Prediction markets are quickly growing, with more people joining and betting on future events and occurrences. The growth of prediction markets is fueled by a growing interest in events and fields like sport, climate change, politics, and technology. The prediction market industry is predicted to grow at a CAGR (Compound Annual Growth Rate) of 24.5% between 2020 and 2025.
The market capitalization of prediction markets is also predicted to grow from a modest $7.2 billion to $21.5 billion over the same period. This growth presents an opportunity for new players to enter the market and for existing players to solidify their position in these markets.
What Is A Prediction Market?
The key to understanding what a prediction market means is to understand what a market means. A market is a group of individuals or businesses that purchase or sell goods and services. These goods and services could be anything, ranging from groceries and other items to banking or stock market services.
Prediction markets are just like markets, except that they are a marketplace for buying and selling predictions about upcoming world events. Participants in a prediction market can buy shares in any prediction outcome, just like a stock market.
Participants in prediction markets can leverage their knowledge about the past and the future and forecast real-world outcomes for specific events.
What Are The Problems That Prediction Markets Face?
Prediction markets face several pressing issues that need to be addressed. There is a significant lack of liquidity in prediction markets, along with a lack of traders. The presence of duplicate markets is also a hindrance to prediction markets. There are also legal issues and a lack of decentralization that limit the size of the user base of prediction markets, resulting in a less diverse crowd. A less varied group severely hampers the quality of predictions.
The daily prediction value averaged only $1 million in 2021, a figure that was even smaller during preceding years. Lower numbers severely restrict traders, preventing them from taking positions or hedge against outcomes. The current state of prediction markets offers absolutely no incentive for users, leading to users eventually losing interest in prediction markets. The current prediction markets do not include sporting events, crypto price predictions, and esports.
Polkamarkets: How It Solves The Problems Of Prediction Markets
Polkamarkets takes a new and innovative approach to prediction markets. It is a Defi-powered prediction market that uses blockchain technology and gives people more access to prediction markets while simultaneously allowing people to earn from predictions of real-world events like sports or elections.
Polkamarkets runs on the Polkadot blockchain, bringing in a new era in prediction and forecasting by combining DeFi and liquidity incentives. By disrupting current prediction markets, Polkamarkets has become the most sought-after prediction and forecasting tool. It utilizes the Polkadot blockchain, operating in an entirely decentralized manner while being interoperable with other systems, allowing for cross-chain trading and information exchange.
Prediction markets rely on scale, the more participants and data in a prediction market, the more effective and accurate a prediction market becomes. Polkamarkets hopes to achieve this by incentivizing liquidity providers and traders to facilitate and take positions in the prediction markets. There is also a system of curation and resolution to ensure the efficiency and trustworthiness of markets.
A Shot In The Arm For Prediction Markets
That is exactly what Polkamarkets has done for prediction markets by integrating DeFi into prediction markets. The total value locked in DeFi is more than $58 billion and is continuously rising.
Polkamarkets has unleashed the full potential of prediction markets with the help of DeFi. As the DeFi space grows, so do the trading volumes. Polkamarkets also enables users to earn DeFi rewards through yield farming and staking.
Some Features Of Polkamarkets
Features of Polkamarkets are:
- Rewards: Liquidity providers on Polkamarkets can predict and provide liquidity, mining $POLK in the process. They will also have access to NFTs that will give them exclusive access to features.
- Entertainment: Polkamarkets supports live-streaming and NFT based gamification, allowing users to take in-play positions for sporting and e-sport events. They can also take positions on the price of cryptocurrencies. Polkamarkets also supports live chats and virtual events.
- Fee economy: All platform fees are sent to liquidity providers and platform users.
- An open market: Polkamarkets gives incentive to liquidity providers to provide liquid markets, allowing them to earn trading fees and rewards.
- User-created prediction markets: Users can create prediction markets on Polkamarkets using the $POLK token.
- Event list: $POLK holders can curate prediction markets on the Polkamarkets platform, ensuring that the market is safe and open.
How Does Polkamarkets Function?
Polkamarkets provides a decentralized and interoperable environment for users to monetize their predictions of real-world events. It helps them convert their beliefs into assets with value that can be traded in markets. Users can also buy fractions of outcomes or create their own events.
Moreover, Polkamarkets also features NFT-based gamification and live streaming. This allows users to take positions on sporting and e-sport events. Users can also predict cryptocurrency prices. Polkamarkets has also included virtual events and live chats on the platform.
The $POLK Token
The $POLK token is Polkamarket’s native token and has several use cases.
- Users can mine the $POLK token by providing liquidity to Polkamarkets and making predictions. ⅔ of platform fees go to liquidity providers.
- ⅓ of the platform fees will go towards buying the $POLK token. The platform will reward Liquidity providers from this pool through Yield farming.
Polkamarkets is taking a unique approach to providing prediction markets with a way to improve volume and liquidity. By incentivizing traders and liquidity providers, Polkamarkets hopes to galvanize interest in prediction markets once again. With this unique approach, Polkamarkets looks set to become the go-to platform in the prediction market space.