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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

#171

Post by testaccount28 »

rfv6723 wrote: post #142
testaccount28 wrote: post #141

Earlier quoted context omitted.

and newspapers are owned by fatcats. but we are still interested in what they have to say.

This comparison is flawed because accountability creates a structural divide. A newspaper has a visible masthead and named editors, creating a reputational stake where consistent bias leads to institutional ruin. In contrast, Polymarket relies on pseudonymous liquidity. A "whale" can use a "Persian bribe" to distort odds and then vanish without consequence. While a newspaper offers a testable argument, Polymarket pro…

> objective probability.

i don't believe such a concept exists. if you do, then you have greater epistemic problems that should be resolved first, before reading either the newspaper, or the prediction market.

Re: Uncovering insiders and alpha on Polymarket with AI

#172

Post by rfv6723 »

testaccount28 wrote: post #171
rfv6723 wrote: post #142

Earlier quoted context omitted.

This comparison is flawed because accountability creates a structural divide. A newspaper has a visible masthead and named editors, creating a reputational stake where consistent bias leads to institutional ruin. In contrast, Polymarket relies on pseudonymous liquidity. A "whale" can use a "Persian bribe" to distort odds and then vanish without consequence. While a newspaper offers a testable argument, Polymarket pro…

> objective probability. i don't believe such a concept exists. if you do, then you have greater epistemic problems that should be resolved first, before reading either the newspaper, or the prediction market.

Dismissing "objective probability" is a convenient philosophical retreat that strips Polymarket of its only legitimate function. If the market isn’t an attempt to aggregate information toward a binary, external "ground truth," then it isn't a forecasting tool—it’s a "Keynesian Beauty Contest" where people bet on what they think others believe rather than what will actually happen.

Without an objective anchor to measure against, concepts like "mispricing" or "alpha" become logically impossible; you cannot have a "wrong" price if you don't believe a "right" probability exists. If we accept that the market signal is just a reflection of whale liquidity and "Persian bribes" rather than a calculated proximity to reality, then the platform is merely a math-washed gambling hall. Ultimately, a prediction market that abandons the pursuit of objective truth loses its epistemic utility and its entire reason to exist.

Re: Uncovering insiders and alpha on Polymarket with AI

#173

Post by testaccount28 »

rfv6723 wrote: post #172
testaccount28 wrote: post #171

Earlier quoted context omitted.

> objective probability. i don't believe such a concept exists. if you do, then you have greater epistemic problems that should be resolved first, before reading either the newspaper, or the prediction market.

Dismissing "objective probability" is a convenient philosophical retreat that strips Polymarket of its only legitimate function. If the market isn’t an attempt to aggregate information toward a binary, external "ground truth," then it isn't a forecasting tool—it’s a "Keynesian Beauty Contest" where people bet on what they think others believe rather than what will actually happen. Without an objective anchor to measu…

prediction markets are a useful tool for aggregating information about uncertain events.

Re: Uncovering insiders and alpha on Polymarket with AI

#174

Post by fsckboy »

airstrike wrote: post #157
fsckboy wrote: post #152

Earlier quoted context omitted.

> But when there's a public prediction market, the only benefit is to the insiders. false. all the conclusions economists draw in microeconomic theory about efficient markets are based on pricing that reflects symmetric information. secrets are asymmetric. trading on inside information drives the market price in the direction it should be moving, making the market more efficient, a benefit to all participants in the…

We're not solving for efficient pricing at the expense of one insider reaping all the benefits because they already either knew or set the price before hand.

if you have no knowledge of any inside information and you are trying to make a buy/sell investment decision, your decision benefits from the price being as accurate as possible. That is what every individual is "trying to solve" so it's a net benefit.

Re: Uncovering insiders and alpha on Polymarket with AI

#175

Post by airstrike »

fsckboy wrote: post #174
airstrike wrote: post #157

Earlier quoted context omitted.

We're not solving for efficient pricing at the expense of one insider reaping all the benefits because they already either knew or set the price before hand.

if you have no knowledge of any inside information and you are trying to make a buy/sell investment decision, your decision benefits from the price being as accurate as possible. That is what every individual is "trying to solve" so it's a net benefit.

except there is nothing to buy/sell here other than the prediction itself.

Or do you also think it would make sense, in a hypothetical scenario, to buy options on a stock price that is already known by some in advance? There’s a reason you’re not allowed to trade on insider information. You’re totally missing the point here.

Re: Uncovering insiders and alpha on Polymarket with AI

#176

Post by sharp_runner_84 »

The real alpha on Polymarket isn't in trying to predict events better than the market -- it's in the market microstructure. Price discrepancies between Kalshi and Polymarket on the same event can persist for minutes because the two venues have different participant bases and settlement rules. Kalshi is USD-settled with KYC, Polymarket is USDC on Polygon with pseudonymous wallets. And because Polymarket's CLOB runs on-chain, you can literally watch competing bots' strategies by tracing their contract interactions.
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