(Blockworks) Prediction Markets Really Are All the Rage Right Now

By Katherine Ross & David Canellis

I did get a chance to chat with Eric Chen, CEO Injective Labs, about the blockchain’s newest offering.

“This is an election perpetual futures contract, allowing users to gain leveraged exposure to an elections market. Unlike traditional crypto assets, an election perp on Helix is a perpetual futures contract that tracks the price of a market on Polymarket. Traders can go long (buy) or short (sell) the election perp with up to 3x leverage, enabling them to take a position on the outcome of elections with amplified exposure,” he explained.

“Additionally, this market allows traders to implement a delta-neutral strategy on TRUMPWIN, the underlying asset of the 2024 Election Perp Market. In theory, they can go long on TRUMPWIN on Polymarket and concurrently short it on Helix, allowing them to profit from the (potential) negative funding on Helix regardless of the election outcome.”

The goal is to allow users to “trade Polymarket odds with leverage, ensuring they can engage with a price that reflects broader consensus.”

I asked Chen how prediction markets help shape DeFi, but he said it’s more about the utilization. Prediction markets, he added, are a way to “utilize blockchain as a tool for users to engage in real-time, trustless transactions.”

By enabling the interactions, we are all privy to “truly unique and unbiased data,” a popular point folks make about Polymarket. Polling doesn’t allow for such real-time insights, for example. Not to mention, you can pretty much find any market on Polymarket.

Injective, unfortunately, isn’t offering the election perpetuals in the US due to the lack of aforementioned regulatory clarity. Kalshi briefly launched its markets after initially winning its court battle with the CFTC but the regulator proceeded to file an appeal and an emergency stay that halted Kalshi’s offering.

Chen acknowledged that the larger issue is “understandably complicated” and digs deeper than just a regulator trying to shut down an outlet for free speech.

But, as it stands, there are no clear regulations. And instead, “lawmakers have silenced a vocal outlet that has the potential to serve as one of the most objective indicators of public opinion, provided that proper rules are in place.”

Clearly, with the continued battle around Kalshi, regulatory clarity will remain murky at best. Still, whether regulators like it or not, prediction markets are having their moment and everyone — not just the degens — wants to take part.

About Injective

Injective is a lightning fast interoperable layer one blockchain optimized for building the premier Web3 finance applications. Injective provides developers with powerful plug-and-play modules for creating unmatched dApps. INJ is the native asset that powers Injective and its rapidly growing ecosystem. Injective is incubated by Binance and is backed by prominent investors such as Jump Crypto, Pantera and Mark Cuban.