🌎 Predict 2024 Elections Using Decentralized Prediction Markets

What’s the buzz around decentralized prediction markets for the 2024 elections? Discover how you can predict the next president and potentially profit from your insights.

What are Decentralized Prediction Markets and How Do They Work?

Decentralized prediction markets are platforms allowing users to bet on real-world event outcomes using blockchain technology. These markets operate on decentralized networks, eliminating central authority control. Instead, they rely on smart contracts—self-executing contracts with the terms directly coded in. This ensures transparency, security, and tamper-proof transactions.

One prominent decentralized prediction market is Polymarket. Running on the Ethereum (ETH) Layer 2 (L2) network, Polygon (MATIC), Polymarket lets users speculate on events like political outcomes, entertainment, and sports using the stablecoin USDC. This integration ensures liquidity and stability in transactions.

Polymarket uses an automated market maker (AMM) pool model, similar to Uniswap (UNI). Liquidity providers supply on-chain market liquidity, and users trade tokenized shares to place bets. For instance, if you believe a candidate will win an election, you can buy “Yes” shares at a price reflecting current market odds. If your prediction is correct, you profit; otherwise, you incur losses.

Other platforms like Augur and Hedgehog also offer decentralized prediction markets. Augur operates on the Ethereum blockchain, using a native token (REP) for betting. Hedgehog focuses on user-friendly interfaces and diverse market offerings.

Popular Bets on Polymarket

The 2024 US presidential election has driven significant activity on Polymarket. Here are some popular bets and what they indicate about public sentiment:

Biden’s Debate Performance

The first presidential debate on June 27, 2024, significantly influenced betting patterns on Polymarket. Joe Biden’s performance, widely criticized, led to a surge in bets. Before the debate, Biden had a 91% chance of being the Democratic nominee, which dropped to 71% post-debate. Over $21.2 million was bet on Biden, and $5.06 million on Kamala Harris, who now has 11% support.

Simultaneously, the probability of Biden dropping out increased from 19% to 44% by July 1, later stabilizing at 35%. This volatility reflects the uncertainty surrounding his campaign.

On the Republican side, sentiment overwhelmingly favors Trump, with over $6.6 million in bets predicting a 99% chance of his nomination.

Swing States Predictions

Swing states are crucial in determining the election outcome. Polymarket’s prediction polls indicate a Republican sweep in key states:

Nevada: 71%
Michigan: 53%
Pennsylvania: 58%
Arizona: 73%
Wisconsin: 56%
Georgia: 80%
North Carolina: 83%

With over $3 million in total bets, the Republican Party is predicted to win all these battleground states.

Additionally, there’s a 56% chance that Israel will invade Lebanon before September, highlighting complex geopolitical situations.

How to Make Money from Decentralized Betting Markets?

Decentralized prediction markets offer opportunities to earn money but come with high risks. Here’s how you can profit:

Becoming a Liquidity Provider

One way to make money is by becoming a liquidity provider:

Deposit USDC: Add USDC to the platform’s liquidity pool.
Earn Fees: Earn a share of the trading fees whenever users place bets.
Automated Market Maker (AMM): The platform uses an AMM model, ensuring efficient use of your funds for trades and bets.

This method provides a steady income without directly betting, making it a lower-risk option.

Making Direct Bets

Another way to profit is by placing direct bets:

Choose an Event: Select an event to bet on, such as the presidential election outcome.
Analyze the Odds: Evaluate current odds and make your prediction.
Place Your Bet: Bet an amount you’re comfortable with, knowing that correct predictions can yield significant returns.

While these opportunities can be lucrative, they also carry high risks. If odds don’t favor you, you may incur substantial losses. Trade cautiously and never invest more than you can afford to lose. Always conduct thorough research and consider seeking advice from financial experts.