Polymarket and BET are two crypto prediction markets that are receiving a lot of attention. Each uses blockchain technology to provide unique features and user experiences. Polymarket has collected more than $750 million in bets on the US elections this year, while newcomer BET has acquired around $22 million since launching this month.
How do Polymarket and BET work?
Polymarket runs on the Ethereum blockchain and uses Polygon as a Layer-2 scaling solution to improve scalability and reduce transaction costs. This setup allows Polymarket to efficiently handle a large number of transactions without burdening the Ethereum network or paying high gas fees.
The platform primarily features binary outcome markets, where users can bet on “Yes” or “No” outcomes for various events through a continuous double auction model. Alternatively, markets can be created for multiple outcomes, such as betting on which terms will be used during a political speech. This model allows for dynamic price discovery, where prices represent the probability of an event occurring.
Notably, Polymarket does not require users to own a native platform token, and it supports self-custodial wallets, improving user security and control over funds. The platform also encourages liquidity and participation through various reward mechanisms, including liquidity provider rewards and market-specific incentives.
On the other hand, BET is a Solana-based prediction market platform launched by Drift Protocol. It benefits from Solana’s high transaction throughput and low fees, making it an attractive choice for decentralized applications. BET allows users to make event-based predictions by purchasing YES or NO shares on the outcomes of real-world events. The platform also offers structured betting, allowing users to implement complex trading strategies.
Differentiating asset collateral and gambling mechanisms
Polymarket’s auction system enables dynamic price discovery by displaying the probability of an event. For example, if ‘Yes’ stock is trading at $0.72 before an event, this indicates a 72% probability of that outcome. Users can trade their positions at any time before the market has developed, increasing flexibility and liquidity. Polymarket requires users to deposit USDC into their wallets, and the platform does not need to maintain a native token, simplifying the user experience.
BET, on the other hand, supports more than 30 cryptocurrencies as collateral, including USDC and SOL, giving users significant flexibility. BET also integrates yield generation through Drift’s lending/borrowing platform, allowing users to earn interest on their collateral while waiting for the outcome of the event. This feature, combined with structured betting that allows users to implement complex trading strategies, sets BET apart in the prediction market landscape.
Polymarket focuses on simplicity and user accessibility by using USDC as its primary currency, eliminating the need for a native token. This approach reduces barriers to entry and improves user security through self-custodial wallets. Polymarket encourages liquidity and participation with various reward mechanisms, including liquidity provider rewards and market-specific incentives, promoting a healthy trading environment.
Conversely, BET offers a more complex financial ecosystem with multiple collateral options and yield generation opportunities. The platform’s FUEL rewards program further drives user engagement by distributing tokens based on trading volume, which can be redeemed within the Drift and Solana ecosystem. BET’s financial structure and high transaction throughput on Solana provide a fast and efficient trading experience, appealing to users looking for flexibility and additional financial incentives.
Polymarket and BET respond to different user needs. Polymarket emphasizes simplicity and decentralized resolution, while BET offers flexibility and return opportunities through its diverse collateral options and integration with the Drift platform.
Resolution tools for prediction markets
Polymarket and BET use different resolution mechanisms to determine the outcomes of their prediction markets, reflecting their different approaches to decentralization and governance.
Polymarket uses UMA’s Optimistic Oracle, a decentralized and reliable system, to solve market outcomes. This mechanism integrates real-world data into smart contracts, which is essential for determining the outcomes of various bets. When a market is created, a resolution request is automatically sent to the Optimistic Oracle.
Applicants within the UMA system shall submit responses to this request, supported by a bond. If the proposed answer is not challenged, it is accepted after a challenge period, usually two hours. In case of disputes, the system resets the question and makes a new request to ensure that trivial disagreements do not get in the way of resolution. Persistent disputes escalate to UMA’s Data Verification Mechanism (DVM), where UMA token holders vote on the appropriate outcome, usually resolved within 48 to 72 hours. This process illustrates Polymarket’s commitment to a community-driven and transparent solution system.
BET resolves its markets through a structured process managed by a security council and an elected multisig under government administration. At the specified resolution time, the Security Council updates the oracle with a binary outcome (0 or 1), representing the outcome of the event. After this update, the market will set an expiration date, after which it will go into a ‘reduce only’ mode, preventing new positions from being opened or existing positions being increased.
The market is settled based on the oracle’s outcome, and users can then settle their positions at the set settlement price. In a shortfall, where the market does not have sufficient resources to cover all positions, the shortfall is socialized into the settlement price, potentially reducing the payout even if the resolution is set to 1. This structured approach ensures fairness and transparency, with mechanisms in place to deal with potential issues. financial shortages.
Thus, Polymarket emphasizes decentralization and community involvement through the oracle of UMA, while BET focuses on structured governance and security council oversight to ensure accurate and fair market outcomes.
Incentives and reward systems for users
Polymarket encourages user engagement through various reward mechanisms designed to improve liquidity and participation. One of the main incentives is the liquidity provider rewards program, which encourages users to place resting limit orders near the midpoint of the market. This program aims to create a balanced and liquid marketplace by rewarding users weekly for maintaining healthy market conditions.
Polymarket occasionally organizes public contests based on profit and loss or trading volume to further stimulate user activity. These incentives, combined with the platform’s use of USDC and self-custodial wallets, make Polymarket an attractive option for users looking for a simple and secure trading experience.
BET offers a different set of incentives through its FUEL rewards program. This program rewards users with FUEL tokens based on their trading volume, which can be redeemed within the Drift and Solana ecosystem for various benefits. BET also offers yield generation opportunities, allowing users to earn interest on their collateral while waiting for the outcome of the event. This feature and the platform’s support for more than 30 cryptocurrencies as collateral provide users with significant flexibility and potential financial benefits. BET’s structured betting feature broadens its appeal by allowing users to implement complex trading strategies, such as taking long positions on prediction markets while shorting Bitcoin.
Summary of Polymarket vs. BET
Polymarket uses Polygon to improve scalability and reduce transaction costs. This setup allows the platform to handle a large number of transactions without taxing the Ethereum network or paying prohibitive gas fees. Polymarket uses UMA’s Optimistic Oracle for market resolution with a commitment to decentralization and community-driven governance. This oracle system ensures fair and transparent market outcomes by integrating real-world data into smart contracts and enabling community voting in case of disputes.
BET benefits from Solana’s high throughput and low cost, making it a fast and efficient platform for decentralized applications. The resolution process involves a security council, an elected multisig under government control, which informs the oracle of the outcome of the event. This structured approach ensures accurate and fair market settlements, with mechanisms to absorb potential financial shortfalls.
Both platforms offer diverse market opportunities, with Polymarket supporting various topics including politics, sports and entertainment. BET will initially focus on political events, but plans to expand into sports and cultural events, expanding its market reach. These differences highlight the platforms’ unique strengths: Polymarket emphasizes simplicity, security and decentralized resolution, while BET offers flexibility, return opportunities and a structured governance model. Users can choose between these platforms based on their preferences for market diversity, financial incentives and technical infrastructure.