Encryption Prediction Platform: Blockchain Technology Empowers Collective Intelligence Emergence

In recent years, encryption prediction platforms have rapidly emerged as a new force in the Blockchain industry and have garnered significant attention. This unique market model allows users to purchase shares related to the outcomes of future events, thereby predicting the direction of events. It not only provides investors with a new investment channel but also offers valuable data resources for research institutions. Data shows that the scale of encryption prediction platforms is experiencing explosive growth, and it is expected to maintain a high-speed growth trend in the coming years.

Among the many encryption prediction platforms, Polymarket stands out as a leader in this field due to its unique operating mechanism and its responsiveness to current political events. As a decentralized prediction market platform based on Blockchain, Polymarket allows users to bet on the future outcomes of various topics using cryptocurrency. It utilizes smart contracts to operate on the Blockchain, significantly reducing transaction fees and accelerating transaction processing speeds. Since its launch, Polymarket has attracted a large number of users and followers with its high transparency and user-friendly interactive experience, becoming the largest encryption prediction platform currently.

This article will delve into the operating mechanisms and principles of Polymarket, while analyzing the new trends in the cryptocurrency prediction market, aiming to provide readers with a comprehensive and in-depth insight into the cryptocurrency prediction market.

Polymarket: Understanding the Real World Through Betting

Polymarket is a decentralized prediction market platform based on Blockchain technology that has begun to emerge in the public eye in recent years. The platform was founded by Shayne Coplan in 2020, and its inception is closely related to Coplan's profound insights during the pandemic. Faced with a plethora of uncertain viewpoints and opinions in the market, both parties often stick to their guns, making it difficult to persuade each other. Coupled with the spread of misinformation and the influence of profit-seeking algorithms, it has become increasingly challenging for people to see the truth of the matter. Therefore, Coplan established Polymarket to enable people to understand more accurately what is happening in the real world through a completely new approach.

The theoretical basis of Polymarket comes from Hayek's famous paper "The Use of Knowledge in Society." Hayek believed that economic incentives are key to driving people to understand uncertainty more accurately. When economic incentives are in play, people tend to read more and better sources of information, engage in deeper thinking, and try to place their money on the outcomes that are more likely to occur. Coplan put this theory into practice, simply put, by understanding the real world through the act of betting.

Upon opening the Polymarket website, the homepage prominently displays global trending news events, such as the likelihood of Trump winning the upcoming presidential election, whether there will be a conflict between Musk and Zuckerberg, and the expected number of interest rate cuts by the Federal Reserve this year. Users can select specific markets based on personal interests and purchase "outcome shares" that represent the potential results of these events. The market prices of these shares reflect the collective perception of the likelihood of the events, providing users with an intuitive reference. Before the market resolution, users enjoy the flexibility of selling their held shares at any time, and this process usually does not require high transaction fees. Once the results of the relevant events are officially announced, users who predicted accurately have the right to redeem their shares at a price of $1 per share, while shares held by users who predicted inaccurately will lose their value. It is worth noting that all transactions and settlements on the Polymarket platform are automatically executed through smart contracts, a mechanism that ensures fairness, transparency, and security of the transactions.

Polymarket encourages each user to take responsibility for their opinions by introducing a reward and punishment mechanism, making the statistics on the platform more reflective of the true market situation. Compared to previous platforms or social media, Polymarket's predictions are closer to the truth. For example, during the room temperature superconductor event, despite some authoritative media being skeptical, internet celebrities confidently confirmed its realization and even fabricated evidence. Polymarket, on the other hand, provided a more rational prediction, with a true to false ratio of one to nine, demonstrating the rationality of user opinions under the reward and punishment mechanism.

Currently, social media and spam information are rampant, and people's ways of understanding things are often limited. These institutions may not be able to remain objective due to conflicts of interest, while social platforms also recommend information based on user interests, leading to the information cocoon effect. Polymarket, as a decentralized prediction market platform, maintains fairness and justice based on Blockchain technology, providing an opportunity for change in public opinion. Its characteristics of being politically incorrect, de-emotionalized, and objectively real showcase people's true judgments, providing a new perspective for understanding the real world. As the founder Coplan said, Polymarket is a platform that utilizes the wisdom of the crowd.

Can the Polymarket boom continue?

The encryption prediction platform is not a new industry. In fact, as early as 2018, a certain platform established the first encryption prediction platform based on Blockchain technology. However, at that time, due to limitations in technology and the lack of popularity of Blockchain, the platform's cumbersome operation steps and unfriendly interactive interface prevented it from truly entering the public eye. It wasn't until the emergence of Polymarket that the encryption prediction platform was able to truly become popular in the Blockchain industry and become a mature application.

According to the data, Polymarket is attracting widespread attention and participation globally at an unprecedented speed due to its unique betting prediction model. Especially during the current U.S. election period, Polymarket has not only become a popular platform for the general public to bet on their voting intentions, but has also attracted a large number of investors hoping to earn profits through accurate predictions of candidate victories. In the past few months, these active participants have invested hundreds of millions of dollars on Polymarket, directly driving the platform's business scale and visibility to historic new heights.

The latest data from the data platform further confirms the booming trend of Polymarket. Since April this year, both the trading volume and the number of users on Polymarket have seen explosive growth, especially in July when the global attention sparked by the Trump assassination incident led to extensive media coverage of Polymarket as a representative of the prediction market, further enhancing its visibility and influence. As a result of this incident, Polymarket's monthly trading volume in July doubled compared to June, surpassing the $200 million mark, with a daily trading volume consistently exceeding $20 million and the number of daily active traders exceeding 6,000.

The popularity of Polymarket has not only attracted enthusiastic participation from a wide range of users but has also led some idealists in the encryption field to view it as an arbitrator for revealing the truth. They believe that Polymarket, with its decentralized and transparent characteristics, is expected to become one of the main sources of fair information. However, behind the current popularity, we must also confront the many challenges and potential risks that Polymarket faces.

First of all, the lack of continuous capital inflow is one of the key issues regarding whether Polymarket can sustain its future development. As a zero-sum game, the nature of prediction markets determines that they cannot attract continuous passive capital inflow like stocks, bonds, or cryptocurrencies in traditional financial markets. This characteristic poses a challenge for Polymarket in maintaining liquidity over the long term, which in turn affects its ability to achieve sustainable profitability and development.

Secondly, the limitation of market liquidity is also an important issue that Polymarket needs to address. Currently, the top popular topics on Polymarket are almost all related to the US election, which attract the attention of the vast majority of users. However, for most markets, especially those involving non-instant payment and niche themes, there is still a lack of sufficient attractiveness. This results in relatively insufficient liquidity in these markets, making it difficult to form an effective market price discovery mechanism, thereby affecting the accuracy and credibility of the prediction results.

In addition, the issue of the influence of market participants is also an aspect that Polymarket needs to pay attention to. In prediction markets, the lack of a sufficient number of professional market makers and other market participants may lead to market prices being manipulated or influenced by a few advantaged participants. This not only undermines the ability of prediction markets to provide accurate insights but may also trigger market unfairness and a crisis of trust. For example, some industry insiders often have advance knowledge of certain insider information, allowing them to place large bets in advance and reap profits from regular users. Therefore, establishing a more fair and just regulatory and auditing mechanism is also crucial for the future development of Polymarket.

Finally, Polymarket relies on hot news to create topics for people to place bets on prediction directions, which often touches on some socially sensitive events. For example, recently, Polymarket faced criticism for issuing several tweets with inappropriate language through its official social media account (particularly using the offensive term "Retardio" meaning "intellectually disabled") for marketing purposes. Although Polymarket later issued an apology regarding the inappropriate language in the tweets, dismissed relevant staff, and initiated an internal review, it still raised public doubts. Some media believe that Polymarket is profiting from some negative events.

Looking at the Future Development of Crypto Prediction Markets from Polymarket

The popularity of Polymarket undoubtedly reveals the unlimited potential of the cryptocurrency prediction market. Looking back, prediction markets mostly remained in the theoretical stage, and even when there were practical attempts, they were often closely linked to gambling and even exploited by criminals as a tool for money laundering. However, the introduction of Blockchain technology has brought profound changes to prediction markets, and its open and transparent characteristics make on-chain encryption markets easier for ordinary users to accept and trust.

Although Polymarket is not the pioneer of the encryption prediction platform, it is undoubtedly the most mature and influential platform at present. Its success is reflected not only in the rapid growth of user numbers and the continuous increase in trading volume, but also in its successful introduction of the encryption prediction market to the general public, injecting new vitality into this field. The rise of Polymarket has shown us new application cases in the Blockchain industry, as well as the unique charm and broad prospects of encryption prediction platforms.

For a long time, prediction markets have been regarded as the holy grail in the field of cognitive technology. As early as 2014, Ethereum founder Vitalik showed great interest in using prediction markets as a governance mechanism. However, for a long time, prediction markets have faced numerous challenges in practical applications, such as participant irrationality, insufficient market liquidity, and the lack of betting motivation among holders of "correct knowledge". These issues have always constrained the development of prediction markets.

The emergence of Polymarket has successfully broken this deadlock. It not only attracts the attention of a large number of industry professionals but also demonstrates strong vitality and broad prospects in practical applications. Vitalik himself has used Polymarket to track Sam Altman's board exit event, which undoubtedly adds more authority and influence to Polymarket. At the same time, an advisor from a well-known encryption investment firm has also highly praised Polymarket, considering its page to be the best place to start a day on the internet. This evaluation not only reflects Polymarket's outstanding performance in user experience but also highlights its unique value in information acquisition and decision support.

Some industry insiders believe that the encryption industry should reduce zero-sum games and shift towards providing a positive-sum experience. Prediction markets are one of the best options to accomplish this mission. They can serve as platforms for betting, offering users the possibility of entertainment and profit; at the same time, they can also become a source of information, helping users make more informed decisions. This dual nature gives prediction markets a unique position and value in the encryption industry.

However, we must also be soberly aware of the challenges that the encryption prediction market faces in future development. The uncertainty of regulatory policies, the prevention of compliance risks, and the construction of market ethics are all issues that we need to focus on. Only by ensuring compliance and fairness...