Polymarket, the prediction market operating on the Polygon network, is garnering international interest. It stands out as one of the most active decentralized applications (dapps) despite lacking its own token, and it is being closely analyzed by pollsters observing the unfolding presidential race in the United States.
In this fiercely competitive election, current Vice President Kamala Harris is facing off against Donald Trump. The former president, who lost to Joe Biden in the 2020 election, is currently vying for a comeback.
Is Polymarket Deceiving Bettors?
According to Polymarket, Trump has increased his lead in recent days. Bettors have assigned a 61% probability for Trump winning, compared to a 39% for Harris.
Interestingly, the market for the Presidential Election Winner 2024 has generated an overall volume exceeding $2 billion. While this amount seems significant, one analyst contends that Polymarket is misleading users by not disclosing the true open interest.
Open interest refers to the total number of active contracts in Polymarket across its various markets. This metric serves as an indicator of liquidity and trader interest.
According to the analyst, the open interest is estimated to be around $200 million, which is up from about $100 million over the last month. Referring to DeFiLlama, the portal reports a total value locked (TVL) of merely $211 million—this encompasses all markets managed by the dapps.
This amount is significantly lower than the $2 billion in volume presented by the Presidential Election Winner 2024 as of October 18. Despite the Polymarket TVL reaching nearly all-time highs of over $211 million, increasing from below $50 million in April, its liquidity does not appear to be as robust as anticipated.
Concerns About Transparency Arise
The analyst who highlighted this inconsistency has criticized Polymarket’s developers for prioritizing volume over open interest, describing this practice as unethical. This raises concerns about a possible lack of transparency that may ultimately hinder users’ ability to accurately manage risks while placing bets on Polymarket.
With Americans heading to the polls on November 4 to select their next president as Joe Biden steps down, the largest market on Polymarket operating on Polygon will conclude, with rewards distributed based on the outcome.
Currently, a bettor named “markitzero” supporting Harris has over 4.5 million shares but is facing losses. Conversely, a Trump supporter named “Fredi9999” holds over 20.2 million shares and is currently in profit.
Feature image from Flickr, chart from TradingView
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