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No, incentives aim for whatever gives a return - not an objective neutral verdict-of-the-crowd. It requires a regulator to be active. Read about the whale trad
by smcin 1y ago
No, incentives aim for whatever gives a return - not an objective neutral verdict-of-the-crowd.
It requires a regulator to be active.
Read about the whale trades and wash trades on Polymarket: https://news.ycombinator.com/item?id=41999743 https://news.ycombinator.com/item?id=41999743
- Karrot_Kream 1y agoYes the incentive alignment is what I was referring to when I mentioned that prediction markets have their own issues. I'm not convinced wash trading is a huge problem as it's mostly about generating fake volume. The particular linked example is bad too because Trump did end up winning the election.
- smcin 1y agoI said Polymarket doesn't give an objective neutral verdict-of-the-crowd at some moments, since their markets are still fairly small and can be moved short-term by whale trades. An example is how volatile their markets are on Fed rate decisions; sometimes you see serious short-term disagreement or contrarianism between individual markets: https://polymarket.com/event/how-many-fed-rate-cuts-in-2025 https://polymarket.com/event/how-many-fed-rate-cuts-in-2025 https://polymarket.com/event/fed-decision-in-october https://polymarket.com/event/fed-decision-in-october https://polymarket.com/event/fed-decision-in-december https://polymarket.com/event/fed-decision-in-december