will be allocated based on the election outcome.
Currently, one user backing Harris, known as “markitzero,” holds over 4.5 million shares but is facing losses. Conversely, a Trump supporter identified as “Fredi9999” manages over 20.2 market shares and is currently profiting.