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 almost impossible (real-time probability less than 1%) candidates.
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), and even some candidates who are not even U.S. citizens (not meeting the candidacy 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), 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 hottest betting event. However, a closer look at the trading volume data for the 36 candidates reveals the counterintuitive situation described above. Why is this? Are people crazy, betting on candidates who are almost or completely impossible?
The answer, of course, is no. Earlier this year, Odaily wrote an article titled "Who is Placing Counterintuitive Bets in Prediction Markets?", which used examples like "The Second Coming of Jesus" 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 also aligns with the third logic we listed. He found that multiple top addresses hold equal quantities of YES and NO shares for the same candidate, essentially aiming to earn risk-free returns subsidized by Polymarket — to maintain long-term pricing accuracy, Polymarket provides a 4% annualized holding reward based on the total position value for holdings in certain markets, and the "2028 Presidential Election" is one of these subsidized events.
Nick Devor stated that a 4% annualized return is higher than the current U.S. Treasury yield (3.98% for 5-year notes), making whales prefer this low-risk holding strategy. For example, they might buy NO shares for James or Kardashian (it's all the same, just buy whoever is popular) to capture this return; by simultaneously holding both YES and NO shares, they can achieve risk-free returns.
As for why some users unilaterally hold small amounts of YES shares for such low-probability candidates, another X user A5 (@probablythenuts) explained that in this type of multi-option market, Polymarket offers a feature that allows users to convert a set of NO shares into a corresponding set of YES shares.
Many users utilize this feature for better liquidity depth or pricing — meaning they don't directly buy YES shares for the candidate they think will win, but first buy NO shares for the candidates they believe will lose, and then convert these NO shares into a corresponding set of YES shares. Additionally, they can buy NO shares for multiple candidates and, after conversion, hold a corresponding set of YES shares for other candidates, including any new candidates added to the event in the future.
Therefore, the users trading James and Kardashian on Polymarket's "2028 Presidential Election" event are neither crazy nor foolish. They are either seeking stable annualized returns or a better execution path. While the operations may seem absurd, they are still driven by rationality.
