Polymarket, the fast-growing prediction market known
for its event-driven trading, is outperforming most decentralized finance
(DeFi) projects in keeping users active, and the data explaining this trend
sheds light on a critical challenge facing the broader industry.
A recent analysis by Dune and Keyrock examined user
retention across 275 crypto platforms, including wallets, DeFi protocols, and
exchanges. The results show that Polymarket maintained stronger month-to-month
user activity than 85% of them. In a sector where trading activity often evaporates
once volatility fades, this level of consistency stands out.
For prediction markets like Polymarket, retention
grows organically through a structure tied to real-world events—political
elections, sports outcomes, or economic indicators, that constantly reset the
trading narrative.
Real-World Triggers Keep Users Coming Back
Unlike standard crypto platforms, prediction markets
thrive on the news cycle itself. Each headline, from an election poll shift to
an inflation report, creates new opportunities for participation.
Exchanges like Coinbase and Gemini, wallet provider
Phantom, and clearing firm Bitnomial have each announced moves into the
prediction market space over the last quarter. Coinbase plans to integrate
tokenized equities and event markets, while Gemini recently launched a
nationwide prediction market product aimed at becoming an all-in-one app for
digital finance.
Meanwhile, Bitnomial secured regulatory clearance from
the U.S. Commodity Futures Trading Commission (CFTC) to operate and clear
prediction markets, an approval that could signal broader institutional
recognition for the sector.
The numbers reveal the scale of this momentum. Since
early 2024, monthly notional volume across prediction markets has leapt from
under $100 million to more than $13 billion—a 130-fold increase. Active users
grew from just 4,000 to over 600,000, with transactions surging to 43 million.
Polymarket’s mix of trading categories also shows a
clear evolution. In 2025, the platform’s volume was split across sports (39%),
politics (34%), and crypto (18%), contrasting sharply with Kalshi’s
sports-heavy profile, where 85% of volume remains tied to athletic events.
Accuracy Adds to the Appeal
Prediction markets are not only expanding, they are
also proving impressively accurate. Platforms like Polymarket and Kalshi
achieve Brier scores near 0.09, outperforming expert polls and even
sophisticated economic models.
Polymarket’s event outcomes align correctly about
90–95% of the time, and accuracy continues improving with deeper liquidity. Such
precision has turned them into informal barometers of macroeconomic and
political sentiment.
Key data suggests these markets anticipate shifts
faster than traditional forecasts, Kalshi’s inflation contracts, for instance,
react 4.3 times less erratically than the Cleveland FedNow model.
This article was written by Jared Kirui at www.financemagnates.com.
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