Media Trust Declines! Grayscale Report: Blockchain Predictive Market Has the Potential to Become a Source of Truth

According to a recent opinion poll, trust in the media in the United States is currently at its lowest point in the past 50 years. In light of this decline in media trust, Grayscale has released a research report highlighting that blockchain prediction markets like Polymarket have the potential to become a new generation of truth sources.

Media Trust Continues to Decline, Leading to "Truth" Issues

A Gallup poll shows that Americans' trust in the media has dropped to a 50-year low, with confidence hitting a record low in 2016 when Trump clashed with the media over trust issues. GrayScale's report further indicates that with the increasing cases of misinformation, nearly three-quarters of American adults believe that the news media contributes to political polarization, and almost half have little trust in the media's ability to report news fairly and accurately.

(Source: GRAYSCALE)

This trend raises several questions:

1. Is truly objective information possible?
2. How can we incentivize fact-based reporting?
3. How do we address the issue of biased reporting driven by interests?

GrayScale directly points out that prediction markets like Polymarket have the potential to be platforms for discovering the truth. In fact, Bloomberg integrated Polymarket's predictions into its terminal during this election.

Enhancing Political Analysis Predictions! Bloomberg Integrates Polymarket U.S. Election Data into Terminal

Money Incentives Drive Collective Intelligence, Prediction Platforms Cover a Wide Range of Topics

Users predict event outcomes through smart contracts, and Polymarket's events cover almost all topics, such as politics, sports, pop culture, science, or macroeconomics. Prediction markets typically offer binary options for specific outcomes (e.g., yes or no). For example, participants bet on whether a specific candidate will win an election. If the likelihood of the candidate winning increases, the value of shares supporting "yes" increases, while shares supporting "no" increase if the likelihood decreases.

These dynamics create market-driven probabilities of specific events occurring, reflecting the collective wisdom of participants. Regardless of personal biases, participants are economically incentivized to provide accurate predictions. Correct predictions lead to profits, while incorrect predictions result in losses.

Prediction markets can be traced back to bets on the next Pope in 1503. By 1884, election betting became a significant activity on Wall Street, with modern prediction markets emerging in recent decades. These include traditional platforms like PredictIt and Kalshi, as well as blockchain-based options like Augur and Polymarket.

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Despite concerns of manipulation in prediction markets, these markets often self-correct due to economic incentives.

Dynamic Adjustment Superior to Traditional Polls, Traditional Media Starts Citing Data

For the 2024 elections, Polymarket's trading volume has grown from $7.3 billion in 2023 to $1.37 billion in 2024. It has become a data source cited by journalists from publications like The Wall Street Journal, CNN, and Bloomberg.

This year's U.S. presidential election has increased interest in Polymarket, showcasing the platform's dynamic adjustment capabilities, such as predicting events like Trump's assassination attempt or Biden's withdrawal to support Harris. As shown below, the market for the winner of the U.S. presidential election on the platform reflects odds fluctuations based on these political events, generating $776 million in trading volume as of September 4.

Blockchain Technology Benefits Prediction Platform Transparency, Community Governance Enables Decentralized Decision-Making

Polymarket is built on the Polygon chain and records every contract based on events and their resolutions on the chain through collaboration with oracles. In case of disputes, oracles find solutions through community voting, all recorded on the chain. This mechanism ensures that the resolution of market disputes is not subject to central, arbitrary, or potential biased interference.

Furthermore, the permissionless and 24/7 operation of blockchain allows people worldwide to use the Polymarket platform seamlessly and at low cost, in contrast to many Web 2 prediction platforms that may have identity restrictions, posing regulatory risks in some regions like Taiwan, where cases of violating election laws have occurred due to predicting presidential elections.

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Emphasizing User-Friendliness, Is Polymarket the Key to Bringing Liquidity to the Crypto Space This Cycle?

On the other hand, Polymarket's intuitive user interface allows non-cryptocurrency native users to easily navigate the platform. This is a common challenge for most blockchain applications, where individuals without relevant knowledge face high costs to familiarize themselves with on-chain operations. Additionally, Polymarket accomplishes what most blockchain applications cannot, garnering attention and mainstream credibility from traditional institutions and media. Perhaps Polymarket could be the key to increasing off-chain liquidity for blockchain this cycle.

It is worth noting that Polymarket focuses on the product itself rather than tokenizing business value. Users can use the service without needing to know that blockchain technology is being utilized in the backend, embodying its user-friendly concept.