The Intersection of Politics and Cryptocurrency: Polymarket and PolitiFi Tokens Analysis
Decentralized Prediction Markets (DPMs) have evolved significantly since their inception, with key projects like Augur and Gnosis laying the groundwork for the ecosystem. The concept of prediction involves three core elements: specific markets, expiration dates, and probability, each contributing to the precision and dynamics of predictions. Early endeavors in DPMs, such as Satoshi Dice on the BTC chain in 2012, paved the way for more sophisticated platforms.
Polymarket, launched in 2018 on the Polygon network, is one such platform that has gained prominence, particularly during the 2020 U.S. presidential election. Vitalik Buterin, Ethereum's co-founder, highlighted the potential of prediction markets in his article "Prediction Markets: Tales from the Election" emphasizing their value within the Ethereum ecosystem.
Polymarket Overview
Ecosystem: Polygon
Launch Date: 2018
Total Raised: $74M
Key Events:
June 16, 2020: Launched the Polymarket Beta out of stealth
October 21, 2020: Raised $4M in Seed round:
Led by Polychain Capital with major participation from AngelList co-founder Naval Ravikant. Other notable investors include Balaji Srinivasan, Meltem Demirors, Robert Leshner, Stani Kulechov, Kain Warwick, ParaFi, 1confirmation, Tarun Chitra, Kal Vepuri, Josh Hannah, Marc Bhargava, Samir Vasavada, and Calvin Liu.
January 1, 2022: Raised $25M in Series A round
Led by General Catalyst
May 14, 2024: Raised $45M in Series B round
Led by Peter Thiel's Founders Fund. Other participants include Ethereum creator Vitalik Buterin, 1confirmation, ParaFi, and Dragonfly Capital.
Core Team:
Founder & CEO: Shayne Coplan
Vice President: David Rosenberg
Head of Market Expansion: Rich Jaycobs
Head of Data: Niraek Jain-Sharma
Strategy Lead: Ethan Singer
In May 2022, Polymarket appointed former CFTC Commissioner J. Christopher Giancarlo as chairman of its advisory board.
Polymarket Outcome Tokens
Contract Address: 0xc395045E577ca2016aFE8b0E938E07a24870cF32
Polymarket outcome tokens are ERC1155 tokens using the Gnosis Conditional Tokens Framework. These tokens are derived from unique conditionIds and ERC20 collateral tokens.
Splitting & Merging: Users can split one unit of collateral (USDC) into binary outcome tokens or merge them back into collateral, maintaining a market price that sums to one unit of collateral.
Regulatory Challenges and Competitors
Polymarket's competitors in decentralized prediction markets include Augur, GnosisDAO, Omen, PlotX, Charm Options, Polars, and Hedgehog.
Polymarket is barred from operating in the U.S. due to a 2022 settlement with the Commodity Futures Trading Commission (CFTC), which fined it $1.4 million for unregistered swaps. This restriction has enabled Kalshi, the only CFTC-regulated prediction market platform settling bets in dollars, to dominate the market.
Furthermore, on May 10, 2024, the CFTC issued a Notice of Proposed Rulemaking to amend regulation 40.11. This proposal defines event contracts involving political contests, war, terrorism, and unlawful acts as gaming, categorizing them as contrary to public interest and prohibiting their listing or clearing by CFTC-registered entities.
Key Metrics (June 27, 2024)
TVL: $36,958,276
Number of Active Wallets in Past 24 Hours: 2,871
Number of Active Wallets in Past 30 Days: 25,930
Number of Trades in Past 24 Hours: 15,306
Number of Trades in Past 30 Days: 269,088
Total Number of Created Markets: 3,824
Political Memes Tokens
As mentioned in the introduction, during the ongoing weeks-long mania surrounding celebrity meme coins, which has also impacted the political scene, the "DJT" token was created a week ago. Initially, it was presented as the official token of former President Donald Trump, leading to a rapid increase in its Market Cap to approximately $300 million. However, doubts arose as 67% of the supply was held in one cluster. Subsequently, Arkham announced a $150K bounty for the identity of the DJT creator, sparking a swift turn of events:
11:49 pm UTC (June 18): ZachXBT replied to Arkham stating that he submitted for the bounty.
11:57 pm UTC: Martin Shkreli panicked and DM'd ZachXBT.
12:27 am UTC: Martin Shkreli created a Twitter Space and announced he was the creator of DJT.
Later, during a Twitter Space with Mario Nawfal, Martin attempted to push the narrative that he created the coin in collaboration with Barron Trump, which was subsequently disputed by several individuals, including the former president. Following this revelation, the "DJT" token's Market Cap dropped to around $100 million. This is, of course, not investment advice; we present this situation to illustrate behaviors in the current market.
Political Memes Tokens - overview
As we can observe in the table below, the vast majority of the largest Political Meme Coins by Market Cap reference Donald Trump. The highest Market Cap is held by the "TRUMP" token, approximately $370 million.
Based on data from the Arkham Intelligence platform, we present an overview of the cryptocurrency portfolio of former President Donald Trump. Please note that this is not an official portfolio, and potential inaccuracies should be considered. Potential scammers can increase interest in a given token by simply sending it to a wallet associated with a notable individual, such as a former president.The majority of the portfolio consists of 579,000 TRUMP tokens valued at $4.87 million. The second largest holding is 210,000 TROG tokens, worth $2.38 million. A significant portion of the capital is also allocated in ETH and WETH, amounting to nearly $3 million.
$TREMP and $BODEN on Solana
Several months ago, two meme coins on Solana, $TREMP and $BODEN, achieved substantial popularity. Based on data from the Dune dashboard created by @pseudocode88_aux, the key metrics for both tokens are presented below.
Conclusion
PolitiFi tokens are an integral part of the speculative mania surrounding meme coins. However, it is important to consider the inherent risks and the relatively small share of the overall market that meme coins represent. With a market cap of just under $50 billion, they hold slightly more than 2% of the entire cryptocurrency market, while political tokens themselves constitute only a small percentage of meme coins. Our primary value is providing unbiased, data-driven insights, facilitated by the transparency of blockchain technology. Therefore, we refrain from commenting on the phenomenon of PolitiFi tokens and the broader topic of meme coins.
Below, you will find a link to the "Solana Meme Token Analyzer" dashboard. By entering a specific contract address, you can analyze the metrics for the respective token. Furthermore, two months ago in our newsletter, we conducted a brief analysis of the Meme Coins Landscape and Scoring Methodologies, offering a different perspective on this market segment.
➡️ Solana Meme Token Analyser
➡️ Memecoins: A Decade of Disruption—What's Next?
Links
Decentralized Prediction Markets by Jianxiong Zhan, Chi Wai Lau, Lawan Rahim, Quoc Le
https://timroughgarden.github.io/fob21/reports/ZLRL.pdf
Sources
https://www.rootdata.com/Projects/detail/Polymarket?k=MTYwNQ%3D%3D
https://flipsidecrypto.xyz/Ario/polymarket-insights-UZ3iq8?tabIndex=1
https://platform.arkhamintelligence.com/explorer/entity/donald-trump
https://dune.com/pseudocode88_aux/solana-meme-tremp-vs-boden
https://mirror.xyz/polymarket.eth/txFHoXVU1QAsXCZQj6H_ag3kXv1QTcnbLVI8cL9CFYg
Risk Disclaimer:
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The content reflects only the writer's views and not financial advice. Please conduct your own due diligence before engaging with cryptocurrencies, DeFi, NFTs, Web 3 or related technologies, as they carry high risks and values can fluctuate significantly.