81–90 of 176 posts
Earlier quoted context omitted.
You can't be sure that they are an insider or lucky, just from onchain data.
If they make single market predictions with high accuracy it is very very likely they are
Earlier quoted context omitted.
If they make single market predictions with high accuracy it is very very likely they are
No vigilant insider is making a series of "single market predictions with high accuracy" on the same account. They would make unlinkable bets on fresh accounts.
There seem to be quite a few non-vigilant insiders. That's the very premise of the post we're discussing.
This is unsurprising to anyone who's seen the various ways people get busted for insider trading in equities.
iirc polymarket doesn't explicitly rule against this, and neither does the law. prediction trading like this operates as "commodities" trading, so they have no obligation to prevent this, and indeed they have an financial incentive to let it continue (assuming others don't leave the platform!)
I don’t think that’s right. Prediction markets fall under CFTC oversight, and the CFTC absolutely has insider trading rules. We just haven’t seen any enforcement yet. Partly because the space is still new, and partly because enforcement priorities have been uneven lately (to put it mildly).
The CFTC has already signaled it’s starting to look more closely at insider trading in prediction markets. It's almost certainly just a matter of time. It's pretty likely a future administration will clamp down on this, if the current one doesn't.
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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.
The examples didn’t look like they’ve completely emptied the orderbook
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Sure, but I meant it in the sense that someone needs to lose money or there's no point in smarter or more well-informed people playing. Their profits have to come from somewhere. These could be (a) people who aren't as smart as they think they are (b) people who subsidize the market in order to get good predictions (c) people who are hedging (essentially, buying insurance). Perhaps other possibilities.
> the sense that someone needs to lose money yep, and that's fine because they did so voluntarily. If there were no stakes on the line, the information in the odds will also not have any real meaning.
This doesn’t tell us all that much about whether a price signal is a valuable source of information. Often, people have varied interpretations of what a price movement means. The price doesn’t tell you how to interpret it. The obvious interpretation can be wrong.
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Equating being "consistently right" with having a sufficiently large stash of capital is ludicrous. "right" people will wisely take most their winnings out of a high-variance market. "wrong" people with deep pockets (or lots of wrong people with shallow pockets) will continue to distort the market.
> will continue to distort the market. they can only do so as long as they have enough capital to lose. Because every time they try to move the betting markets against the truth, they will simply lose that money when the event happens (and turns out they were wrong). So any distortion will merely be temporary. Unless they have access to unlimited capital of course - which is not true yet for anyone (but the US gov't)…
Not sure why the dumb money keeps playing. If you're not the insider the person you're trading against is.
Because its an event contract with a defined upside/downside and time horizon. You know exactly what you stand to lose and gain and when. Makes it a valuable part of some intricate financial strategies.
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> will continue to distort the market. they can only do so as long as they have enough capital to lose. Because every time they try to move the betting markets against the truth, they will simply lose that money when the event happens (and turns out they were wrong). So any distortion will merely be temporary. Unless they have access to unlimited capital of course - which is not true yet for anyone (but the US gov't)…
That only makes sense in a hermetically sealed system, which this is very much not.
Earlier quoted context omitted.
If they make single market predictions with high accuracy it is very very likely they are
No vigilant insider is making a series of "single market predictions with high accuracy" on the same account. They would make unlinkable bets on fresh accounts.
I severely dislike these euphemisms used by prediction market enthusiasts. What exactly is the value of information like “most searched person on Google in year N”? Creating 10s of options to answer this question via gambling on Polymarket/Kalshi does not help anyone except their fellow degenerates. Heck, even events like “by N date the USA invade country X” also offer no real value, except for the insider circle to front run their own invasion and profit from it. Even worse, apparently they provide anonymity and cover to illegal participants (eg obviously US citizens) just like crypto exchanges like Binance did.
I truly question the sanity of those who believe that prediction markets are providing a positive force in this world.