Polymarket has the potential to be a “source of truth”: Grayscale

Polymarket, the leading prediction market platform, continues to set the trend as the US presidential election approaches on November 5.

So much so that, for the mainstream media, Polymarket It became a source for measuring opinion polls and is on par with traditional surveys.

As CriptoNoticias already reported, the cryptocurrency betting platform recorded a record of activity during the presidential debate which featured the Democratic Party candidate, Kamala Harris, and her Republican Party counterpart, Donald Trump.

According to data from Dune AnalyticsOn September 10, Polymarket reached 72.8% activity, marking an all-time high. This increase exceeds the previous high recorded on July 15, which was 70.7%.

For the research team at Grayscale, a cryptocurrency exchange-traded fund (ETF) issuing company, Polymarket has the potential of being “a source of truth” and argues that it takes advantage of “the transparency and record keeping of the network, the incentives of markets and the collective intelligence of its users.”

In this sense, the report highlights that the growth of the platform occurs in the midst of an increase in cases of fake news and nearly three-quarters of American adults believe that The media has contributed to causing political polarizationThe report adds:

“Nearly half express little or no confidence in the media’s ability to report the news fairly and accurately.”

Grayscale Research Team.

To support their argument, the experts share a graph that shows how Americans’ trust in traditional media has been declining.

In response to this lack of credibility, technology and financial incentives emerge for Grayscale. as a tool to transform the traditional media landscape over the past two decades. “Prediction markets can be part of the solution, leveraging the power of blockchain,” the research team notes.

How does Polymarket work?

It is important to note that Polymarket operates on the Polygon network and takes advantage of the benefits of smart contracts to record and manage each event. The platform uses the consensus of its users to establish probabilities and reflects the dynamics of various events, such as the US elections, the future price of bitcoin (BTC) and the results of sporting events.

On the blockchain (blockchain) all transactions and resolutions are recorded in a transparent and immutable manner. Decentralized oracles such as UMA (Universal Market Access) facilitate dispute resolution through community voting.

It is important to explain that Polymarket offers a user-friendly experience. Once the event is opened, the user chooses the options available.

For example, in the bet “Federal Reserve Interest Rates: September 2024”, traders have four possibilities:

Once it closes and the outcome is determined, those who bet on the winning option receive their payout, while the rest lose their invested capital.

In this regard, Grayscale explains: “Participants have economic incentives to provide accurate predictions, regardless of their personal preferences, as correct predictions result in profits, while incorrect predictions result in losses.”

Polymarket Growth

Grayscale believes that the rapid growth of The platform increased its credibility among mainstream mediato the point that journalists from The Wall Street Journal, CNN and Bloomberg are beginning to use it to conduct detailed analyses that assess public sentiment on current issues. It also highlights:

“Polymarket has the potential to be a ‘source of truth’ by ​​leveraging the transparency and historical record keeping of blockchain transactions, the incentives of markets, and the collective intelligence of its users.”

Grayscale’s research team.

According to data from The Block, The platform recorded its highest monthly volume in Augustexceeding 472 million dollars. Meanwhile, so far in September, it has accumulated 204 million dollars.

During the 2024 election cycle, Polymarket has grown from $73 million in volume in 2023 to $1.37 billion in volume in 2024 year-to-date.

In the following Grayscale chart you can see how the monthly volume (blue line) and traders (pink line) increased.

The firm’s specialists also explain that these “dynamics create market-driven probabilities of a given event occurring, reflecting the collective wisdom of the participants.”

They also point out that the website has experienced substantial growth in trafficwent from 1.4 million visits in June 2024 to 13.8 million in August 2024.

In conclusion, the firm highlights that “Polymarket has become one of the best examples of a use case that is gaining acceptance in the cryptocurrency ecosystem thanks to organic growth” and emphasizes: “It is just a product with a functionality that is resonating with users.”