Polymarket, a prediction market on Polygon, has gained significant traction in key metrics, particularly driven by the 2024 US presidential election. The platform has attracted notable attention and mainstream visibility, making it a unique breakout story in crypto. However, Polymarket faces challenges, including increased competition and its near-term reliance on election markets. There are also questions raised around the sustainability of liquidity on prediction markets. Despite these risks, we think Polymarket’s ability to grow its non-election volumes coupled with its longer-term growth drivers may lead to sustainability. Recent funding, potential innovations, and the increasing financialization of prediction offer promising avenues for future expansion. While Polymarket’s success story is compelling, its ability to navigate the post-election environment and sustain growth amidst rising competition will determine its long-term impact and viability in the prediction market space.
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