What Is Polymarket? Crypto’s Latest Killer App Explained

• Polymarket has been hailed as crypto’s latest killer app.
• The prediction market possesses key features that enable it to stand out among its peers.
• Several industry leaders maintain that the application still has room for growth.

Despite the crypto industry’s rapid growth in recent years, an application’s reach rarely crosses beyond crypto-native users to drive adoption and growth. So far, this elite group of applications has included stablecoins , Axie Infinity, and OpenSea .

However, in 2024, Polymarket, a Polygon -based prediction market that has grown in popularity during the current U.S. election cycle, looks set to join this elite class.

This article delves into what Polymarket is and why it is considered crypto’s latest killer app.

What Is Polymarket?

Polymarket is a prediction market platform built on the popular Ethereum scaling solution Polygon. For the uninitiated, prediction markets allow users to bet on the outcome of future events. For Polymarket, these events can be anything from sports to pop culture to politics to war.

Beyond serving as a platform for speculation, many have tipped the ability of prediction markets like Polymarket to offer more accurate insights than traditional polls. Why? People have to put their money where their mouth is, so they are incentivized to bet on what they believe in.

Polymarket has become increasingly popular in recent months, with several citations in prominent media outlets as speculation around the coming U.S. presidential elections gathers momentum. According to Polymarket Vice President David Rosenburg, over $260 million in bets related to the 2024 election have been placed on the platform in the past four years.

In the past month alone, monthly volumes on Polymarket have soared nearly 200% from just over $81 million to over $243 million. At the same time, monthly active wallets on the platform have surged about 40% from over 24,600 to over 34,500, according to Dune data at the time of writing.

Polymarket’s recent rise raises questions about the secret to its success where others have failed.

Why Polymarket Stands Out

Launched in 2020, Polymarket is not the first decentralized prediction market to emerge from the crypto space. Projects like Gnosis and Augur were launched in 2015 and 2018, respectively. Still, Polymarket continues to see mainstream adoption unattainable by its peers.

One key to Polymarket’s success is the platform’s ability to seamlessly onboard users by abstracting the complexity of creating and managing a crypto wallet . Leveraging wallet-as-a-service provider Magic Labs, Polymarket allows users to create accounts strapped with self-custodial wallets by submitting their emails.

Beyond the ease of creating accounts, Polymarket also stands out for its current zero-fee policy. At the time of writing, unlike the competition, Polymarket does not charge users for buying or selling market shares. 

Now that we know the factors that have helped Polymarket stand out, let’s look at how it works.

How to Use Polymarket

Opening the Polymarket website introduces users to a flurry of events to bet on. However, users must log in or sign up for the platform with their email or existing crypto wallet to speculate on these events. 

After getting a wallet, the next step is to fund your account with USDC . At the time of writing, users can deposit USDC into their Polymarket account through several methods, including the mainstream payment platform PayPal. From here, the fun begins.

With your account funded, you can now speculate on the outcome of any event you choose. Users only have to buy shares in line with their expected outcome to enter a bet. Share prices range from $0.01 to $1. The prices also represent the odds of something happening as the market decides. 

For example, the Polymarket poll on the winner of the presidential election 2024 prices a “Yes” bet on Donald Trump at 64 cents per share, suggesting that the market believes that the former U.S. president stands a 64% chance of winning the election. When an outcome is confirmed, your share will either appreciate $1 or tank to zero, depending on whether you predicted the right result as confirmed by a smart contract.

Meanwhile, on Polymarket, your bets are not locked in, meaning you can sell your shares before an outcome is decided either to take profits or stem losses.

Beyond instant market buy orders, you can also place limit orders on Polymarket if you believe a share price is too high. This limit order can have a time limit to close the order if it is not filled within a specified window.

There is also a comment section within markets on the platform that allows users to debate their views.

Despite Polymarket’s growing adoption and the high praise from industry leaders in recent months, several industry leaders believe that the application could be more streamlined to bring in more users.

Still Room for Improvement 

In December 2023, 1confirmation founder Nick Tomiano maintained that Polymarket could still bolster its appeal to crypto degens and non-crypto natives, tipping the introduction of things like points, a token, and leverage to do the trick for degens while calling for more user experience improvements for newer crypto users.

Tomiano is not the only one who has expressed that Polymarket still has room to grow. On July 9, Ethereum co-founder Vitalik Buterin pushed for the Ethereum network to implement changes like ERC-3770 and ERC-7683 , which could allow Polymarket to seamlessly accept and convert deposits from networks other than Polygon and support popular Web 2.0 payment Methods like card payments, Google Pay, and Apple Pay.

First introduced in August 2021, ERC-3770 intends to create a wallet standard to display chain-specific addresses with human-readable prefixes. ERC-7683, on the other hand, was introduced by Uniswap Labs and Across Protocol in May 2024 to enable better cross-chain trade execution.

On the Flipside 

• Following a 2022 CFTC settlement , Polymarket cannot offer its services to U.S. users.
• There are doubts about whether Polymarket can remain relevant after the November 2024 election.

Why This Matters

Polymarket is one of crypto’s breakout successes of 2024. As the platform plays an increasingly prominent role in influencing political discourse, it is necessary to understand what it is and how it works.

Read this for more on Polymarket:
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