Polymarket returns as sports betting replaces the election prediction market

Polymarket showed signs of reviving activity levels as sports betting replaced the political market that brought viral fame to the platform. The removal of the top US elections market brought volumes down, but the betting platform keeps showing signs of organic recovery. 

Polymarket has adapted to the post-election period, despite the loss of its biggest betting market. The app immediately lost 50% of its volumes, sparking concerns it would fade with the hype. However, the last quarter of 2024 signaled Polymarket had enough supporters and offered other hot prediction pairs. The app had its most successful year to date, raising questions about its potential for sustainable development.

The platform has shifted to more diverse bets for smaller sums instead of one or two dominant markets. Polymarket volumes peaked at above $1.026B as of November 4, immediately crashing to around $300M. Since then, Polymarket recovered its activity to over $543M at the end of December, taking just a few weeks to return to a higher baseline. 

A significant part of the growth comes from prediction positions ranging from $1,000 to $10,000. Polymarket remains a highly liquid hub, with relatively few low-value bets. The market still sees positions of over $1,000,000, but the biggest whale bets have diminished the most since the November elections. 

Polymarket increases trade counts across all segments

Polymarket shifted from a whale-controlled market into more diverse activity for all bets grouped on size. In December, wallets from all betting segments achieved a record number of transactions, despite the lower size of their bets. 

One of the most active groups of prediction wallets was once again for bets ranging from $1,000 to $10K. However, Polymarket also grew its lowest segment of bets under $1,000. 

As a result, fees related to Polymarket activity spiked in December, surpassing the levels from the US election season. It now makes up more than 43% of all Polygon fees paid, while boosting USDC activity. 

The prediction market essentially has been pivotal to Polygon’s survival, one of the legacy L2 chains. Polygon has been losing apps to other chains after most games and NFT collections slowed down their activity. 

Politics retains its influence, sports trend expands

Open interest on Polymarket has been growing gradually after the November 7 lows. The platform adapted with new bets on Trump’s administration. Having experience with elections, the platform now shifts to other events in international politics. Elections make up a small but consistent section of the platform’s activity. 

Political bets retained their relative share, while sports bets expanded faster in the last quarter, suggesting the trend may last into 2025. The Super Bowl bet was among the hottest trades, with bets being placed within seconds for other sports predictions. 

General culture and crypto bets are also showing organic growth. However, the biggest volume breakout is for sports bets, attracting both higher bets and a larger number of unique wallets in each prediction market. 

Will prediction markets become a tokenized trend?

Prediction markets were one of the oldest use cases for decentralized technologies. Betting laws, however, prevented most projects from developing their full potential. 

Even in 2025, after a breakout year for Polymarket, prediction tokens are a relatively small market, valued at only $1.1B. Gnosis (GNO) is the leading token, holding more than 60% of the prediction market value. 

Polymarket is still tokenless, relying on USDC and fees paid in POL for its activity. However, the protocol is still setting expectations for an airdrop.

One concern from the past few weeks was that Polymarket volumes were not organic. People suspected it was just a form of airdrop farming. 

For now, the size of bets and activity suggest market participation is actually organic, and not tied to an expected airdrop. Polymarket has not given any specifics on its intended token launch. The airdrop was mentioned right after the outflow of users following November 6, which could be an incentive to keep funds on the platform and preserve liquidity. 

Polymarket continued to grow its influence, despite being banned in France and raising skepticism about its fairness. The platform is one of the longest-running and most liquid. Also, most of its top markets are difficult to manipulate, even by whales. 

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