Over $1bn has been wagered on Polymarket on the upcoming US presidential election. [Image: Shutterstock.com]
Polymarket seeking funding
Crypto betting platform Polymarket is seeking $50m in fresh funding as the US presidential election draws nearer, according to a report published on tech industry news site The Information.
The prediction market platform is also considering launching its own crypto token as part of the money-raising drive, which would be first offered to those participating in the next round of funding.
Polymarket has seen an explosion in growth in recent years, with the upcoming presidential race driving more interest and traffic in the US in particular, where betting on the outcome of elections is illegal.
just under $1bn has been staked on the outcome of the election
At the time of writing, just under $1bn has been staked on the outcome of the election, with hundreds of millions more in related bets on the popular vote, individual states, and even derivative bets such as who the Polymarket favorite would be on the day of the election.
Polymarket’s rapid rise
Polymarket, launched in 2020, is a prediction market that allows users to wager crypto on real-world events, from sports matches to political and cultural events.
Outcomes of events are resolved using the UMA protocol oracle, which allows the wagers to be programmed as smart contracts on the blockchain before they are settled in USDC, a stablecoin pegged to the US dollar at 1:1. It is not known whether the potential Polymarket token is intended to replace part or all of the oracle.
At the start of the year, monthly volumes on the platform were around $54m, but that figure had doubled by June and increased to $472m in August.
The pace of growth led Polymarket to receive over $70m in two rounds of funding leading up to May 2024, which included investors such as Peter Thiel and Ethereum creator Vitalik Buterin.
Regulators keep watch
Unsurprisingly, the rapid rise of Polymarket has also led to scrutiny from regulatory bodies. Despite Polymarket being based in New York, IP addresses from the US are blocked from accessing the platform. However, like many offshore crypto betting sites, this can be circumvented with little effort.
In January 2022, the platform was handed a cease-and-desist order and $1.4m fine by the Commodity Futures Trading Commission (CTFC), although this was reduced after a cooperation agreement.
Rival prediction market Kalshi has also had its political markets suspended after the CTFC filed an appeal, which is still ongoing, against the decision to allow election betting.
CFTC chair Rostin Benham stated that Polymarket was under observation
More recently, in a July 2024 briefing, CFTC chair Rostin Benham stated that Polymarket was under observation, saying: “If anyone, Polymarket or otherwise, conducts themselves in a way that breaks the law we will use our civil enforcement authority to make sure that conduct stops.”
