More than half of all 'long shot' bets on Polymarket pay off

Source: Ars Technica

Kalshi vs Polymarket

Kalshi, Polymarket’s major rival, has heavily promoted its own efforts—including a partnership with market‑surveillance company Solidus Labs—as it seeks to distance itself from Polymarket and emphasize its credentials as the largest regulated platform in the US.

• Kalshi’s restrictions: bans “violent markets, including war and kidnapping,” though it does allow markets on the closure of the Strait of Hormuz. It requires proof of identity and states that markets should “not incentivize harm.”
• Polymarket’s approach: does not require most users of its international site to provide proof of identity and permits payments via anonymous cryptocurrency channels.

Start‑ups offering copy‑trading tools

Growing scrutiny has created a business opportunity for a wave of start‑ups selling tools to help users profit by copying suspected “insiders.”

“The platforms are creating new rules to try to root them out and make it clear they don’t allow that activity. That to me … proves there is some informed flow in these markets worth following,” said Matt Saincome, chief executive of financial data provider Unusual Whales, which sells a $20‑a‑month “unusual predictions” tool to monitor suspicious bets on Polymarket.

Other notable start‑ups

• Polywhaler – offers real‑time monitoring of large bets for $4.99 a month.

Polymarket’s own copy‑trading resources

Polymarket has published a list of the 10 most‑copied wallets in a blog post, providing recommendations on strategies to follow and pitfalls to avoid when copy‑trading.

Study on prediction‑market wisdom

Both Polymarket and Kalshi have long argued that their platforms harness collective wisdom to accurately forecast events. However, a recent study suggests that prediction markets reflect the “wisdom of an informed minority” rather than the “wisdom of crowds.”

• Key findings:
  • Only 3 percent of all accounts generate the bulk of price discovery.
  • Research led by Roberto Gómez Cram, assistant professor of finance at the London School of Economics, identified these traders as the ones who predict prices and react quickly to breaking news, improving outcome accuracy—particularly on Polymarket, the platform studied.
  • The remaining accounts “do not produce wisdom” and are more likely to lose money; they provide volume but little information, with their losses flowing as profits to the informed minority.

Source: Financial Times.