Polymarket, a popular decentralized betting platform, saw a sharp decline in its total value locked (TVL) following the resolution of its largest-ever betting market.
The platform, which surged in popularity during the US presidential election, recorded its biggest outflow of funds in its history. After settling the market on the election winner, Polymarket’s open interest fell from $511 million on November 6 to $181 million, representing a drop of nearly 50%.
The decline follows the election betting peak
The conclusion of the US presidential election betting market marked the peak of activity on Polymarket, fueled by high-stakes wagers from crypto whales. At the height of the election period, whale inflows on Trump’s “Yes” token alone reached $70 million, driving the platform’s record-breaking TVL. However, this activity proved unsustainable, as many large players withdrew their funds shortly after the market settled.
Despite offering zero trading fees and hosting a wide array of political betting markets, Polymarket has struggled to retain the same level of engagement. The sudden outflows are being compared to trends seen in PolitiFi tokens, which experienced steep declines in activity after losing their initial popularity. While Polymarket continues to host political bets, trading volumes, and open interest have dropped significantly, with sports now becoming the platform’s leading category for betting.
Airdrop speculation draws attention
As winning bettors moved to withdraw their funds, Polymarket hinted at a possible airdrop to retain user interest. While the announcement created a buzz, it failed to prevent major outflows, particularly from whales. However, the potential for an airdrop has sparked curiosity among smaller users, who speculate they could still qualify based on relatively minor activity.
Polymarket activity returned to pre-October growth levels after big bets were settled. | Source: Dune Analytics
The rumored airdrop follows months of user anticipation, with some wallets engaging in repeated interactions with the platform in hopes of meeting eligibility requirements. The platform’s decision not to release a native token or airdrop during the election period may have helped avoid a speculative crash. Still, no concrete details on eligibility have been confirmed. Current speculation suggests that holding liquidity on the platform may be one of the conditions.
Daily traders drop as markets cool
Polymarket’s daily trader numbers have returned to pre-election levels, reflecting the reduced activity in smaller markets. Most whales have cashed out their earnings, with only a few continuing to make strategic bets. Theo4, a French trader who gained over $47 million, remains active among them. Recently, Theo4 placed a bet against Kamala Harris, who won the popular vote, purchasing the “No” token at $0.28. The token currently trades at $0.99, with the market likely to resolve on November 8, potentially adding to the trader’s substantial gains.
Other major accounts, like Fredi9999, have ceased placing new wagers, highlighting a slowdown in activity across the platform. With its largest market now behind it, Polymarket faces the challenge of maintaining user interest in a less active trading environment.
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