Crypto prediction markets turn against Trump after first debate

The first debate of the 2020 U.S. presidential election had no clear winner, but crypto-powered prediction platforms are having a field day. 

Election futures on crypto derivatives exchange FTX boomed, with the platform’s CEO reporting more than $4 million in open interest trying to pick the winner between Democrat Joe Biden, and Republican Donald Trump. On FTX, Trump’s brash debate performance got a big thumbs down and drove a 10% crash in the price of futures contracts backing his re-election.

Volumes on FTX are amplified by leverage. On predictive platforms that do not offer leverage, more modest six-figure volumes were recorded. Polymarket saw more than $100,000 in volume flow into its ‘Will Trump win the 2020 U.S. presidential election?’ market on September 30, with sentiment similarly shifting against the incumbent president over the course of the debate. Almost 55 percent believe Trump will not win the election.

Speaking to Cointelegraph, Polymarket founder, Shayne Coplan, said the platform was designed to find answers to issues “people really want to know about rather than just things that they want to speculate:”

“The beautiful thing about markets, in my opinion, is their ability to aggregate information and synthesize it into accurate forecast. That’s what price discovery is — aggregating everyone’s opinions and knowledge and synthesizing it into one metric. And that can have incredible social and informational value.”

Polymarket is built on Ethereum (ETH), however, is exploring Matic as a scaling solution for the interim leading up to the launch of ETH 2.0. Transactions executed on the platform do not carry fees and Polymarket is non-custodial.

The platform uses an automatic market maker (AMM) for price discovery, with all market participants effectively trading against the AMM’s liquidity pool. Ideas for markets can be submitted from Polymarket’s users, and are curated by firm’s executives to ensure that the terms and conditions pertaining to specific markets are “unambiguous.”