Say Hello to Prediction Markets

Prediction markets are coming to dYdX Chain thanks to an integration with Polymarket software!

Let’s take a look at our latest feature drop. 

What is Polymarket? 

Polymarket is a prediction market platform where users can bet on the outcomes of certain real world events. Each market has a “yes” and “no” bet and users can buy whichever side of the bet they think will win. At the end of each event, the market settles to $1 or $0. 

For example, for the Simone Biles Wins All Around Gold market users could buy either the Yes or No share. Since Biles did win all around gold, every Yes share became $1 and every No share became $0. The buy price of each share before settlement is determined by a simple supply and demand model. 

The Limit with Polymarket

While Polymarket opens the door to a whole new way to speculate on real world events, upside is capped. Users can only sell each share for a maximum of $1. While upside could be huge for users who buy the share at $0.01, it doesn’t create a huge opportunity for people with conviction when a market is saturated. 

In comes dYdX Prediction Markets

Prediction markets on dYdX allows users to list and trade eligible Polymarket prediction markets on dYdX Chain which meet sufficient liquidity and technical compatibility requirements.Users can now long or short a market with up to 20x leverage, creating the opportunity for bigger upside (or bigger loss). 

dYdX Chain prediction markets will only track the asset price for the Yes share for any market. This is because longing a market acts as a Yes bet while shorting a market acts as a No bet. 

The software will only support prediction markets on isolated margin and with a maximum of 20x leverage for now. Traders on any community deployment can propose to launch a prediction market in the new market widget shown in the front-end interface. 

Our vision is to make dYdX Chain software as robust as possible and to build the dYdX Chain to be the one-stop shop for all types of on-and-offchain markets. This integration with Polymarket software is dYdX Chain’s first foray into new asset types and we’re super excited to see how it goes!

Source : DYDX - Oct 10, 2024