New draft 2024-05-17 18:07:38

Attitudes towards Crypto Assets have become an important topic in the US election this November. Interestingly, users not only see traditional pollsters continue to provide data, but also see Polymarket, a prediction market platform based on Crypto Assets, gaining popularity. As of May 16, nearly $127 million has been bet on the topic of "winners of the 2024 presidential race", of which, $15 million is betting on Trump, who has a 50% chance of winning, $14.55 million is betting on Biden, which has a 42% chance of winning, and none of the other three candidates has a 3% chance of winning.

Just a few days ago, on May 14, Polymarket announced that it had raised $70 million through two funding rounds, the most recent of which was led by Peter Thiel's venture capital firm Founders Fund, and Polymarket's investors also include Ethereum co-founder Vitalik Buterin.

Polymarket was launched in May 2020 in response to the widespread spread of misinformation during the pandemic, and the platform went live in mid-June of that year. Also in time for the 2020 and 2024 U.S. elections, the interweaving of major events has gradually brought this Crypto Assets-based prediction market platform into people's eyes and market hotspots.

NYU dropped out of the Department of Computer Science to start a business and admired Hayek

Polymarket founder Shayne Coplan, 26, once studied computer science at New York University on his LinkedIn page, according to his LinkedIn page. According to public reports, in many longer ways, Coplan has the temperament of a new generation of entrepreneurs. He is an artist who is fascinated by P2P file sharing in an era when people love to share music. Since then, he has been exposed to Bitcoin and has easily understood the Intrinsic Value of a global peer-to-peer asset network.

When Ethereum was announced in 2014, Coplan became an early follower and is believed to be the youngest of the presale participants. Two years later, at the age of 18, Coplan began working on Blockchain projects, and in June 2016, he interned at Chronicled in the San Francisco Bay Area, where his role was to "follow the Chief Product Officer and help decide how the product interacts with the Ethereum Blockchain." ”

Since then, Coplan has also been obsessed with Crypto Assets, launching a series of startups and founding a Decentralized Finance startup called Union.market, which is directly the predecessor of Polymarket. Although he later dropped out of school, he has been thinking for a long time about some of the specific problems faced by the creation of prediction markets and decentralization markets over the past few years. He called Hayek's famous essay "The Use of Knowledge in Society" an early entrepreneurial inspiration, and Coplan also drew on longest years of academic research on prediction markets. Hayek's related idea is that people are more likely to accurately understand the likelihood of uncertainty when economic incentives are at work. People read longer and better sources of information, think deeper, and try to invest their money in actual outcomes that are more likely to happen.

"When COVID broke out, there was so long uncertainty and so long different perspectives, [I think] if there was only a free market on these topics, people could tie money to their opinions," Coplan once told the media.

On June 16, 2020, the beta version of encryption prediction market Polymarket was released, but at the time there was high friction for users, only Metamask login was supported, the Ethereum Money Laundering was too high, and the Liquidity was limited. Three months later, with the release of the second phase of Polymarket, Coplan's approach to building Polymarket became clearer and clearer. The platform was ported to Ethereum's second layer, Matic (now Polygon), to drop gas fees for betting. He also designed the system for users who did not have Ethereum Wallet. All bets are placed in USD-pegged stablecoin USDC and can be purchased by debit or credit card.

Just a few months after its initial launch, Polymarket managed to attract attention with a massive $4 million seed round led by prominent investors Polychain Capital and Naval Ravikant.

The 2020 U.S. election became a catalyst for Polymarket. On November 3 of that year, affected by the U.S. election, Polymarket's volume soared to $1.297 million, from unknown to up-and-coming.

Polymarket's volume and monthly active population since its launch in 2020

With more long positive feedback from the community and market recognition, Polymarket later attracted a Series A funding round, which General Catalyst helped the company raise $25 million in a Series A funding round with participation from Airbnb's Joe Gebbia and Polychain, among others.

Most recently, Polymarket's Series B funding reached $45 million, led by Peter Thiel's Founders Fund and existing investors 1cofirmation and ParaFi, with participation from Ethereum co-founder Vitalik Buterin and Dragonfly and Eventbrite co-founder Kevin Hartz.

Fined $1.4 million by the CFTC, the submarine prediction sparked controversy

Polymarket's development has not been without its challenges. In January 2022, Polymarket was fined $1.4 million by the Commodity Futures Trading Commission for regulatory violations and received cease and desist orders, including for failing to register as a trading intermediary facility. Protocol to the settlement, Polymarket committed to reducing its service in the U.S. and continuing to operate overseas.

However, Polymarket has also stepped up its compliance efforts. In May 2022, Polymarket appointed J. Christopher Giancarlo, a former U.S. Commodity Futures Trading Commissioner, to its Advisory Board.

In addition to this fine, in June 2023, according to Mother Jones, a tweet about the results of the Titan Diver went viral, causing quite a few negative consequences for Polymarket. There's a bet on Polymarket on whether the submersible will be found by a certain date, with users betting more than $300,000 on whether the missing submarine will be found "by June 23." This has sparked online discussion about the ethics of profiting from potentially fatal events.

"Betting on someone else's death belongs to which stage of capitalism," one Twitter user asked, posting a screenshot showing the odds on Polymarket. The sentiment touched a nerve, and the post quickly went viral, garnering more than 9, 000 retweets and more than 150, 000 likes. "It's insane. Imagine making money by whether someone dies or not," replied another user, which was liked more than 1, 000 times. Others began to directly criticize Polymarket for opening up this prediction.

The developing Polymarket responded to ethical concerns, describing the submarine market as "irrelevant to any outcomes for passengers." "We understand that there has been some confusion due to the misunderstanding that our prediction market is related to the fate of passengers. We want to emphasize that this is not true," Polymarket wrote. "Our goal is not to profit from this unfortunate event. We didn't do that either. It's about helping people better understand the world around them. ”

"Break through" in the encryption prediction market track, when will it mature?

prediction market itself has a long history, but in the encryption space, the first Decentralization prediction market was Augur, which was launched on the Ethereum in July 2018. Augur was developed by the Forecast Foundation, which was founded in 2014 by Jack Peterson, Joey Krug, and Jeremy Gardner. The Forecast Foundation is advised by Ron Bernstein, founder of defunct company Intrade, and Vitalik Buterin, founder of Ethereum.

In addition to Augur, Polymarket is not the only prediction market in the market, but also Gnosis, Hedgehog, PlotX, Projection Finance, Sanr.app, Better.fan, Feel.market, and many more. However, Gnosis turned to community management projects after failing to meet expectations. Other encryption prediction market, such as Veil, were simply shut down.

Early prediction market experiments based on Crypto Assets, such as Augur and Gnosis, have also been hit hard by Ethereum's long-standing scaling problem. In addition, they all initially used native tokens, adding friction to the user experience. Polymarket has learned from the mistakes of its predecessors.

After 4 years of development, Polymarke has now successfully "broken through", and will even be cited by media reports and industry research on some key issues as a reference for public opinion.

As of May 14, there are longing hot topics on Polymarket's website: Who will win the 2024 presidential election, for example? Will the May 31 Ethereum ETF pass? Will $GME hit an all-time high by Friday?

According to Token Terminal, Polymarket's highest volume so far this year came on January 10 at $5.73 million. The platform experienced a significant rise in the number of monthly active users in January, rise from 1,600 on January 1 to 4,100 on February 1, with a slowdown in monthly active users after April. As of May 15, the forecast on Polymarket has reached $202.7 million.

Following the recent funding round, Coplan said on LinkedIn, "The most gratifying thing is to see Polymarket being widely adopted as an alternative news source." The trend is clear: thanks to Polymarket, people are more aware of what is happening in the world. Fed up with the rhetoric of experts and Algorithm-generated news. In this age of rampant misinformation, Polymarket offers a new form of information that drives truth through financial incentives, rather than luring to get clicks. People want unbiased information. Polymarket is providing this. ”

As a firm believer in market theory, Coplan believes that forecasting platforms are a true way to better understand reality.

Polymarket has attracted the attention of longest industry insiders. Vitalik used Polymarket to track Sam Altman's board exit. Packy McCormick, an advisor at a16z Crypto, has also said that Polymarket's page is probably the best place on the internet to start the day.

Riding on the social hotspots, with the support of celebrity users, Polymarket has become the biggest encryption prediction market, however, to achieve its original intention, continuous optimization of the product experience and avoiding risks and ethical dilemmas are crucial challenges for future development.