Polymarket Hits $240M Trading Volume on Election Day

On a pivotal night for Polymarket, the popular cryptocurrency application successfully processed $240 million in trading volumes seamlessly.

This achievement marks a significant milestone for a decentralized application (dapp) that primarily operates on-chain, showcasing one of the first mainstream tests for crypto.

Understanding Polymarket's Functionality

Polymarket utilizes a “binary limit order book” (BLOB), a hybrid-decentralized model typical of many decentralized exchanges (DEXs).

• Offchain Matching: Limit orders are matched off-chain.
• Onchain Execution: Trade settlements and executions occur on Polygon's Proof of Stake (PoS) sidechain.

On election day, the underlying blockchain efficiently handled 2,921,668 transactions, averaging approximately 33.8 transactions per second (TPS) with a reversion rate of 7%, according to Blockworks Research.

Polygon's Performance and POL Token Insights

While Polygon celebrates its success, it is notable that the POL token has not seen significant value appreciation despite Polymarket's performance.

• Fees Generated: On election day, Polymarket users contributed only $10,571 in fees for Polygon.
• Token Performance: POL (formerly MATIC) rose by 7.2% on election day, reaching $0.3, yet remains down about 54% year-to-date.

This situation does not undermine Polygon; its sidechain was designed to provide ultra-low fees during a time when Layer 2 solutions were limited.

Future Prospects for Polymarket

Looking ahead, Polymarket's success primarily hinges on US political elections. After the elections, it will be essential for Polymarket to explore new areas of interest that can generate the same level of mainstream engagement as political betting.

• Potential Growth Areas:
  • Sports betting, which represents the third-largest category of open interest on Polymarket, could be a viable avenue.
  • However, this sector is already crowded with existing crypto platforms such as Shuffle, Gandom, Rollbit, and Stake.com, as well as numerous Web2 options.

For further insights into Polymarket's future directions, listeners can tune into the latest 0xResearch podcast.