Leverage for Prediction Markets will never be big.
At best it's a niche product.
Each dot is a type of Polymarket trader with 5x leverage, priced so the lender breaks even. Further right = more of them end up better off. Higher = the lender makes money on them. Bigger = more of the volume.
No group reaches 50%. In every one, most traders end up worse off with leverage than without.
Now look at the two dots furthest right, pros and sports bettors. Both are below zero: the lender loses money on them.
The highest dots? Retail and bonders, the people who want leverage most and get hurt by it.
And the giant dot is whales, almost three-quarters of all the money. They're sitting on cash. They don't need a loan.
So it loses money on the traders it helps and makes money on the ones it hurts. That's a niche, not a market.
The audience for leverage is thin / no in the market yet.
Full case study in comments
The real question: is W. Legate actually loyal to anyone?
> Become a Thiel Fellow
> Start as a left-wing Democrat bashing Trump
> Found a pillow startup Lose your co-founder
> Pivot to conservative and join Kalshi
> Jump ship from Kalshi to Polymarket
> Pump shady influencer campaigns for growth
> Go full Republican retweeting racist posts
Say what you want about Legate. The man wears a lot of hats.
Is he a genius marketer who knows exactly how to adapt and find his place in the sun, or a carefully planted psyop?
What side are you on? | EP. 5
The CFTC is cracking down on Sports prediction markets.
It just banned exchanges from proposing new type of sports contracts.
Looks like regulator are tying to slowly choke out sports markets
The CFTC contacted @Novig and @ProphetX and ordered them to take down the following markets :
- Who scores the 1st points in a basketball game?
- Will any NFL end with a final score never seen before?
- Will an MLB game produce a never-before-seen score?
- Who will score the 1st point in a Football game?
They argue that these categories are prone to manipulaton.
If you remember it's the same argument that they used to force Kalshi to ban Sports mention markets
Regulations are dropping at an increasing rate :
- July: CFTC forces Kalshi to ban bets on sport mention.
- September: The CFTC send a warning about "manipulation risks" in mention markets in general
- October (Now): The CFTC bans first goal and scorigami markets
---- next ----
- The CFTC bans mention markets ?
- The CFTC drops sports market entirely (reclassied as gambling) ?
Is the Trump admin starting to turn against prediction markets ? Or is the CFTC just trying to hedge their bets for when Democrats come to power ?
NEW STUDY : Polymarket KOLs are bad traders and you will lose money if you follow them.
We all knew it, but it's nice to finally have proof.
A study by Prediction Market Census tracked 307 Polymarket influencers, their wallets and the call they made on social media.
Here's what they discovered 👇
1. Their calls are trash.
Researchers matched 162 public KOL trading calls to their earlier trades.
On those exact same bets:
- avg. KOL return: +12.3%
- avg. Follower entering when posted: −2.4%
If you see a KOL posting shilling a trade opportunity, it's already too late and they are using you as exit liquidity.
1. KOLs are WORST traders than average.
> 57.5% of KOL accounts lost money trading.
> 50.5% of non-KOL accounts with similar trading volumes lose money.
So remember. No competent trader is going to give you free alpha.
If they have alpha, they will keep it to themselves.
If they pretend to have alpha, they are farming you for refferal revenue.
@polyguana Election markets like these are mirrored on every platform so it's the best type of market to trade through a smart aggregator like Polyguana