Polymarket Faces Major Outflows After US Election Bets Settle

Polymarket, a popular betting platform, has seen a significant drop in its value following the resolution of its largest-ever betting market - the US presidential election.

This event, which had pushed the platform’s total value locked (TVL) to new heights, has now led to a major outflow of funds. Polymarket’s value locked plummeted by nearly 50%, from $511 million on November 6 to just $181 million. Despite offering zero fees and attracting considerable interest, the platform couldn’t prevent the outflows.

The decline in interest mirrors trends seen with other political betting tokens, which lost their appeal once their associated events were settled. Although Polymarket still offers a variety of political bets, these now occur at much lower volumes compared to the surge around the election. The large influx of high-stakes bets, particularly around Donald Trump’s ‘Yes’ token, drove much of the platform’s growth, with some whales contributing up to $70 million. However, with the election settled, sports betting has reclaimed the top spot on Polymarket.

In response to the outflows, Polymarket hinted at an upcoming airdrop, though it failed to halt the cash-outs, especially from the platform’s larger investors. The airdrop, which has been anticipated for some time, might target both small and large bettors, with the potential requirement to hold liquidity on the platform. The full criteria for the airdrop remain unclear, but it is expected that withdrawing earnings may disqualify some users.

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Following the election, Polymarket’s activity has reverted to levels seen before the market surge in October. The once active user base has dwindled, with daily trader counts returning to early October figures. The platform’s largest traders, particularly whales, have already reaped their rewards. One notable trader, Theo4, a French investor, earned over $47 million, making one last bet on Kamala Harris’s popular vote outcome before the market’s resolution.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.