Gate connects to Polymarket prediction markets: a new model shifting from price trading to event forecasting

Evolution of Cryptocurrency Trading Models

In the early stages of the cryptocurrency asset market, investors’ trading decisions typically revolved around price fluctuations. Market analysis mostly relied on technical indicators, trend judgments, or fundamental research, aiming to predict the future price movements of assets.

As the market structure gradually matured, new trading models began to emerge. In recent years, event-driven trading methods have gained popularity. These types of trades no longer focus solely on the price itself but are centered around the outcomes of specific events, such as election results, policy decisions, or the release of important economic data.

Under this model, market participants are not just predicting prices but also assessing the likelihood of future events.

How Prediction Markets Reflect Event Probabilities

The core concept of prediction markets is converting people’s views on future events into market prices. When a large number of participants buy and sell a particular event, a price level is formed. This price is often interpreted as the market’s overall assessment of the probability of that event occurring. For example, if the market price of an event is close to 70%, it generally indicates that the market collectively believes there is a high chance of the event happening.

Because different participants enter the market with varying information and viewpoints, prices will continue to fluctuate with trading activity. This makes prediction markets serve two functions simultaneously:

• As a trading platform
• As an information aggregation mechanism

Market prices, to some extent, reflect the collective judgment of the future, and are often viewed as a form of “collective intelligence.”

Different Perspectives Create Trading Opportunities

Similar to traditional financial markets, trading opportunities in prediction markets often arise from differences in viewpoints among market participants. Different investors may form varying judgments about the same event based on their research methods, information sources, or analytical logic. When these expectations diverge, market prices will fluctuate.

Even if the final outcome of the event has not yet been determined, during the development process, market prices may adjust due to new information emerging. For traders, these price movements can create short-term or medium-term trading opportunities. Therefore, in prediction markets, trading is not only about price judgment but also a competition of information and viewpoints.

Product Design: Catering to Both Beginners and Professional Traders

To enable more users to participate in event trading, some platforms offer different operational modes in their product design to meet various needs.

1. Simplified Prediction Mode

Through an intuitive interface and probability displays, users can quickly grasp the overall market expectation for a particular event. This mode is usually easy to operate and suitable for users new to prediction markets.

2. Advanced Trading Mode

For users familiar with trading systems, platforms provide more comprehensive market tools, such as:

• Order books
• Market depth
• Real-time trading data

These features help experienced traders develop more detailed strategies.

Basic Process for Participating in Prediction Markets

To participate in prediction markets, generally only a few simple steps are needed to get started.

First step: Update the app
Update the Gate App to version v8.12.5 or above to ensure related features function properly.

Second step: Log into your account
Open the app and log into your Gate account. If you haven’t registered yet, you need to complete account creation and identity verification first.

Third step: Enter prediction markets
On the app’s homepage in the Alpha section, you can view the currently open event markets.

Fourth step: Select an event to trade
On an event page, users can choose Yes or No based on their judgment and input the trade amount.

Fifth step: Wait for event settlement
Once the event result is confirmed, the system will automatically settle and distribute the earnings to your account.

The overall process combines information analysis with trading operations, making it relatively easy for users familiar with trading platforms to get started.

Dual-Track Model of Centralized and On-Chain Trading

In terms of participation methods, some platforms adopt a parallel model of centralized and on-chain trading. General users can directly trade with stablecoins through the platform’s account system, providing an experience similar to traditional trading platforms with a relatively simple process; meanwhile, users familiar with blockchain technology can participate directly on-chain via Web3 wallets.

These trades and settlements are usually conducted on the Polygon network, helping the system maintain a certain degree of decentralization. This dual-mode design allows users with different technical backgrounds to participate in prediction markets.

Integrating Information Tools to Enhance Market Transparency

To help users better grasp market information, platforms often integrate various data tools into the same interface, such as:

• Market price movements
• Event probability changes
• Order book depth
• Real-time trading data

With these tools, users can gain a more comprehensive understanding of the market status.

Additionally, from position establishment to final settlement, the process has become highly automated. When the event result is confirmed, the system completes the settlement and distributes the earnings to the account, greatly reducing operational steps and making the overall trading experience smoother.

Future Development of Prediction Markets

As the number of participants increases, the influence of prediction markets may continue to expand. Through extensive trading activity, market prices can reflect the collective expectations of the future in real-time.

This mechanism not only functions as a financial trading tool but could also become an important indicator of information. In the future, prediction markets may further integrate with data analysis, financial markets, and blockchain technology. As related technologies and market environments continue to develop, prediction markets might form a new model of information pricing.

Summary

The rise of prediction markets brings new possibilities to crypto trading. Unlike traditional trading centered on price fluctuations, event-based trading focuses on judgments about future outcomes. Through intuitive interfaces, diverse participation methods, and parallel on-chain and centralized designs, prediction markets are lowering barriers to entry, allowing more users to join this emerging trading model. As the market size continues to grow and technology advances, prediction markets may play a more significant role in the crypto ecosystem, providing new information and trading opportunities for the financial market.