Rather than relying on traditional experts, prediction markets draw on the “Wisdom of Crowds,” asserting that the more people weigh in on a subject, the more precise the forecast will be. “It’s the most accurate thing we have as mankind right now,” said Coplan in an interview with CBS.  

Polymarket gained major attention during the 2024 U.S. presidential election. While traditional pollsters and pundits couldn’t call the race, the site predicted Trump had a 58% chance of winning pre-election day. In total, more than $3 billion was traded on the outcome. For many, platforms like Polymarket are becoming alternatives to traditional forecasting and even to traditional media.

How Does it Work? 

When you open Polymarket, you are presented with an infinite scroll of real-world events and their possible outcomes. Will SpaceX IPO before June 30, 2026? 2026 FIFA World Cup winner? Will the U.S. confirm that aliens exist before 2027? 

Each outcome is priced as a share between $0 and $1, reflecting the market’s implied probability. For example, if a “Yes” share trades at $0.58, the market is indicating a 58% chance that the event will happen. If you buy at $0.58 and the outcome resolves in your favor, the share pays out $1. If not, it expires worthless.

Prices fluctuate in real time as new information enters the market, similar to equities trading. Traders can buy or sell shares at any point before resolution, allowing them to realise gains or limit losses without holding until the outcome.

Polymarket operates using cryptocurrency, with all trades settled in USDC, a stablecoin pegged to the US dollar. Users deposit USDC into their accounts, which is then used to buy and sell shares on the platform. Because USDC maintains a 1:1 value with the dollar, it provides price stability while enabling fast, on-chain transactions.

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Trading or Gambling? 

In traditional sports gambling, when you place a bet on an outcome, you’re betting against the house. Operators set the odds and build in a profit margin to generate revenue. While odds may shift over time, your payout is fixed at the odds at the moment you place the bet.

Prediction markets, by contrast, facilitate peer-to-peer trading, removing the bookie altogether. Prices are set by supply and demand, and directly reflect the market’s collective estimate of an event’s likelihood. Platforms instead charge a small fee to facilitate trades.

Polymarket and other prediction markets have faced ongoing legal scrutiny in the U.S., as regulators initially struggled to distinguish them from traditional gambling. Today, Polymarket has recently re-entered the U.S. through a Commodity Futures Trading Commission (CFTC) regulated entity, though its global platform operates under a different regulatory framework.

Prediction markets have positioned themselves as a “neutral transparent financial market. We’re like the New York Stock Exchange,” explained Tarek Mansour, CEO of Kalshi, another popular prediction market. 

However, access remains restricted in many parts of the world. Several countries, including the U.K., France, and Singapore, limit or prohibit such platforms under broader gambling regulations. 

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Professional Prediction Market Traders 

Hitting over 670,000 monthly users in 2026, Polymarket has attracted more than just casual bettors. The platform draws journalists, policy insiders, news junkies, and quantitative traders: anyone with an edge on future events. Top earners on Polymarket have made significant profits by trading on politics and sports. 

OBP even recently profiled two traders who left careers in risk analysis and quantitative research to trade full-time on the site. They now reportedly earn six figures monthly through prediction markets. Logan Sudeith, one of the traders, told CBS that “markets are the most efficient way to get to real information.” 

Whether turning a profit or not, users appear deeply engaged. Polymarket boasts an impressive monthly retention rate of 50.3% and a 3-month retention rate of 30%, pointing to strong repeat usage and sustained interest.

Odds on Polymarket for the winner of the U.S. presidential elections 2024
Image Source: polymarket

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Ethics and Risks of Trading on the Future 

When real-world events meet users who are willing to bet on them, the ethical lines get blurred. In prediction markets, access to better information can translate directly into profit. Users are incentivised to act on specialised knowledge, with financial rewards tied to how accurately they anticipate future outcomes.

This dynamic becomes problematic when users place bets on sensitive or high-stakes events. At one point, users were trading on whether a nuclear weapon would detonate in 2026 by March 31, June 30, or before 2027. The resolution rules stated that a “yes” outcome would pay out if a nuclear detonation occurred anywhere in the world, whether intentional or accidental.

The market attracted more than $830,000 in volume before being quietly archived following online backlash, raising broader questions about where platforms should draw the line.

The Future of Prediction Markets 

What started as a fringe experiment has grown into something far more influential than people expected. Prediction markets are moving into the mainstream, striking partnerships with news organisations and sports companies alike.

CNN integrated Kalshi predictions into its reporting, with the outlet displaying real-time probabilities of future events across its platforms. Over a dozen professional sports teams have also signed deals with prediction markets. Meanwhile, Dow Jones publications such as The Wall Street Journal and Investor’s Business Daily are beginning to feature Polymarket data.

Prediction markets are increasingly positioning themselves as information hubs, offering probabilities instead of carefully constructed opinions. Regulators are still struggling to define who should be allowed to trade, and on what. But with Polymarket reportedly valued at over $11 billion and processing over $1.5 billion from users every week, the momentum behind prediction markets is hard to ignore. 

Main Image: Polymarket CEO Shayne Coplan. Courtesy of Polymarket

The post Inside Polymarket: How Prediction Markets Are Redefining Forecasting and Online Betting appeared first on UrbanGeekz.