The rise of encryption prediction platforms has attracted attention to new Blockchain applications

In recent years, cryptocurrency prediction platforms have rapidly emerged as a new force in the Blockchain industry and are receiving widespread attention. This unique market form allows users to predict the direction of events by buying and selling shares related to the outcomes of future events, providing investors with new investment channels and offering valuable data resources to research institutions. According to reports, the scale of cryptocurrency prediction platforms is experiencing explosive growth and is expected to maintain a high-speed growth trend in the coming years.

Among the many encryption prediction platforms, Polymarket stands out as a leader in the field due to its unique operating mechanism and its ability to stay on top of current hot events. As a decentralized prediction market platform based on Blockchain, Polymarket allows users to bet on future outcomes of various topics using cryptocurrency. It operates on the Polygon Block through smart contracts, significantly reducing transaction fees and speeding up transaction processing. Since its launch, Polymarket has attracted a large number of users and follow due to its high transparency and friendly interactive experience, becoming one of the largest encryption prediction platforms currently.

This article will delve into the operating mechanisms and principles of Polymarket, while analyzing new trends in the encryption prediction market, providing readers with comprehensive and in-depth insights into the encryption prediction market.

Polymarket: Understanding the Real World Through Betting

Polymarket is a decentralized prediction market platform based on Blockchain technology that has begun to emerge in the public eye in recent years. The platform was founded by Shayne Coplan in 2020, and its inception is closely related to Coplan's profound insights during the pandemic. In the face of a market filled with a multitude of uncertain viewpoints and opinions, as well as the proliferation of misinformation, it has become increasingly difficult for people to see the truth. Therefore, Coplan established Polymarket with the aim of providing a new way for people to better understand what is happening in the real world.

The theoretical basis of Polymarket comes from Hayek's famous paper "The Use of Knowledge in Society." Hayek believed that economic incentives are key to driving people to better understand uncertainty. When economic incentives are in play, people tend to read more and better information sources, think more deeply, and try to place their money on the outcomes that are more likely to occur. Coplan put this theory into practice, simply put, by understanding the real world through betting.

The Polymarket website homepage showcases hot news events that are of global interest, such as the likelihood of Trump winning the upcoming presidential election, whether a conflict will arise between Musk and Zuckerberg, and the expected number of interest rate cuts by the Federal Reserve this year. Users can select specific markets based on personal interests and purchase "outcome shares" that represent the potential results of these events. The market prices of these shares reflect the collective perception of the likelihood of the events, providing users with an intuitive reference. Before the market resolution, users can sell their shares at any time, usually without incurring high trading fees. Once the results of the relevant events are announced, users who predicted accurately can redeem their shares for $1 each, while users who predicted inaccurately will see their shares lose value. All transactions and settlements are executed automatically via smart contracts, ensuring fairness, transparency, and security in trading.

Polymarket encourages each user to be responsible for their opinions by introducing a reward and punishment mechanism, thereby making the statistical data on the platform more reflective of the true market situation. Compared to previous platforms or social media, Polymarket's predictive results are closer to the truth. For example, in the case of room temperature superconductors, despite some authoritative media expressing skepticism, internet celebrities confidently confirmed its realization, even fabricating evidence. In contrast, Polymarket provided a more rational prediction with a truth-to-falsity ratio of one to nine, demonstrating the rationalization of user opinions under the reward and punishment mechanism.

Currently, with the proliferation of social media and spam, people's access to information is often limited. These institutions may not be able to remain objective due to vested interests, while social platforms also recommend information based on user interests, leading to information cocoon effects. Polymarket, as a decentralized prediction market platform, maintains fairness and impartiality based on Blockchain technology, providing an opportunity for change in public opinion. Its characteristics of being politically incorrect, de-emotionalized, and objectively true showcase people's real judgments, offering a new perspective for understanding the real world.

Can the Polymarket boom continue?

The encryption prediction platform is not a new industry. In fact, as early as 2018, some platforms established encryption prediction platforms based on blockchain technology. However, at that time, due to limitations in technology and the lack of popularity of blockchain, cumbersome operation steps and unfriendly interactive interfaces prevented it from truly entering the public eye. It wasn't until the emergence of Polymarket that the encryption prediction platform was able to truly gain popularity in the blockchain industry and become a mature application.

According to the data, Polymarket is attracting widespread attention and participation globally at an unprecedented speed with its unique betting prediction model. Especially during the current U.S. election period, Polymarket has not only become a popular platform for the general public to bet on their voting intentions but has also attracted a large number of investors hoping to earn profits through accurate predictions of candidates' victories. In the past few months, these active participants have invested hundreds of millions of dollars on Polymarket, directly driving the platform's business scale and visibility to new historical heights.

The latest data further confirms the explosive trend of Polymarket. Since April of this year, the trading volume and the number of users on Polymarket have shown explosive growth, especially in July when the global attention was stirred by the incident involving Trump's assassination. As a representative of the prediction market, Polymarket has been widely reported by global media, further enhancing its visibility and influence. Affected by this incident, Polymarket's monthly trading volume in July doubled compared to June, surpassing the $200 million mark, with daily trading volume stabilizing at over $20 million and the number of daily active traders exceeding 6,000.

The popularity of Polymarket has not only attracted enthusiastic participation from a wide range of users but has also led some idealists in the encryption field to see it as an arbiter of truth. They believe that Polymarket, with its decentralized and transparent features, is expected to become one of the main sources of fair information. However, behind the current popularity, we must also face the many challenges and potential risks that Polymarket is facing.

Firstly, the lack of continuous capital inflow is one of the key issues for Polymarket's future sustainability. As a zero-sum game, the nature of prediction markets determines that they cannot attract ongoing passive capital inflow like stocks, bonds, or encryption in traditional financial markets. This characteristic poses a challenge for Polymarket in maintaining liquidity in the long-term operation, which in turn affects its ability to sustain profitability and growth.

Secondly, the limitation of market liquidity is also an important issue that Polymarket needs to address. Currently, the most popular topics on Polymarket are almost all related to the U.S. elections, which attract the attention of the vast majority of users. However, for most markets, especially those involving non-instant payments and niche themes, there is still a lack of sufficient appeal. This results in relatively insufficient liquidity in these markets, making it difficult to form an effective market price discovery mechanism, thereby affecting the accuracy and credibility of the prediction results.

In addition, the issue of the influence of market participants is also an aspect that Polymarket needs to focus on. In prediction markets, the lack of a sufficient number of professional market makers and other market participants may lead to market prices being manipulated or influenced by a few advantaged participants. This not only undermines the prediction market's ability to provide accurate insights but may also trigger market unfairness and a crisis of trust. For example, some industry insiders often have access to insider information in advance, allowing them to place large bets ahead of time and profit from ordinary users. Therefore, establishing a more fair and just regulatory and auditing mechanism is also crucial for the future development of Polymarket.

Finally, Polymarket relies on hot news to create topics for people to bet on and predict directions, which often touches on some socially sensitive events. For example, recently, Polymarket faced criticism for its social media account posting several tweets containing inappropriate language for marketing purposes. Although Polymarket issued an apology regarding the inappropriate wording incident, fired relevant personnel, and initiated an internal review, it still raised public doubts. Some media believe that Polymarket is profiting from some negative events.

Looking at the Future Development of Cryptocurrency Prediction Markets from Polymarket

The popularity of Polymarket undoubtedly reveals the unlimited potential of the encryption prediction market. Looking back, prediction markets mostly remained in the theoretical stage, and even when there were practical attempts, they were often closely tied to gambling and were even exploited by criminals as a tool for money laundering. However, the introduction of Blockchain technology has brought profound changes to prediction markets, and its public and transparent characteristics make the on-chain encryption market easier for ordinary users to accept and trust.

Although Polymarket is not the pioneer of the encryption prediction platform, it is undoubtedly the most mature and influential platform at present. Its success is reflected not only in the rapid growth of user numbers and the continuous increase in trading volume, but also in its successful introduction of the encryption prediction market to the general public, injecting new vitality into this field. The rise of Polymarket has shown us new application cases in the Blockchain industry, as well as the unique charm and broad prospects of encryption prediction platforms.

For a long time, prediction markets have been regarded as the holy grail in the field of cognitive technology. As early as 2014, Ethereum founder Vitalik showed great interest in using prediction markets as a governance mechanism. However, for a long time, prediction markets have faced numerous challenges in practical applications, such as participant irrationality, insufficient market liquidity, and the lack of incentive for holders of "correct knowledge" to place bets. These issues have long constrained the development of prediction markets.

The emergence of Polymarket has successfully broken this deadlock. It not only attracted the attention of a large number of industry insiders but also demonstrated strong vitality and broad prospects in practical applications. Vitalik himself has used Polymarket to track the board exit event of Sam Altman, an action that undoubtedly added more authority and influence to Polymarket. At the same time, some industry insiders have highly praised Polymarket, considering its page to be the best place to start a day on the internet. This evaluation not only reflects Polymarket's outstanding performance in user experience but also highlights its unique value in information acquisition and decision support.

Some viewpoints suggest that the encryption industry should reduce zero-sum games and shift towards providing positive-sum experiences. Prediction markets are one of the best options to fulfill this mission. They can serve as betting platforms, offering users the possibility of entertainment and profit; at the same time, they can also become sources of information, helping users make more informed decisions. This dual nature gives prediction markets a unique position and value in the encryption industry.

However, we must also be clearly aware of the challenges faced by the encryption prediction market in its future development. The uncertainty of regulatory policies, the prevention of compliance risks, and the construction of market ethics are all issues we need to focus on. Only under the premise of ensuring compliance, fairness, and transparency can the encryption prediction market achieve healthy, stable, and sustainable development. This requires joint efforts and continuous exploration within the industry.

![Trump ignites Polymarket, is the future of the encryption prediction market bright?](