Prediction markets give Trump 33% chance of a win

Polymarket is an information markets platform built on Ethereum where speculators can bet on the world’s most highly-debated topics such as the US election, COVID-19, DeFi, cryptocurrencies, and more. It utilizes smart contracts to facilitate open information markets in a non-custodial, fee-less, and transparent environment.

Polymarket lets anyone with an opinion – analysts, policymakers, pundits, and traders – put skin in the game by betting on real-world events. By letting people put their money where their mouth is and challenge others to do the same, Polymarket aims to harness the power of free markets to combat misinformation and introduce accountability into the social news cycle.

Last month Polymarket closed a new $4 million funding round led by Polychain Capital with participation from Naval Ravikant and Balaji Srinivasan. Founder Shayne Coplan says the funds will be used to expand its team, especially in engineering, product, and research roles. "Once we got early traction, we soon began to get expressions of interest from some really exciting investors who could sense how passionate we were about information markets. It meant that we ended up being in the lucky position that we could choose investors we believed in."

The Polymarket platform has just entered Stage 2 of its Beta. This will focus on making it easier for mainstream users to use the platform. New features include unlimited free trading, in-app compliant debit and credit card deposits, and email login and sign up.

After releasing stage 2 of its beta two weeks ago, the platform has seen a surge of new users wanting to bet on the outcome of the U.S. election. The dollar volume waged in the market for “Will Trump win the 2020 U.S. presidential election?” has surged to $2.9 million. The volume was just $120,000 two weeks ago.

36% of Polymarket traders believe Trump will win the election. The Polymarket platform says this is a market on whether Donald Trump will win the 2020 US presidential election. It is not about the popular vote – it’s particularly about if Trump will win the election, as defined by the electoral college system, and is set to still be president for a new term.

The market will resolve to “Yes” if Donald Trump receives the required number of electoral votes to win the presidency, whenever it is called. If Joe Biden or any other candidate is declared the winner of this election officially, this market will resolve to “No”. If the election winner is not declared on election night, this market will not resolve until a winner is confirmed.

The reputation of the traditional polling industry took a hit following the 2016 election. Most polls had Trump losing, and while he did lose the popular vote, he was able to win the electoral college and therefore the election.

In 2020 the polls are once again picking against Trump. FiveThirtyEight, a popular website founded by analyst Nate Silver, that focuses on opinion and poll analysis related to politics, economics, and sports, suggests that Biden is heavily favored to win.

Prediction market platforms are leaning towards Biden, but they don’t show the same confidence as mainstream polls. Polymarket gives Biden a 64% chance of winning. PredIQt, a prediction market platform on the EOS blockchain also projects that Biden is 64% likely to win. Decentralized information markets platform Augur is similar again – giving Biden a 65% chance of winning.

On the mainstream betting websites the picture is somewhat different.

The DraftKings betting platform says that if punters think the polls are correct (or even if they’re leaning a bit too much towards the Democratic party), they should put their money on Joe Biden to win the presidency. It then says "if you think the polls are wrong for whatever reason, there’s no better value anywhere than betting on Donald Trump to receive a second term."

People in the betting markets don’t believe in the science of polling, says the platform, and are prepared to make contrarian bets when the odds are in their favor.

Despite basically every input of tangible data being in Biden’s favor to win, all the platform markets are giving the President about a one-in-three chance to repeat. Which was the same odds he had before the election last time, but the same calculations in 2020 have him as a 10-1 underdog.

Draft Kings looked at the current odds for the election and across 10 swing states on PredictIt, Betfair, and Polymarket, along with the odds from FiveThirtyEight.com

Source: DraftKings

While each platform is projecting a Biden win, as is FiveThirtyEight, a majority of DraftKings betters in every state, except for Colorado, are betting that Trump will be the winner, according to a tweet from the platform.

DraftKings punters are not the only ones with a contrarian take. Angel investor Balaji Srinivasan, famously one of the first to correctly predict the devastating global impact of COVID-19 has noticed the gap between 538 projections and the prediction markets.

On Twitter, Balaji speculates that the lockdowns may have contributed to a drop in democratic votes. “If Ds are less likely to vote in-person this year than Rs due to COVID, and only (say) 80% of those would have voted in-person actually end up voting by mail, that could mean a big partisan swing to Republicans. This may be what 538 is missing,” he wrote. “I am expressly not taking any position on the US election. But I am interested in the gap between 538 and prediction markets, and the partisan impact of COVID on in-person turnout may be the factor that current models aren’t taking into account. Only a hypothesis, though.”

The good news is that one way or another, we will know the outcome soon enough. Whatever the outcome, one suspects that everyone is ready for this election period to end.