Original | Odaily Planet Daily (@OdailyChina)
Author | Azuma (@azuma_eth)
This morning, Barron's reporter Nick Devor posted a very "bizarre" phenomenon on X — on the "2028 Presidential Election" prediction event on Polymarket, about 70% of the trading volume is concentrated on some candidates who are almost impossible (real-time probability less than 1%).
For example, the highest trading volume is actually NBA star LeBron James (trading volume $48.41 million), followed closely by entertainment celebrity Kim Kardashian (trading volume $33.84 million). Further down the list are even some candidates who are not U.S. citizens at all (not meeting the eligibility rules), such as the world's richest man Elon Musk (trading volume $23.14 million), New York City Mayor Zohran Mamdani (trading volume $18.39 million)......
As for those truly high-probability candidates, such as the real-time probability leader Vice President JD Vance (trading volume $10.58 million), California Governor Gavin Newsom (trading volume $15.71 million), and Secretary of State Marco Rubio (trading volume $9.32 million), their trading volumes are far lower than the aforementioned "celebrity candidates".
Official data from Polymarket shows that the total trading volume for the "2028 Presidential Election" has reached $549 million, making it the platform's most popular betting event long ago. However, a closer look at the trading volume data for the 36 candidates reveals the counter-intuitive situation described above. Why is this? Are people crazy, betting on candidates who are almost or completely impossible?
The answer, of course, is not that. Earlier this year, Odaily wrote an article titled "Who is Placing Counter-Intuitive Bets in Prediction Markets?", which used examples like "The Second Coming of Christ" and "Flat Earth Theory" to explain that the groups trading or providing liquidity in these absurd event markets can be categorized into three main types: "lottery players, bots, and airdrop hunters".
Nick Devor's own explanation for this also aligns with the third logic we listed. He found that multiple top addresses hold the same quantity of both YES and NO shares for the same candidate, which is essentially to earn risk-free returns subsidized by Polymarket — to maintain long-term pricing accuracy, Polymarket provides a 4% annualized holding reward for positions in some markets based on the total position value, and the "2028 Presidential Election" is one of these subsidized events.
Nick Devor stated that a 4% annualized yield is already higher than the current U.S. Treasury yield (3.98% for 5-year), so whales would prefer this low-risk position holding, such as buying NO on James or Kardashian (it's all the same, just buy whoever is popular), to obtain this part of the return; if they hold both YES and NO shares simultaneously, they can achieve risk-free returns.
As for why some users unilaterally hold small amounts of YES for such low-probability candidates, another X user A5 (@probablythenuts) explained that in this kind of multi-option market, Polymarket provides a feature that allows users to convert a set of NO shares into a corresponding set of YES shares.
Many users use this feature for reasons of liquidity depth or better pricing — meaning they don't directly buy YES for the candidate they think will win, but first buy NO for the candidates they believe will not win, and then convert these NO shares into a corresponding set of YES shares. Furthermore, they can also buy NO for multiple candidates simultaneously and, after conversion, hold a corresponding set of YES shares for other candidates, including any new to the event in the future.
Therefore, the users trading James and Kardashian on Polymarket's "2028 Presidential Election" event are neither crazy nor stupid. They are either seeking stable annualized returns or a better execution strategy. While the operations may seem absurd, they are still driven by rationality.
