Polymarket is about to issue tokens? An article reviewing the top 5 crypto prediction markets

Author: Wenser, Odaily Planet Daily

Recently, the popular prediction market Polymarket has once again attracted significant attention from the crypto community. It is understood that some users expect the platform to launch a token next year, and a considerable number of traders are already trying to speculate on potential airdrops. The idea arises from the fact that PolyMarket currently does not charge trading fees or subscription fees, and after the conclusion of the U.S. election events, a new round of growth expansion may rely on token issuance. According to Fhantom Bets, the trading volume on the Polymarket website has increased following its Series B funding, although rumors of token issuance have not yet been officially confirmed or a timeline published, it is speculated that the token release is likely to occur after the U.S. elections.

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

Overview of the Prediction Market Space: TVL Doubles in Two Months

On July 10, according to data from DefiLlama, the TVL of the prediction market sector was $77.42 million, reaching a historic high at one point. Among them, Polymarket topped the list with a TVL of $47.69 million, while other protocol platforms with a TVL exceeding $1 million include Azuro, Gnosis Protocol V1, Lumi Finance, Augur, EtherFlip, and WINR Protocol.

Two months later, according to information from the DefiLlama website, the TVL of the prediction market sector has surpassed $146 million. In addition to the consistently rapid growth of Polymarket (which achieved nearly a 3-fold increase in TVL, reaching $121 million), other platforms or protocols, including Azuro, have also seen varying degrees of growth.

Defilama website information

A closer look at the rapid growth of the prediction market sector may primarily be attributed to the following factors:

• Increase in prediction events. With the second debate of the U.S. presidential election approaching (Odaily Planet Daily notes: Tomorrow, Trump and Harris will engage in a debate, marking the first confrontation between Harris and Trump after Biden withdrew from the Democratic presidential candidate race), the activity level of prediction market platforms is rising.
• Weakness in the cryptocurrency market. The recent underwhelming performance of the cryptocurrency market may also be a significant reason for the increase in trading volume and TVL in prediction markets. After all, when the downturn of mainstream tokens like Bitcoin and Ethereum exceeds their upturns, the prediction market, which resembles "binary options" with "buy high or low" and "win or lose" bets, may be more appealing to stablecoin holders than high-leverage gambling-like contracts.
• Celebrity and institutional endorsements. 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." He also pointed out: "What was once a fringe sci-fi idea to change the flow of information has now become the new normal, as millions of people have become accustomed to relying on Polymarket predictions as a source of facts to understand what is happening in the world."
• Traditional prediction channels failing. Taking the U.S. presidential election-related betting activities as an example, traditional prediction channels such as pundits and polls have exposed shortcomings such as poor timeliness, small sample sizes, and vague prediction standards amid a series of dizzying twists like Trump's conviction, Trump's assassination attempt, Biden's withdrawal, and Harris becoming the new Democratic candidate. In contrast, the crypto prediction market, which allows for "real money betting," offers advantages in sensitivity, representativeness, and result certainty, making it the preferred choice for an increasing number of people.

In terms of "using betting predictions as news direction," the crypto prediction market undoubtedly occupies a favorable position.

Thus, with PolyMarket leading the way, other prediction market protocol platforms are also eager to compete.

Top 5 Crypto Prediction Markets: Each with Strengths and Weaknesses

Due to space limitations, we will provide a brief introduction to currently representative crypto prediction market projects for readers and relevant users' reference.

Azuro: A Betting Protocol Supported by Liquidity Pools

As a betting protocol supported by liquidity pools, Azuro differs from PolyMarket in that the former is a foundational protocol for creating on-chain prediction markets, including on-chain smart contracts and web components, allowing users to create multiple prediction market DApps based on Azuro; whereas the latter is more like a fully functional front-end platform.

According to Dune data, the current trading volume supported by the Azuro protocol has reached $204 million, with 5.814 million transactions and 30,900 users. Additionally, according to the official Dune data dashboard, the total TVL of the Azuro protocol is $9.132 million, with a total of 34 applications.

Furthermore, Azuro has issued the token AZUR, which, according to Coingecko data, is currently priced at around $0.086, with a market cap of $13.11 million, having fallen over 60% from its peak price of $0.2396 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 funding round, with investors including SevenX Ventures, Fenbushi Capital, Arrington Capital, Polymorphic Capital, Red Beard Ventures, Dewhales, and G1 Ventures.

AZUR token information interface

BET: A 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, with the first prediction market focused on the U.S. elections. More market categories will be introduced in the future, covering sports (F1, CryptoFightNight), cryptocurrencies, and culture (Solana debate results). The introductory article began with the title "Why be (B)ullish on (E)very(T)hing on Drift?" playing on an acrostic.

Shortly after its launch, Solana Floor reported that the platform attracted liquidity amounting to $3 million at one point.

According to Dune data, the platform currently has a total trading volume exceeding $24.78 million, with a total of 6,872 transactions and 1,027 users. While there is still a significant gap compared to industry leaders, considering that the current open version is in Alpha, it mainly focuses on political betting activities, and its future potential remains promising.

BET platform Alpha version page

SX Bet: A Betting Platform Focused on Sports

Founded in 2019 and built on the Ethereum ecosystem, this platform claims to be "the largest sports betting platform in the world," primarily focusing on betting on the final winners of major events such as tennis, football, baseball, and basketball. Recently, its betting section has also added Crypto, Degen Crypto, and politics, with bets related to the price trends of mainstream crypto assets and on-chain meme coins, as well as the winners of the U.S. elections. It is understood that this project has received support from investment institutions such as Nascent, Hack VC, and CMCC Global.

Unlike prediction markets like PolyMarket, SX Bet resembles traditional sports betting, only supporting single bets, and users cannot freely trade their bets until the outcome of the predicted event is determined, thus they cannot exit the betting activity midway to lock in profits like on PolyMarket.

The platform's innovation lies in its implementation of a combination betting system, where users make predictions on a series of events and can only access the larger prize pool if all predictions are correct, which can be seen as a "leveraged prediction market" to some extent.

Additionally, according to its official website, its payment channels support traditional payment tools and crypto deposit methods, making it relatively user-friendly. On-chain information shows that the SX Bet platform token SX is currently priced at around $0.055, with a market cap of approximately $7.48 million.

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 "cautionary tale"—despite Polygon supporting the project with a $1 million incentive program in 2021, as a prediction platform, it has not attracted more liquidity, leading to its "slow death."

The last tweet from its official account @AugurProject was on November 18, 2021, when the project announced it would introduce AugurDAO, collaborating with the decentralized autonomous organization DXdao, which manages the prediction market Omen, and using the DXdao structure to build AugurDAO, with governance driven by REP v2 holders, but the final outcome was naturally disappointing.

Currently, the project token REP has nearly reached 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 sparked significant attention in the U.S. election year, it has also faced numerous criticisms, one of which is the "market creation mechanism" that still requires centralized platform review. In contrast, Swaye may be a more appealing option for many.

On one hand, Swaye attempts to combine prediction markets with meme coins, allowing early users not only to bet on specific outcomes but also to have more motivation to spread the word since betting activities help increase LP gains and losses; on the other hand, Swaye has also integrated the Farcaster social protocol, making it easier for users to share predictions through social dynamics, thus providing the potential for viral spread.

According to its official website leaderboard interface, despite having less liquidity, the top trader still achieved over 112% returns. Given time, meme coins may become an indispensable part of prediction markets.

Official website interface

Conclusion: The Crypto Prediction Market Has Not Yet Reached Its Final Moment, AI Prediction Markets May Become the Next Stronghold

Recently, at the 2024 Korea Blockchain Week event, Ethereum co-founder Vitalik Buterin stated that artificial intelligence and prediction market technology could accelerate the generation of community notes on the social media platform X (Odaily Planet Daily notes: Community notes is a feature on 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 "do not appear quickly enough," which may mislead some users with inaccurate information before the notes appear, and prediction markets could be a solution to this problem.

The previously regulated prediction market platform Kalshi also recently won a lawsuit against the CFTC, allowing it to launch predictions for the U.S. elections. Although the platform only operates in the U.S. and settles transactions in ordinary dollars, this is enough to be seen as a significant positive for prediction markets.

In comparison to the traditional betting market, which often has a market size of several hundred billion dollars, we have reason to judge that the crypto prediction market has not yet reached its final moment, and PolyMarket is not invincible. With the rapid development of AI now and in the near future, AI prediction markets may become the next "development stronghold" in the cryptocurrency industry.