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Uncovering insiders and alpha on Polymarket with AI

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Re: Uncovering insiders and alpha on Polymarket with AI

#131

Post by hattmall »

kibwen wrote: post #23
conformist wrote: post #20

Earlier quoted context omitted.

By “not terrible” you mean “bad but not very bad” and not “good” right?

"High variance, slightly-negative EV shots on a long time horizon" is a gambling addict's way of justifying the old adage, "sure, we're losing money on each sale, but we'll make up for it in volume!"

Disagree, it's way more like overall our sales are losing money, but the long term plan is to get a buy out.

A strategy that works for a non-trivial amount of startups.

The idea is that if you play incorrectly long enough eventually a bigger better that's more wrong then you will come along.

Re: Uncovering insiders and alpha on Polymarket with AI

#132

Post by airstrike »

alphazard wrote: post #112
w10-1 wrote: post #26

Speculation and concern from a naive observer: Is it polymarket presenting this ability to detect insiders? Or is someone trying to sell the service of detecting insiders to those wanting to know if bets are on equal footing? (or wanting to follow insiders? or wanting to hide your identity by making multiple accounts? Are there per-account fees, when polymarket might encourage people to make multiple accounts?) Regar…

> Regardless, polymarket seems to be on balance corrupting, by monetizing and normalizing use of inside information, This is a common take on "inside information", but for most people this opinion is totally unaligned with their own goals. The people who benefit from "no insider trading" in any market, are a small group of active traders, some institutional, some not. For literally everyone else, insider trading is a…

I'm honestly puzzled by this take.

Clearly the people who benefit from insider trading in any market are those doing the insider trading, not all market participants.

The argument is not that Polymarket et al are "insider trading only" but rather that insider trading in those markets is not regulated so people can get ahead of trades based on confidential information and make a lot of money off of all the suckers gambling their money away on ridiculously frivolous bets.

If you don't see the problem with that, you're complicit, misinformed or brainwashed.

A similar issue is that of market manipulation, since many markets in these platforms can be directly manipulated by participants in manners as easily as spamming some words on an earnings call.

Re: Uncovering insiders and alpha on Polymarket with AI

#133

Post by alphazard »

airstrike wrote: post #132
alphazard wrote: post #112

Earlier quoted context omitted.

> Regardless, polymarket seems to be on balance corrupting, by monetizing and normalizing use of inside information, This is a common take on "inside information", but for most people this opinion is totally unaligned with their own goals. The people who benefit from "no insider trading" in any market, are a small group of active traders, some institutional, some not. For literally everyone else, insider trading is a…

I'm honestly puzzled by this take. Clearly the people who benefit from insider trading in any market are those doing the insider trading, not all market participants. The argument is not that Polymarket et al are "insider trading only " but rather that insider trading in those markets is not regulated so people can get ahead of trades based on confidential information and make a lot of money off of all the suckers ga…

> If you don't see the problem with that, you're complicit, misinformed or brainwashed.

The problem that I imagine you see with this, is that it doesn't conform to a particular, special, notion of fairness that you think the market should have.

Informed parties have an edge over uninformed parties. This edge is "unfair" if you believe the market should be a lottery. The market is designed to pay people with accurate beliefs, by taking from people with inaccurate beliefs. Everyone's belief is valued based on its accuracy, and the market is fair in that sense. Fairness is actually irrelevant to the societal good the market provides, which is to produce accurate prices. A third party, who doesn't participate, shouldn't care about the market being "fair", they should care about it giving good information.

> A similar issue is that of market manipulation, since many markets in these platforms can be directly manipulated by participants in manners as easily as spamming some words on an earnings call.

If you are betting on what a person will say, and the person knows about the market, that is a chaotic system. If you bid the price away from max entropy then you deserve the outcome.

Re: Uncovering insiders and alpha on Polymarket with AI

#134

Post by ses1984 »

raincole wrote: post #73
w10-1 wrote: post #26

Speculation and concern from a naive observer: Is it polymarket presenting this ability to detect insiders? Or is someone trying to sell the service of detecting insiders to those wanting to know if bets are on equal footing? (or wanting to follow insiders? or wanting to hide your identity by making multiple accounts? Are there per-account fees, when polymarket might encourage people to make multiple accounts?) Regar…

I think you might misunderstand the value preposition. Polymarket wants insider trading. That's the whole point. They'll eventually cave in to PR pressure and deviate from the original purpose, though.

Some of the things people bet on can be decided by a single person.

The more accurate the markets get, the greater the incentive for insiders to spoil it.

That doesn’t benefit anyone but the insider and probably has a net negative on everyone else.

Re: Uncovering insiders and alpha on Polymarket with AI

#135

Post by justaj »

When I went to the main article link [0] (which for some reason was linked from a Twitter comment), it said "Page is not supported"

It's also not on archive.org Wayback Machine it seems.

So can anyone please copy and paste the article contents here? Thanks.

0: http://x.com/i/article/2024235288512569344

Re: Uncovering insiders and alpha on Polymarket with AI

#136

Post by rfv6723 »

testaccount28 wrote: post #38
coldtea wrote: post #36

> Prediction markets have been called "truth machines" because anyone who has information missing from the market can profit. That sounds like "insider trading" machines, or "scam" machines, rather than truth machines.

yes, they allow you to pay people who have information about the future for that information, in a distributed manner. this is great if, like many people, you want information about the future.

Historical records, notably by Herodotus, confirm that the Persian Empire used gold to bribe Greek Oracles, turning "divine prophecy" into a psychological warfare tool.

This mirrors a core flaw in Polymarket: profit maximization is not truth-seeking. Just as Persian bribes manipulated ancient morale, modern "whales" can distort market odds to manufacture narratives or hedge external interests. In both cases, the prediction is a commodity sold to the highest bidder rather than an objective forecast of reality.

Re: Uncovering insiders and alpha on Polymarket with AI

#137

Post by MrMan »

chii wrote: post #69
0x3f wrote: post #50

Earlier quoted context omitted.

If I'm an insider with 100% confidence, I'll take all offers at a certain price as long as I can afford it. Similar story for lower levels of confidence (but still inside info). There won't necessarily be any left for you to copy at a viable price.

> Similar story for lower levels of confidence therefore, the polymarket betting odds will reflect the truth - even if that info is a secret that nobody else but the insider knows. And if this is the case, then even an outsider could make use of the odds as a source of info which would ensure that market efficiency (which is about the flow of information) is high. So what's wrong with insider trading again?

[dead]

Re: Uncovering insiders and alpha on Polymarket with AI

#138

Post by Lu2025 »

w10-1 wrote: post #26

Speculation and concern from a naive observer: Is it polymarket presenting this ability to detect insiders? Or is someone trying to sell the service of detecting insiders to those wanting to know if bets are on equal footing? (or wanting to follow insiders? or wanting to hide your identity by making multiple accounts? Are there per-account fees, when polymarket might encourage people to make multiple accounts?) Regar…

Yep it's rotten. I think the intuitive revulsion many feel toward the Polymarket is simply due to the unfairness of it.

Re: Uncovering insiders and alpha on Polymarket with AI

#139

Post by hattmall »

throwaway-99482 wrote: post #61
syntaxing wrote: post #8

Isn’t this the motivation behind polymarket? To incentivize those that have information to bet as a signal of “truth”. What I don’t get is why would anyone bet on this stuff that don’t have insider information besides those with gambling addiction.

It is for people like me. I'm usually right about things before other people even know about them. Bought BTC in 2011, ETH in 2014 (funded the IPO), Tesla in 2013, Microsoft right when they replaced Ballmer (at $30 I think), Nvidia on the Covid crash day in 2020, learned Rust in 2017, took AI seriously two weeks after ChatGPT 3.5 launched. I never had any insider information. I typically have a good feeling for thing…

Great! So how do I follow your moves? Ideally the prediction market would have a way where traders like this filter to the top, but then making that information known would impact the market itself.!.!.

Re: Uncovering insiders and alpha on Polymarket with AI

#140

Post by cowthulhu »

Lu2025 wrote: post #138
w10-1 wrote: post #26

Speculation and concern from a naive observer: Is it polymarket presenting this ability to detect insiders? Or is someone trying to sell the service of detecting insiders to those wanting to know if bets are on equal footing? (or wanting to follow insiders? or wanting to hide your identity by making multiple accounts? Are there per-account fees, when polymarket might encourage people to make multiple accounts?) Regar…

Yep it's rotten. I think the intuitive revulsion many feel toward the Polymarket is simply due to the unfairness of it.

Prediction markets should be accurate, not fair. If people want to gamble without doing the work of finding some alpha, they should head to a casino, not a prediction market.
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