I actively participated in the prediction market this election cycle on Predict-It. I didn't know anything about the Ethereum applications so this was an insigh

I actively participated in the prediction market this election cycle on Predict-It. I didn't know anything about the Ethereum applications so this was an insightful read. My main takeaway from this whole election cycle was that the betting markets were not that great at predicting the outcome. As the article points out, and I agree with, a big reason is just that these markets are underdeveloped. You have to really be interested in politics or gambling to get involved and the transactions costs are high. Because of this you end up with a mix of die-hard partisans and gamblers looking for an edge. No normal people are participating on these sites. In fact the markets on predictit were sometimes comically wrong because of partisan money. As the author mentions there were contracts trading at 15 cents for Trump to win states after he had already lost them. I bought the NO contracts for 85 cents and made good money on that. For quite a while on predictit there was a persistent pro Trump bias to almost every state level contract. It persisted even after the count was over! The second reason is that the betting markets themselves were just a reflection of polling data. I'm sure some sophisticated people were using other sources to make bets but most of the predictit discussions were just about polling and how to weight certain polls. There didn't seem to be some big insight that analysts like Nate Silver had missed that the prediction market sniffed out. In the interest of full disclosure I fall into both the partisan and gambling camps. I wanted Biden to win but knowing that I avoided contracts that were political since I knew I would bias myself. I went instead for proxy contracts where pricing was out of whack. I settled on the total vote count: https://www.predictit.org/markets/detail/6882 https://www.predictit.org/markets/detail/6882 Each bracket has a 3 million vote range and about a month out from the election I saw that the higher range contracts were underpriced. For some reason the predictit market had concentrated the betting around the 2016 vote total which made no sense to me. I knew this was going to be a big turnout (even more partisan than 2016 and everyone was at home with covid). At the very least it was going to be more than 2016. The prices were so low on the contracts I just bought all of them above the 2016 numbers with a bias to the upside and it worked out quite well. It was a fun game but I didn't think it gave me much more insight into the final result.