There are also gas fees which dramatize this effect, but this is a very important point. A prediction market price gives rise to a function from interest rates to probability ranges for which a rational investor would not bet on the market if they had a probability in that range. The larger the interest rate or the farther out the market, the bigger the range.
Probably an easy widget to make: something that takes as input the polymarket price, gas fees, and interest rate and spits out this range or probabilities.
There are also gas fees which dramatize this effect, but this is a very important point. A prediction market price gives rise to a function from interest rates to probability ranges for which a rational investor would not bet on the market if they had a probability in that range. The larger the interest rate or the farther out the market, the bigger the range.
Probably an easy widget to make: something that takes as input the polymarket price, gas fees, and interest rate and spits out this range or probabilities.
Polymarket pays for the gas fees themselves, users don’t have to pay any.
That’s incredible.
But how do they profit? They say they don’t profit on middle eastern war markets, so they must be profiting elsewhere somehow
VC money. That disclaimer was misleading, they don’t have fees on any markets.