Backing Polymarket’s primary favorites would have lost 4%, new audit finds.
A hypothetical technique of backing the favourite on prediction market Polymarket in each scored 2026 US primary would have lost 4%, though these candidates gained 87% of the time, based on blockchain information supplier Bitquery’s scorecard dated Oct. 9. The outcome separates two questions for election bettors: who’s most probably to win, and whether or not their contract is definitely worth the value.
Bitquery discovered that the candidate with the best examine reference value gained 238 of 273 Senate, House and governor primaries. But its hypothetical technique of placing $1 on every favourite on the examine’s reference value lost 4 cents per greenback.
The strongest favorites did a lot of the work behind the headline accuracy fee. Candidates priced at 90 cents or extra gained 177 of 182 races. Among favorites priced between 50 and 90 cents, nonetheless, 71% gained regardless of a mean value of 77 cents.
An consequence share pays $1 when it wins and nothing when it loses. Buying an costly favourite due to this fact leaves little revenue on a profitable share, whereas a dropping share wipes out its buy price. Enough losses can outweigh many right calls.
Putting the identical greenback quantity into each race additionally buys completely different numbers of shares. A less expensive winner produces a bigger payout for that stake than an costly winner. Counting right predictions treats each race equally; calculating returns should account for these completely different payouts.
Reference costs restrict the betting conclusion
Bitquery averaged trades throughout the 24 hours earlier than 12:00 UTC on voting day. When a candidate had no commerce in that window, it used the final commerce inside the previous 30 days. For races that went to a runoff, it used the runoff date.
Those averages, and probably stale fallback trades, are reference costs fairly than assured purchase quotes on the cutoff. The revealed methodology doesn’t specify a full adjustment for spreads, slippage or charges. Polymarket’s current fee page lists a politics charge vary of 0% to 1%, however doesn’t set up the fees on the historic trades on this pattern.
The examine excluded 9 markets as a result of some settled earlier than voting, some lacked usable costs and one lacked a settlement file. It lined primaries within the 50 states utilizing Polygon commerce information, leaving out Polymarket’s US app and different venues resembling Kalshi.
For November’s prediction markets, the excellence between forecasting and pricing stays helpful. The measured primary file itself could not carry over: Bitquery cautions that basic elections entice more cash and polling than small, native contests.
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