#314: Polymarket and How a Head of Lettuce Beat Biden

🥬 What could the evolution of prediction markets look like?

While I was scrolling the feed last week, I came across this post from Polymarket, the popular prediction market platform that is reaching mainstream audiences and media.

As I chuckled at how ridiculous the post was, I stopped mid-scroll and decided to dig deeper.

What’s Polymarket?

Polymarket is a prediction market platform built on crypto rails where you can ‘put your money where your mouth is’ on a variety of topics ranging from politics, crypto, sports, and more. I first learned about the platform leading up to the Super Bowl, where an estimated $23.1 billion and 42.7 million Americans bet on the sporting event.

As the US election season kicked into full gear with material developments on both sides of the aisle, Polymarket has quite literally exploded in volume. July transaction volume has reached $238 million this month with a week left.

Source

The company recently announced a $45 million series B fundraise in May, along with an unannounced $25 million in 2022. Last week, Polymarket shared that Nate Silver (founder of FiveThirtyEight, an opinion poll analysis platform) has joined as an advisor.

Will Biden withdraw from the presidential race?

After Biden’s poor debate performance on June 27th, speculation around Biden withdrawing from the presidential race ramped up with questions on his ability to serve another term swirling around. Polymarket’s largest prediction market around this topic was “Biden drops out of presidential race?”, with over $21 million in bets.

As speculation continued, derivatives of the original prediction market popped up, with more specific parameters on whether the market would resolve to yes or no. Although Biden dropped out, some markets resolved to ‘no’ depending on these conditions.

Lettuce vs. Biden - Who lasts longer?

The final derivative of the ‘Will Biden drop out?’ prediction market involved lettuce with the post I shared above. Funny for some, offensive for others, IMO the goal of this particular derivative was to create awareness and engagement rather than drive betting volume to this specific market itself, as evidenced by the relatively small $107k bet.

The original post announcing this new market went viral, getting 2.8 million views, paired with a livestream including a head of lettuce, a framed photo of Joe Biden, and other accessories.

This derivative market even came with a promotional fight poster. When Biden dropped out and the market resolved to ‘Lettuce’, Polymarket created another poster showing Lettuce delivering a finishing move on Biden, pro wrestling style.

Why is this particular prediction market interesting?

At its core, this market is no different from the others

Although this derivative market around Biden dropping out is ridiculous on the surface, it’s no different than the other markets. There are clear parameters around how the market would resolve, with the rules stating that the shelf life of a head of lettuce is 10 days.

The market opened up on July 18th, so if Biden didn’t drop out by end of day July 28th, the outcome would resolve in Biden’s favor.

What is notable is the framing around this prediction market. Instead of time as the factor that determines who/what wins, the concept of time is literally wrapped in a head of lettuce to represent it in a different way. This creates a new dimension around how the prediction market is viewed.

Will Biden drop out by X date? ➡️ Will Biden drop out before a head of lettuce goes bad (by X date)?

There was a campaign around this

Although it was a short-lived campaign, it was an effective one with fight posters, a livestream, and the manifestation of a silly situation. To some, this particular prediction market had entertainment value, not just speculative financial value.

Backstory and context

This lettuce situation didn’t come out of thin air. In the rules section, the team shared the origin story which I had no idea about.

In fact, the livestream concept came from Liz Truss event as well.

These observations suggest that prediction markets may be entering a new chapter where they can be:

• Framed more creatively

• Have their own activations or marketing campaigns

• Tied to statements and claims with a backstory and lore

The memecoinification of prediction markets

As I started following Polymarket’s evolution, one Warpcast post caught my eye.

The feature isn’t live yet, although there is a suggestions channel in the Discord. But when it does go live, we may see a pump.fun type of moment. Just as pump.fun allows anyone to create a memecoin in just a few clicks, in the future anyone may be able to create their own prediction market and earn from it. On top of that, teams, products, and protocols may leverage Polymarket as a marketing channel, not just a revenue channel.

In order to do so, the creator will have to be creative and market it through a variety of strategies. And Polymarket has shown how that can be done.

Other interesting things

• Last week I wrote about Squiggle #9999. Yesterday, Snowfro shared an update on Squiggle #9998, which will be minted to the farewell smart contract with a physical surprise for those who signed the ‘yearbook’.

• Youbi Capital published an analysis on memecoins and launchpad platforms. IMO this analysis has parallels with prediction markets and their eventual evolution into launchpads.

• Want to chat about anything I’ve written about or another topic? Let’s do it!

See you Thursday!