Polymarket and BET are two cryptocurrency prediction markets that are garnering significant attention. Each leverages blockchain technology to deliver unique features and user experiences. Polymarket has racked up over $750 million in bets on the U.S. election this year, while newcomer BET has acquired around $22 million since its launch 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 high volume of transactions without congesting the Ethereum network or incurring high gas fees.
The platform primarily offers binary outcome markets, where users can bet on “Yes” or “No” outcomes for various events via a continuous double auction model. Alternatively, markets can be created for multiple outcomes, such as betting on the terms that will be used during a political speech. This model provides dynamic price discovery, with prices representing the probability of an event occurring.
Notably, Polymarket does not require users to hold a native platform token and supports self-managed wallets, improving user security and fund control. The platform also incentivizes 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 capitalizes on Solana’s high transaction throughput and low fees, making it an attractive choice for decentralized applications. BET allows users to engage in 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 between asset guarantees and betting mechanisms
Polymarket’s auction system enables dynamic price discovery by representing the probability of an event occurring. For example, if “Yes” shares for an event are trading at $0.72, this indicates a 72% probability of that outcome. Users can trade their positions at any time before the market resolves, improving flexibility and liquidity. Polymarket requires users to deposit USDC into their wallets, and the platform does not require holding a native token, simplifying the user experience.
In contrast, BET supports over 30 cryptocurrencies as collateral, including USDC and SOL, providing users with considerable flexibility. BET also integrates yield generation via Drift’s borrow/lend platform, allowing users to earn interest on their collateral while waiting for event outcomes. This feature, combined with structured bets that allow 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 the primary currency, eliminating the need for a native token. This approach reduces barriers to entry and improves user security through self-managed wallets. Polymarket encourages liquidity and participation with various reward mechanisms, including liquidity provider rewards and market-specific incentives, thereby fostering a healthy trading environment.
Conversely, BET offers a more complex financial ecosystem with multiple collateral options and yield-generating capabilities. The platform’s FUEL rewards program further incentivizes user engagement by distributing tokens based on trading volume, which can be traded 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 seeking flexibility and additional financial incentives.
Polymarket and BET address different user needs. Polymarket focuses on simplicity and decentralized resolution, while BET offers flexibility and yield opportunities through its various collateral options and integration with Drift’s platform.
Resolution tools for prediction markets
Polymarket and BET use distinct 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 trustless system, to resolve 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.
UMA system proposers submit answers to this query supported by a bond. If the proposed answer is not disputed, it is accepted after a dispute period, typically two hours. In the event of a dispute, the system resets the question and issues a new query to ensure that trivial disagreements do not impede resolution. Persistent disputes are escalated to UMA’s Data Verification Mechanism (DVM), where UMA token holders vote on the correct outcome, typically resolved within 48 to 72 hours. This process exemplifies Polymarket’s commitment to a transparent and community-driven resolution system.
BET resolves its markets through a structured process managed by a security council and an elected multisig under the governance of the realms. At the time of the designated resolution, the security council updates the oracle with a binary result (0 or 1), representing the outcome of the event. Following this update, an expiration date is set for the market, after which it enters a “reduction only” mode, preventing new positions from being opened or existing positions from being increased.
The market is settled based on the oracle’s output, and users can then settle their positions at the determined settlement price. In the event of a shortfall, when the market does not have sufficient funds to cover all positions, the shortfall is socialized into the settlement price, potentially reducing the payout even if the resolution was set to 1. This structured approach ensures fairness and transparency, with mechanisms to manage potential financial shortfalls.
Thus, Polymarket emphasizes decentralization and community involvement via the UMA oracle, while BET focuses on structured governance and security council oversight to ensure accurate and fair market outcomes.
Incentive and reward systems for users
Polymarket encourages user engagement through various reward mechanisms designed to improve liquidity and participation. One of its main incentives is the Liquidity Provider Reward Program, which encourages users to place limit orders at rest near the market midpoint. This program aims to create a balanced and liquid market by rewarding users every week who maintain healthy market conditions.
Polymarket occasionally runs public competitions 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-managed 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 across the Drift and Solana ecosystem for various perks. BET also offers yield-earning opportunities, allowing users to earn interest on their collateral while waiting for event outcomes. This feature and the platform’s support for over 30 cryptocurrencies as collateral provide users with significant flexibility and potential financial benefits. BET’s structured betting feature further enhances its appeal by allowing users to implement complex trading strategies, such as going long on prediction markets while shorting Bitcoin.
Polymarket vs BET Summary
Polymarket leverages Polygon to improve scalability and reduce transaction costs. This setup allows the platform to handle high transaction volumes without clogging the Ethereum network or incurring prohibitive gas fees. Polymarket leverages UMA’s Optimistic Oracle for market resolution with a commitment to decentralization and community governance. This oracle system ensures fair and transparent market outcomes by integrating real-world data into smart contracts and enabling community voting in the event of a dispute.
BET capitalizes on Solana’s high throughput and low fees, making it a fast and efficient platform for decentralized applications. Its resolution process involves a security council, a multisig elected under the governance of realms, which updates the oracle with the outcome of the event. This structured approach ensures accurate and fair market resolutions, with mechanisms in place to manage potential financial shortfalls.
Both platforms offer diverse market opportunities, with Polymarket supporting a variety of topics including politics, sports, and entertainment. BET is initially focused on political events, but plans to expand to sports and cultural events, broadening its market reach. These differences highlight the platforms’ unique strengths: Polymarket emphasizes simplicity, security, and decentralized resolution, while BET offers flexibility, yield opportunities, and a structured governance model. Users can choose between these platforms based on their preferences for market diversity, financial incentives, and technical infrastructure.
