Original | Odaily Planet Daily ( @OdailyChina )

Author | Wenser ( @wenser2010 )

Recently, the popular prediction market Polymarket has once again attracted high attention from the cryptocurrency community. According to reports, some users expect the platform to launch tokens next year, and a considerable number of traders have already been trying to obtain potential airdrops. The reason for this idea is that Polymarket currently does not charge transaction fees or subscription fees, and after the conclusion of the U.S. election, a new round of growth and expansion may rely on token issuance. According to Fhantom Bets, the Polymarket website has seen an increase in trading volume after the B round of financing, and although the rumors of issuing coins have not been officially confirmed or estimated time announced, it is speculated that the token release is likely to take place after the U.S. election.

In view of this, the next focus of market attention may shift to other platforms in the prediction market race. In this article, Odaily Planet Daily will provide a brief overview and analysis.

A comprehensive view of the prediction market race: TVL doubles in two months

On July 10th, according to DefiLlama data, the TVL of the prediction market sector reached 77.42 million U.S. dollars, hitting a historical high. Among them, Polymarket ranked first with a TVL of 47.69 million U.S. dollars, and other protocol platforms with a TVL of over 1 million U.S. dollars include Azuro, Gnosis Protocol V1, Lumi Finance, Augur, EtherFlip, and WINR Protocol.

Two months later today, according to information from DefiLlama website, the TVL of the prediction market sector has exceeded 146 million U.S. dollars. In addition to the rapid growth of Polymarket (TVL has nearly tripled to reach 121 million U.S. dollars), other platforms or protocols including Azuro have also experienced varying degrees of growth.

Defilama website information

The rapid growth of the prediction market sector may be mainly attributed to the following points:

• Increase in prediction events. With the approaching of the second debate of the U.S. presidential election _ (Note from Odaily Planet Daily: This Tuesday, which is tomorrow, Trump and Harris will have their first debate after Biden withdrew from the Democratic presidential candidate, which has led to increased activity on prediction market platforms.)_, the activity of prediction market platforms has increased.

• Weakness in the cryptocurrency market. The recent underwhelming performance of the cryptocurrency market may also be a major reason for the increase in trading volume and TVL of the prediction market. After all, during times when mainstream tokens such as Bitcoin and Ethereum have more downtimes than uptimes, compared to the "gambling-style betting" of high-leverage contracts, the prediction market, which is more similar to "binary options" with "betting on size" and "arguing win or lose," may be a market preferred by holders of stablecoins in the cryptocurrency market.

• Support from celebrities and institutions. In addition to the investment from Ethereum co-founder Vitalik, PolyMarket CEO Shane Coplan recently announced that "Bloomberg Terminal has integrated the prediction market Polymarket." Furthermore, he pointed out: "What was once a fringe sci-fi idea to change the flow of information has now become the new normal, as tens of millions of people have become accustomed to relying on Polymarket predictions as a source of facts to understand what is happening in the world."

• Failure of traditional prediction channels. Taking the prediction activities related to the U.S. presidential election as an example, traditional prediction channels such as political commentators and opinion polls have exposed shortcomings such as poor timeliness, small sample data, and vague prediction result standards during a series of dazzling twists and turns, such as Trump's conviction, Trump's assassination, Biden's withdrawal, and Harris becoming the new Democratic candidate. In comparison, the cryptocurrency prediction market, which has received "real money" bets, is more sensitive, representative, and certain in results, and has become the preferred choice for more and more people.

In terms of "using gambling predictions as a news trend," the cryptocurrency prediction market undoubtedly has an advantageous position.

As a result, while Polymarket takes the lead, other prediction market protocol platforms are not willing to lag behind.

Review of the top 5 cryptocurrency prediction markets: Each has its own strengths and specialties

Due to space limitations, we will only provide a brief introduction to the currently representative cryptocurrency prediction market projects on the market for readers and relevant users to refer to.

Azuro: A liquidity pool-supported betting protocol

As a liquidity pool-supported betting protocol, the difference between Azuro and Polymarket is that the former is a basic protocol for creating on-chain prediction markets, including on-chain smart contracts and web components, and users can create multiple prediction market Dapps based on Azuro; while the latter is more like a feature-complete front-end platform.

According to Dune data, the trading volume of prediction markets supported by the Azuro protocol currently reaches 204 million U.S. dollars, with 5.814 million transactions and 30,900 users. In addition, according to the official Dune data panel, the total TVL of the Azuro protocol reaches 9.132 million U.S. dollars, with a total of 34 applications.

In addition, Azuro has issued the token AZUR, and according to Coingecko data, the current price of AZUR is around 0.086 U.S. dollars, with a market value of 13.11 million U.S. dollars, a decrease of over 60% from the high price of 0.2396 U.S. dollars two months ago.

It is worth mentioning that Azuro, which positions itself as a "blockchain prediction layer," announced in April this year that it had completed a $3.5 million financing round, with participation from SevenX Ventures, Fenbushi Capital, Arrington Capital, Polymorphic Capital, Red Beard Ventures, Dewhales, and G1 Ventures.

AZUR token information interface

BET: Solana Ecosystem Platform Launched by Drift

In mid-August, according to official news, Drift Protocol announced the launch of the prediction market B.E.T on Solana, the first prediction market centered around the U.S. election. It will launch more market categories in the future, covering sports (F1, CryptoFightNight), cryptocurrencies, and culture (Solana debate results). The introductory article, titled "Why be (B)ullish on (E)very(T)hing on Drift?" also played with the "hidden English" pun.

Shortly after its launch, according to Solana Floor's post, the platform attracted liquidity amounting to 3 million U.S. dollars.

According to Dune data, the platform's total trading volume currently exceeds 24.78 million U.S. dollars, with a total of 6872 transactions and 1027 users. Although there is still a certain gap compared to industry leaders, considering that the current open version is the Alpha version, it mainly focuses on political betting activities, and its future potential is still worth looking forward to.

BET platform Alpha version page

SX Bet: A Sports-focused Betting Platform

Founded in 2019 and built on the Ethereum ecosystem, according to its official account @SX_Bet, it is the "world's largest sports betting platform," mainly focusing on final winner bets for major events such as tennis, football, baseball, and basketball. Recently, its betting section has also added Crypto, Degen Crypto, and political bets, focusing on the price trends of mainstream crypto assets and meme coins, as well as the winner of the U.S. election, among other related topics. It is known that the project has received support from investment institutions such as Nascent, Hack VC, and CMCC Global.

Unlike Polymarket and other prediction markets, SX Bet is more like traditional sports betting, supporting only single bets. Before the outcome of the prediction event is determined, bets cannot be freely traded, so it cannot exit the betting activity in the middle and lock in profits in advance like Polymarket.

The platform's innovation lies in the first implementation of a system for combination bets, where users make predictions on a series of events, and only when all predictions are correct can they receive a larger amount from the prize pool. In a sense, it can be seen as a "leveraged prediction market."

In addition, according to its official website, its payment channels support traditional payment tools and crypto deposits, making it relatively user-friendly. According to on-chain information, the platform's token SX is currently priced at around 0.055 U.S. dollars, with an on-chain market value of around 7.48 million U.S. dollars.

SX Bet official website interface

Augur: A Failed Prediction Market Project

Compared to Polymarket, which is still active in the market, Augur is undoubtedly a "negative example" - despite receiving support from Polygon in 2021 through a $1 million incentive program, as a prediction platform, without more liquidity introduction, its fate can only be "slow death."

Its official account @AugurProject last tweeted on November 18, 2021, when the project announced the introduction of AugurDAO, a decentralized autonomous organization that will collaborate with DXdao, the decentralized autonomous organization governing the prediction market Omen, and use the DXdao structure to build AugurDAO, with governance driven by REPv2 holders. However, the final result was naturally unsatisfactory.

The project's token REP has now almost approached zero, and Upbit officially delisted Augur (REP) on July 13, 2023.

REP token related market information

Swaye: Permissionless Market Creation and Social Integration Incentives

Although Polymarket has once again attracted high market attention during the 2024 South Korea Blockchain Week event, it has also been criticized for its shortcomings, one of which is the "market creation mechanism" that still requires centralized platform review. In comparison, Swaye may be a more motivating choice for many people.

On the one hand, Swaye attempts to combine prediction markets and meme coins. Early users can not only bet on specific outcomes but also have more dissemination power because betting activities help increase LP profits. On the other hand, Swaye has also integrated the Farcaster social protocol, making it easy for users to share predictions through social dynamics, providing the potential for viral dissemination.

According to its leaderboard page, although there is relatively little liquidity, the top-ranked trader still receives over 112% in returns. In time, meme coins may become an indispensable part of the prediction market.

Official website interface

Conclusion: Cryptocurrency Prediction Markets are Far from Over, AI Prediction Markets May Become the Next High Ground

Recently, at the 2024 South Korea Blockchain Week event, Ethereum co-founder Vitalik Buterin stated that artificial intelligence and prediction market technology can accelerate the generation of community notes on the social media platform X_ (Note from Odaily Planet Daily: Community notes are a feature of the X platform that allows the community to add background information to potentially misleading posts)_. Vitalik pointed out that the biggest criticism of community notes is that they "don't appear fast enough," which could lead to some users being misled by inaccurate information before the notes appear. Prediction markets may be the solution to this problem.

The regulated prediction market platform Kalshi recently won a CFTC lawsuit, allowing it to launch predictions for the U.S. election. Although the platform only operates in the United States and settles trades in regular U.S. dollars, this development is a major positive for the prediction market.

In comparison to the total TVL of the entire prediction market, which is far from the market volume of traditional betting markets, we have reason to believe that cryptocurrency prediction markets are far from over, and Polymarket is not invincible. With AI development thriving now and in the near future, AI prediction markets may become the next "high ground" in the cryptocurrency industry.

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