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The Anatomy of a Blockchain Prediction Market: Polymarket in the 2024 U.S. Presidential Election

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  • Kwok Ping Tsang
  • Zichao Yang

Abstract

Using on-chain Polygon data, we analyze Polymarket's 2024 U.S. Presidential Election market and develop a transaction-level accounting framework with two components: a volume decomposition that separates exchange-equivalent turnover from share minting and burning, and trader-level disagreement measures. Naive aggregation reports $958M of October Trump-market volume, compared with $391M under our decomposition. Market quality improved as arbitrage-deviation half-lives fell from hours to under a minute and Kyle's {\lambda} dropped from 0.53 to 0.01. During October's large-account episode, capital flowed into both sides simultaneously, consistent with heterogeneous-beliefs trading rather than one-sided manipulation. The framework generalizes to other tokenized prediction markets.

Suggested Citation

  • Kwok Ping Tsang & Zichao Yang, 2026. "The Anatomy of a Blockchain Prediction Market: Polymarket in the 2024 U.S. Presidential Election," Papers 2603.03136, arXiv.org, revised May 2026.
    • Handle: RePEc:arx:papers:2603.03136
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    References listed on IDEAS

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