The U.S. presidential election isn’t the only reason for Polymarket’s success

Author: Sage D. Young Source: unchainedcrypto Translation: Shan Ouba, Golden Finance

Polymarket is a prediction market built on crypto infrastructure that has been rising in popularity due to the U.S. presidential election and is often cited by mainstream media. According to Richard Chen's Dune Analytics dashboard, its monthly trading volume hit an all-time high in July, exceeding $387 million, a threefold increase from $111.56 million in June. As of press time, Polymarket's total trading volume has exceeded $1 billion.

Early-stage investment firm ParaFi Capital, Polymarket's largest single investor, said that while the campaign has contributed to Polymarket's popularity, the November election is not the only factor driving the growing prominence of the prediction market platform.

In a thread on X, ParaFi also attributed Polymarket’s success to a variety of reasons, such as a surge in trading volume in non-election-related markets, and other statistical indicators, Polymarket has received more than 32 million web traffic page views in the past year.  

ParaFi said in a tweet that of the approximately 70,000 addresses using Polymarket, 58% began their journey with non-election markets.

On Polymarket, the remaining 42% of wallet addresses first traded in election-related markets, with the majority of them participating in non-election markets in subsequent trades. “In fact, almost half of users who first traded in election-related markets turned to markets covering topics such as the economy, sports, and cryptocurrencies,” ParaFi said. 

One ​​popular market revolved around the SEC’s approval of a spot ETH exchange-traded fund, which accumulated more than $13 million in trading volume. Total trading volume in non-election-related markets is currently $264 million, while total trading volume in election-related markets is $497.1 million; on a weekly basis, trading volume has increased by 391% from around $5 million in the first week of the year to nearly $25 million in the week ending July 22.  

ParaFi also noted that Polymarket has not seen “a sharp drop in retention as the quarter progresses,” which suggests the platform has strong stickiness for users who want to participate in prediction markets.

US Election Remains in Focus 

While non-election-related markets have driven Polymarket’s growth, the U.S. election still dominates the platform. The top markets by volume and liquidity are all related to the presidential race, such as who will be the winner of the 2024 presidential election ($474.4 million in bets) and who will be the 2024 Democratic candidate ($299.9 million in bets).  

The most liquid non-election-related market was the one on which team will be the 2025 Super Bowl champion, which saw $2.7 million in volume, ahead of which country will win the most gold medals at the 2024 Paris Olympics.

“Over 70% of daily volume in USD terms has been tied to election-related markets in recent weeks, but this is not surprising given the proximity and volatility of events around the election,” ParaFi wrote.

Total value locked in Polymarket, which is made up of total deposits and the platform’s open interest, has reached an all-time high of $89.4 million, up more than 109% from $42.7 million last month, according to Token Terminal.