People I know are sharing polymarket predictions about the presidential election, and just reading about how the predictions work sounds like the most capitalism-brained nonsense. Like, try reading this without shaking your head:
On Polymarket, you can buy and sell shares representing future event outcomes (i.e. "Will TikTok be banned in the U.S. this year?")
Shares in event outcomes are always priced between $0.00 and $1.00 USDC, and every pair of event outcomes (i.e. each pair of "YES" + "NO" shares) is fully collateralized by $1.00 USDC.
Shares are created when opposing sides come to an agreement on odds, such that the sum of what each side is willing to pay is equal to $1.00.
The shares representing the correct, final outcome are paid out $1.00 USDC each upon market resolution.
Unlike sportsbooks, you are not betting against "the house" – the counterparty to each trade is another Polymarket user. As such:
Shares can be sold before the event outcome is known_ (i.e. to lock in profits or cut losses)
There is no "house" to ban you for winning too much.
Thing is, I'm 3 stupid 5 explaining why this stuff sounds off. Am I just doing a liberalism by speaking without investigating more? Is this as BS as it comes off as to me?
nope. it works best when no one's talking about it (even then its biased towards the demographic, likely cis straight male).
lets say someone posts a tweet, the betting market shows 51% (or cents, whatever) for Harris and 49% for Trump and says "OMG THE MARKET SAYS HARRIS IS GOING TO WIN"
then MAGA clowns go to the site, setup an account and buy up bets saying Trump would win. Now its 51% Trump 49% Harris, even though reality hasn't changed at all.
people buy bets according to their biases, no one has complete information of everything thats going to happen.
If you have made any bet on sporting event, you will know that the pre-game probability means very little other than public hype consensus (which is driven in part, by media and influencers). If prediction market is accurate then noone will ever lose money betting on the favorite.
Polls have issues, but they are at least based on a modicum of ground truth.
i mean, so are betting odds. they're different forms of the same thing.
Latest is, Musk dumped tens of millions into the election market. Anything that can be gamed that much is inherently inaccurate.
I've used them for years. It's just a "put your money where your mouth is" way of polling. Without a cap on how much money a single individual can have in any market (distinct prediction being wagered on), like Polymarket seems to not have, then one person throwing 30M$ into a market and using entirely as a betting book disrupts the purpose of the prediction market as research (which was the basis for their legality in the USA, not sure if that changes but years ago I had to overseas betting sites to bypass the limit on PredictIt, I think it was 1000$ or 1000 shares per market per person).
You show see prediction markets about elections the same way as betting on horse races, there is always a favorite, there is an underdog, a dark horse and many other terms that define how many bets a running horse gets the same way a candidate would get them
they're not BS, but they're not super accurate either. arguably a fairer way to conduct betting than traditional sportbooks, except that there's an inbuilt limit on how much a bet can yield, since the lowest price possible is $0.01/share and a correct prediction yields $1. they're a good way to reach a consensus prediction, but it's the consensus of the kind of people who would try to make money betting on politics. i made a couple hundred off gullible chuds on predictit before brandon said no more and shut it down.
