- Robinhood launched a new prediction market this Monday.
- The stock trading and investing app is looking to capitalize on the hype of the 2024 US presidential election and wants a slice of the success of Polymarket’s decentralized prediction market.
Fresh from the announcement of the Robinhood Legend unveiling at the HODL Summit in Miami, Robinhood Derivatives, LLC (RHD) is looking to follow it up with the launch of its event contracts market to capitalize on the hype surrounding certain events, such as the November 5 election.
Robinhood Launches a Prediction Market
The new Robinhood prediction market platform offers events contracts that will let customers trade on the outcomes of specific events. Its highlight upon its rollout today is the contest between former President Donald Trump and Vice President Kamala Harris to determine President Joe Biden’s successor.
The format of the Robinhood events contract unmistakably takes a page from the success of Polymarket’s decentralized prediction platform. Recognizing the opportunity created by the fact that US users are not allowed to trade on Polymarket’s events, Robinhood has jumped the gun to cater exclusively to the same market.
How It Works
In addition to being a US citizen, Robinhood’s event contracts require users to first fill in an application for a derivatives account on the platform. The same account must have margin investing or options trading features enabled.
Users will then have to proceed to the “2024 presidential election card” within the “Investing” category, where they can choose “Buy Candidate.”
Like Polymarket, Robinhood utilizes a “Yes” or “No” position to determine the pick of each user. In the case of the US presidential election-related event, the market will resolve the outcome of the contracts on January 6, 2025, upon certification of the US Congress of the election results and settle the rewards for users who have correctly predicted the conclusion of the race after two days.
The price of each contract fluctuates depending on the odds of the candidate the user has chosen. For example, if Trump’s chances of winning on the platform is at 60%, each “Yes” contract for the Republican nominee would cost $0.60. The same mechanic would apply to Harris, which means $0.40 per contract favoring the Democratic Party bet.
Winners will get a $1 per contract payout, while losers will leave with nothing.
Polymarket: An Organic Success for Polygon PoS
Polymarket remains the top decentralized prediction market nowadays. Its exposure was further boosted by the massive attention it has been getting from the mainstream media.
To date, it’s now one of Polygon PoS’ major success stories. Its “Presidential Election Winner 2024” has already gained a total transaction volume of $2.59 billion as of Monday evening. The same category shows the Trump outcome leading by around 65% against Harris’ 34%.
Despite being a huge organic breakout for the Polygon Labs, the chain has only gained $27,000 in fees from Polymarket from the start of the year until last week. On the bright side, Marc Boiron, CEO of Polygon, viewed the admittedly low figure as a testament to the dirt cheap fees the chain is charging per transaction based on an interview with Coindesk.
Boiron also claimed that the Polygon blockchain has greatly benefited from the spike in engagement within Polymarket. So far, this has been more effective than their marketing strategies involving giant brands like Starbucks.
