Shortcomings of Prediction Markets

The lack of risk management features makes it imperative that traders rely on automated alerts and constant vigilance for such volatile markets. These prediction markets are still in their infancy in relative terms, with limited features and events to bet on.

The underlying technology also comes with drawbacks as well as benefits. Polymarket and major competitor Augur have both been affected by ongoing congestion on the Ethereum network.

Polymarket actually runs on Polygon, an Ethereum sidechain. However, deposits and withdrawals of USDC, the only supported currency, have been slow and expensive of late due to high Ethereum traffic and fees. This issue is widespread throughout Ethereum and the DeFi ecosystem.

IP aims to tackle these issues by launching a new predictions market in the coming year, allowing users to buy and sell crypto directly, among other features.

The space will likely see the launch of increasingly sophisticated platforms and features. With so much demand and money on the line, truth-seekers and market researchers should keep a close eye.

Disclosure: The author held Bitcoin at the time of writing