In November, will the Fed cut interest rates by 0.75% or more? How many hurricanes will be recorded in the Atlantic Ocean in 2024? Will Ferrari be crowned F1 constructors’ world champion this year? So many questions which, on polymarket.com, give rise to online bets. This platform also made itself known by announcing, several days before the election, the victory of Donald Trump. Its originality is to use blockchain technology (Polygon PoS). Payments are made only in stablecoin USDC, a cryptocurrency whose price is fixed at 1 dollar. Thanks to this architecture, transactions are carried out automatically, decentralized, secure and transparent.
The budding bettor must create a personal account on the site to store their USDC. The transfer in USDC can be done via a wallet – an electronic wallet created on the blockchain -, a transfer from a platform for buying and selling cryptocurrencies such as Coinbase, or by bank card. Once the USDC is in your pocket, you can bet. The site is organized into sections: sport, politics, economy, culture, science, etc.
The value of shares fluctuates over time
To bet, you buy shares. Their price varies over time between 0.01 USDC and 1 USDC, depending on bettors’ opinions on whether the event will take place or not. If to the question “will there be a ceasefire between Ukraine and Russia in 2024?”, the “yes” share is trading at 0.18 USDC, this means that the gaming community believes The chances of such a truce being signed are 18%. The “no” part is worth, in mirror image, 0.82 USDC. As information changes over time, prices fluctuate. You can sell your shares at the market price at any time and record your gains, or reduce your losses, before the stake cut-off date. Once the result is displayed, the winners receive 1 USDC for each share held and the others lose their stake.
Another originality is “oracles” – computer database management programs – which verify, in the real world, the result of the bet and transfer the information to a smart contract. This computer code is activated as soon as the previously defined conditions are met, triggering the payment of winnings to bettors. Other smart contracts control the evolution of the price of the shares and ensure their resale before expiry. Thanks to this fully automated operation, Polymarket applies a reduced commission of 2%, taken from the winnings collected at the end of the bet.