According to TechFlow, Polymarket is currently the world's largest prediction market platform, with the 2024 U.S. presidential election having the highest market liquidity, with more than $200 million in bets placed on this event.
Prediction markets are derivatives markets where participants place bets on the outcomes of events, estimating the probability of an event by pooling the collective knowledge and bets of the crowd. Prediction markets have several advantages, including incentivizing accurate predictions, aggregating diverse information, providing real-time updates, reducing bias, and being easily scalable.
Cryptocurrency prediction markets remove the barriers that offshore centralized providers typically place on bets on specific outcomes, allowing users to leverage their own knowledge without any restrictions. Blockchain and decentralized ledgers create transparent global markets that offer advantages over centralized systems.
The market opportunity for prediction markets is greatly underestimated. With the derivatives market exceeding $100 billion, successful cryptocurrency projects leverage existing user bases rather than speculating on untapped markets. Polymarket has raised $70 million in two rounds of funding, with the most recent $45 million Series B round led by Peter Thiel’s Founders Fund, with participation from Vitalik Buterin.