Manhattan, June 2020. As the city that never sleeps dozes under a pandemic curfew, a 21-year-old stares at the empty streets from his shabby East Village flat. Shayne Coplan has just dropped out of NYU, like every genius dropout since Gates and Zuckerberg. Except he is not dreaming of social networks or operating systems. His thing is turning collective anxiety into a financial market.
The idea comes to him while reading Robin Hanson, the economist and prophet of futarchy, a system in which decisions would be made according to citizens’ bets rather than their votes. Far too good an idea to stay locked up in academic papers, Coplan tells himself. While the whole world is frantically scrolling Twitter for the next sign of the apocalypse, he pictures a platform where anyone could literally bet on the end of the world. Or at least on its probability.
Polymarket is born in chaos: a pandemic, an explosive US election, an economy in free fall. The timing is perfect to launch what looks like a bookmaker for hyperconnected neurotics. Except Coplan has no wish to be just another online sports bookie. No, he sees himself as the architect of the “wisdom of crowds”, the man who will finally prove that the crowd, when it puts its money where its mouth is, predicts the future better than any expert in a tie.
The concept is biblically simple: turn any yes-or-no question (“Will Trump be re-elected?”) into a market. If you think the answer is yes, buy “Yes” shares; their price, between 0 and 1 dollar, reflects the crowd’s estimate of the probability. At 65 cents a “Yes” share, the market is saying: 65% chance. It is the stock market, but for the news. It is also, incidentally, online gambling, but Coplan would rather not dwell on that for now.
Take-off is meteoric. In November 2020, the market on a Trump victory goes from $120K to $2.9M in two weeks. Crypto bros flock in, drawn by a new way to speculate on something other than altcoins, which were already the alternative to Bitcoin. And that is before meme coins even turned up (though in the end they would all live happily together). Naval Ravikant and Balaji Srinivasan, gurus of libertarian Silicon Valley, chip in $4M. Polychain Capital gets out its chequebook.
The platform soon moves to Polygon to escape Ethereum’s prohibitive fees. Because betting on the apocalypse is fine, but not at $50 a transaction. Then the interface gets simpler and card deposits arrive. Polymarket wants to win over more than the inner circle who know what a “smart contract” is.
But it is the 2024 US election that turns Polymarket into a modern oracle. When Biden wobbles during the June debate, the platform instantly gives him a 70% chance of dropping out. Traditional media take three weeks to catch up. More than $3.3bn changes hands on that election alone. Nate Silver, the pope of election statistics, joins the start-up as an adviser. The ultimate seal of approval for a platform that claims to be reinventing prediction.
The Titan submersible goes missing? Polymarket opens a market. Russia threatens to go nuclear? Traders place their bets. Meta launches Threads? People bet on it flopping. The platform becomes an unlikely cross between the New York Times and Las Vegas, where every headline turns into a speculative opportunity. Cynical? No doubt. Effective? Terribly.