How does Polymarket work?

Polymarket is described as a crypto betting platform or a prediction market. It allows users to bet on outcomes of various events using cryptocurrency. Here’s how it works:

1. Betting on Events: Users can bet on nearly anything, ranging from sports games to whether specific events will occur (e.g., "Will Joe Biden get COVID?"). Bets are typically in a yes or no format, where the market sets the line based on the collective bets of participants 1.

2. Mechanics of Betting: The payout is determined by the proportion of people betting on each outcome. If fewer people bet on your chosen outcome, your potential payout increases because your bet is seen as taking on more risk. For example, if 73% bet "no" on an outcome, those betting "yes" would receive better odds and a higher payout if correct 2.

3. Blockchain and Validation: All bets are made on the Ethereum blockchain. The platform itself does not custody user funds or host the bets. Instead, Polymarket acts as a display for these bets, allowing users to interact with the underlying betting protocol. The outcomes of events are validated by a decentralized group of people called "trusted oracles," who ensure the results are accurate before finalizing the bets 3.

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     1

     Betting on Predictions

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     2

     Betting on Beliefs

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     3

     Crypto Betting Insights

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Overall, Polymarket offers a way to "bet on your beliefs," leveraging crypto technology to facilitate decentralized and transparent betting on future events.