What happened?
Polymarket introduced a 4% annual yield incentive for participants holding long-term positions in their prediction market. This move is designed to maintain accurate long-term pricing and the reward is paid out daily. Apart from this, competitor Kalshi has been outperforming Polymarket in terms of trading volume, marking $728 million in trades last week.
Who does this affect?
This development directly affects participants in prediction markets, especially those holding long-term positions on Polymarket. The high yield incentive can draw more bettors towards Polymarket. However, Kalshi’s superior trading volumes indicate that its users are currently more active, suggesting a potential impact on both platforms’ user bases and market strategies.
Why does this matter?
The announcement matters as it underscores competition between Polymarket and Kalshi in the prediction market sector. Such moves potentially impact the distribution of users and trade volumes between these platforms. It further highlights Polymarket’s strategy to focus on user retention via higher yields and long-term markets, which could drive market trends in the prediction market domain.