Crunching numbers in prediction markets. Betting against the herd.
Joined April 2024
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Polymarket is ratting out hundreds of traders a day to the FBI.
The days of the "truth machine" are far behind.
They just created their own 16 person team led by a former FBI agent (Shana Bautista) to track midterms insiders.
The team doesn't just monitor your trades. They collect and cross-references:
- Social media accounts and posts
- Data from banking partners
- Device IDs linking multiple wallets
they have turned the platform into a Panopticon reporting 100s of "suspects" to regulators every day.
Their team brags about how easily they routinely link wallets to real-world identities.
One of the latest guy they got arrested was a campaign staffer making "thousands of dollars" trading on unreleased polls.
is it really necessary to track every user so aggressively to catch a few guys making $1000 ?
Quant Chad retweeted
I think I've identified the Predict Fun Exploit
The third party responsible for the hack is likely @ApidogHQ & @algolia
Archived dev.predict.fun pages identify Apidog as the documentation platform, with Algolia powering its configured search.
1. predict fun accidentally left their website’s administrative "search index keys" open to the public on an API doc.
2. Using that key, hackers injected 36 fake, poisonous search results (ADT-N-0 to ADT-N-z). Because they mapped to every letter and number, typing any character triggered them.
3. When developers or users searched for anything on the docs site, the database instantly fetched the hacker's fake, infected data.
4. The website used a risky coding method (dangerouslySetInnerHTML) to load search results, blindly running the hacker's hidden script without checking it first.
5. Once the script ran, hackers could spy on the browser, hijack active sessions, and steal wallet keys or redirect crypto transactions.
🚨 HACK ALTERT : Predictdofun drained for $400,000 of user funds !
User's wallets are being drained and laundered through Tornado Cash.
trader @dethective saw $5,000 disappear from his account.
New victims keep emerging every minute.
Onchain investigator @Naeven_ identified:
- 19 affected wallets
- 105 ETH (~$260K) traced
- Funds bridged from BNB Chain to Ethereum
Stolen assets subsequently forwarded to Tornado Cash
but it's likely an underestimate as predictdotfun themselves report >400,000 USDT in losses.
Predict dot fun is compromised, keep away from it.
Quant Chad retweeted
🚨 HACK ALTERT : Predictdofun drained for $400,000 of user funds !
User's wallets are being drained and laundered through Tornado Cash.
trader @dethective saw $5,000 disappear from his account.
New victims keep emerging every minute.
Onchain investigator @Naeven_ identified:
- 19 affected wallets
- 105 ETH (~$260K) traced
- Funds bridged from BNB Chain to Ethereum
Stolen assets subsequently forwarded to Tornado Cash
but it's likely an underestimate as predictdotfun themselves report >400,000 USDT in losses.
Predict dot fun is compromised, keep away from it.
We are aware of a small number of users who have experienced unauthorized transfers of funds from their wallets, totaling approximately 400,000 USDT.
Our preliminary investigation suggests that our API documentation site, which is hosted by a third-party provider, may have been compromised, potentially affecting a small number of users over a short period of time. The API documentation site has been taken offline as a precaution and will remain offline until our investigation is complete.
At Predict.fun, we take the security of our users and their funds extremely seriously. As such, we will fully reimburse all affected users for any funds lost as a direct result of this incident.
Once our investigation is complete, we will publish a full post-mortem detailing what happened and the steps we're taking to prevent similar incidents in the future.
RT @0xinternetchild: The Ballon d'Or leak was real !
2h before the ceremony, traders discovered an unreferenced article on xitter.cf/iok…
So you quit your job to become an affiliate.
Day one, you open the spreadsheet. Your typical referral is worth 61 cents a year.
And it’s getting worse:
→ The crowd is leaving. New traders: 8,250 a day in March, 1,798 a day in October. Down 78%.
Big traders have halved too.
→ The fees come from whales, and whales already have a deal. Polymarket pays its biggest traders up to half their fees back directly. At that tier, your 20% would leave Polymarket 12 cents on the dollar.
Nobody in that deal needs your link.
→ Land one anyway? 1 in 79 newcomers is a whale. 71% of them aren’t one a month later (leaving).
Median payout since March: $39. Total.
To be fair, Polymarket deserves credit. Sharing revenue with the people who bring it users is the right call.
But it is too late.
Quant Chad retweeted
Points distribution #2 went out today
10000 Points + referral rewards distributed
Come join the fun: polyguana.net/points
Quant Chad retweeted
Surprised by the turn of events in Brazil?
You wouldn’t be if you were watching the odds on Polyguana.
Polyguana aggregates real-time quotes from Hyperliquid, Polymarket, Limitless, and Kalshi, giving you the fastest signals and the best fills in the market.
Trade politics, elections, and global outcomes while earning constant passive yield on your capital + outpace inflation by stacking PolyPoints.
Just $POLY. 🦎📈
Quant Chad retweeted
Polymarket top traders lost >$12.6M betting on Bolsonaro to win the Brazilian presidential election at 82% odds.
why did they get it so wrong ?
Because they convinced themselves that they knew better than polls
📅 October 4 - Bolsonaro upset in the 1st round
The first-round results drop :
Bolsonaro: 47.03%
Lula: 45.16%
Bolsonaro overperforms the previous polls by+5 points.
Polymarket traders are gain confidence that the polls overestimate Lula.
Polymarket odds : Bolsonaro: 84%, Lula: 16%
📅 October 23 - Traders ignore the contradictory polls
Datafolha's new poll drom for final round shows a statistical tie:
- Bolsonaro: 50%
- Lula: 50%
Yet Polymarket barely reacts.
Traders are confident in that the polls again underestimate Bolsonaro.
📅 October 25 - Election day : the polls were right
Bolsonaro enters election day as the overwhelming favorite.
Polymarket odds at 2:45 PM: Bolsonaro: 82%, Lula: 19%
But then we got the final election result:
- Lula: 51.79%
- Bolsonaro: 48.21%
Turns out Datafolha's poll showing 50-50 results was actually underestimating Lula.
That's why you must always stay flexible in Prediction Markets.
Quant Chad retweeted
0.3% of wallet generate 70% of Polymarket's volume.
that's only 10k wallets out of 3.2M.
Whales are carrying the platform.
The concentration is INSANE:
- Top 0.3% of wallets: 70% total volume
- Top 1%: 80.3%
- Remaining 99%: 19.7%
But trading profits are even more concentrated:
- Top 100: 28.6% of all profits
- Top 1,000: 55%
- Top 10,000: 79.4%
So if you are not in these 10k (0.3%) you probably have a negative PnL
And that's how things are supposed to work.
It's the basic economic cycle of a trading platform :
The platform attract retails -> retail attract whales -> whales create volume -> volume entails fees for the platform.
So if you ever ask yourself why Polymarket (or any other platform) tend to resolve controversial markets in favor of whales.
Remember that you are not the one making them money, whales are.
0.3% of wallet generate 70% of Polymarket's volume.
that's only 10k wallets out of 3.2M.
Whales are carrying the platform.
The concentration is INSANE:
- Top 0.3% of wallets: 70% total volume
- Top 1%: 80.3%
- Remaining 99%: 19.7%
But trading profits are even more concentrated:
- Top 100: 28.6% of all profits
- Top 1,000: 55%
- Top 10,000: 79.4%
So if you are not in these 10k (0.3%) you probably have a negative PnL
And that's how things are supposed to work.
It's the basic economic cycle of a trading platform :
The platform attract retails -> retail attract whales -> whales create volume -> volume entails fees for the platform.
So if you ever ask yourself why Polymarket (or any other platform) tend to resolve controversial markets in favor of whales.
Remember that you are not the one making them money, whales are.
Quant Chad retweeted
Will there be a new frontier AI model this month?
Claude Fable 5.5 or GPT Terra?
Grok 4.8 - maybe?
Best odds on the AI Race from
@Kalshi @Polymarket @trylimitless and @HyperliquidX
Just $POLY
Quant Chad retweeted
Leverage for Prediction Markets will never be big.
At best it's a niche product.
Each dot is a type of Polymarket trader with 5x leverage, priced so the lender breaks even. Further right = more of them end up better off. Higher = the lender makes money on them. Bigger = more of the volume.
No group reaches 50%. In every one, most traders end up worse off with leverage than without.
Now look at the two dots furthest right, pros and sports bettors. Both are below zero: the lender loses money on them.
The highest dots? Retail and bonders, the people who want leverage most and get hurt by it.
And the giant dot is whales, almost three-quarters of all the money. They're sitting on cash. They don't need a loan.
So it loses money on the traders it helps and makes money on the ones it hurts. That's a niche, not a market.
The audience for leverage is thin / no in the market yet.
Full case study in comments
Quant Chad retweeted
The CFTC is cracking down on Sports prediction markets.
It just banned exchanges from proposing new type of sports contracts.
Looks like regulator are tying to slowly choke out sports markets
The CFTC contacted @Novig and @ProphetX and ordered them to take down the following markets :
- Who scores the 1st points in a basketball game?
- Will any NFL end with a final score never seen before?
- Will an MLB game produce a never-before-seen score?
- Who will score the 1st point in a Football game?
They argue that these categories are prone to manipulaton.
If you remember it's the same argument that they used to force Kalshi to ban Sports mention markets
Regulations are dropping at an increasing rate :
- July: CFTC forces Kalshi to ban bets on sport mention.
- September: The CFTC send a warning about "manipulation risks" in mention markets in general
- October (Now): The CFTC bans first goal and scorigami markets
---- next ----
- The CFTC bans mention markets ?
- The CFTC drops sports market entirely (reclassied as gambling) ?
Is the Trump admin starting to turn against prediction markets ? Or is the CFTC just trying to hedge their bets for when Democrats come to power ?
Leverage for Prediction Markets will never be big.
At best it's a niche product.
Each dot is a type of Polymarket trader with 5x leverage, priced so the lender breaks even. Further right = more of them end up better off. Higher = the lender makes money on them. Bigger = more of the volume.
No group reaches 50%. In every one, most traders end up worse off with leverage than without.
Now look at the two dots furthest right, pros and sports bettors. Both are below zero: the lender loses money on them.
The highest dots? Retail and bonders, the people who want leverage most and get hurt by it.
And the giant dot is whales, almost three-quarters of all the money. They're sitting on cash. They don't need a loan.
So it loses money on the traders it helps and makes money on the ones it hurts. That's a niche, not a market.
The audience for leverage is thin / no in the market yet.
Full case study in comments
Quant Chad retweeted
The real question: is W. Legate actually loyal to anyone?
> Become a Thiel Fellow
> Start as a left-wing Democrat bashing Trump
> Found a pillow startup Lose your co-founder
> Pivot to conservative and join Kalshi
> Jump ship from Kalshi to Polymarket
> Pump shady influencer campaigns for growth
> Go full Republican retweeting racist posts
Say what you want about Legate. The man wears a lot of hats.
Is he a genius marketer who knows exactly how to adapt and find his place in the sun, or a carefully planted psyop?
What side are you on? | EP. 5
The CFTC is cracking down on Sports prediction markets.
It just banned exchanges from proposing new type of sports contracts.
Looks like regulator are tying to slowly choke out sports markets
The CFTC contacted @Novig and @ProphetX and ordered them to take down the following markets :
- Who scores the 1st points in a basketball game?
- Will any NFL end with a final score never seen before?
- Will an MLB game produce a never-before-seen score?
- Who will score the 1st point in a Football game?
They argue that these categories are prone to manipulaton.
If you remember it's the same argument that they used to force Kalshi to ban Sports mention markets
Regulations are dropping at an increasing rate :
- July: CFTC forces Kalshi to ban bets on sport mention.
- September: The CFTC send a warning about "manipulation risks" in mention markets in general
- October (Now): The CFTC bans first goal and scorigami markets
---- next ----
- The CFTC bans mention markets ?
- The CFTC drops sports market entirely (reclassied as gambling) ?
Is the Trump admin starting to turn against prediction markets ? Or is the CFTC just trying to hedge their bets for when Democrats come to power ?