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?
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