Polymarket quietly proves utility of web3 – even as U.S. government seeks regulation

Polymarket, a blockchain-based prediction platform, has emerged as a significant tool for gauging public sentiment, especially during the 2024 election cycle. Built on Polygon, one of the leading blockchain networks (and a longtime partner of Upptic), Polymarket represents a noteworthy development in the web3 space.

A stealth web3 success

Polymarket’s rise comes at a time when discussions around web3 and blockchain technology have somewhat receded from the public eye. As Upptic CGO Warren Woodward noted in a recent Games Growth with Upptic discussion, the platform has managed to carve out its niche without the intense scrutiny or backlash that characterized the NFT boom. Unlike the fervent ideological debates that often accompany blockchain-based products, Polymarket’s success is largely attributed to its practical utility. It has been recognized by prominent analysts, including Nate Silver, as a valuable tool for predicting the outcomes of major events, often with higher accuracy than traditional polling methods.

Additionally, the platform rarely utilizes web3 language. Checking out its website, blog, and social media channels, you will rarely see any mention of “web3,” “blockchain,” “crypto,” or other familiar web3 terms. This is another good example of how highlighting the product, instead of the technology, is a winning formula when it comes to web3.

Record growth amidst regulatory hurdles

Polymarket recorded a staggering $387 million in trading volume in July alone, reflecting its growing popularity. Despite its success, the platform faces significant challenges, particularly in the United States. U.S. residents are currently unable to participate in betting activities on the platform due to legal restrictions imposed by the Commodity Futures Trading Commission (CFTC).

The CFTC has expressed concerns that prediction markets like Polymarket could encourage unethical behavior or even interfere with elections – and has proposed a rule that would ban betting on events across the board. These concerns have sparked a debate among economists, some of whom argue that such markets are generally accurate and that fears of manipulation are exaggerated.

For now, U.S. users can only observe the data and odds on Polymarket, unable to place bets themselves.

The challenge of onboarding users

While Polymarket represents a promising application of blockchain technology, it also underscores the persistent challenges of user onboarding in the web3 space. The process of getting started on Polymarket — buying USDC, transferring it through various wallets, and finally placing a bet — remains convoluted and inaccessible to the average user. This complexity is a significant barrier to wider adoption, despite the platform’s robust use case.

Warren emphasizes the need for more streamlined user experiences, pointing to other web3 gaming products like Immutable Passport as examples of how the industry can simplify onboarding. However, as it stands, the user journey on platforms like Polymarket remains cumbersome, potentially deterring less tech-savvy individuals from engaging with the product.

A glimpse into the future of web3

Despite these hurdles, Polymarket’s emergence is a positive signal for the future of web3 applications. It suggests that there is genuine user demand for blockchain-powered products that offer real value and utility. As the industry continues to evolve, the hope is that platforms like Polymarket will not only refine their user experiences but also navigate the complex regulatory landscape more effectively.

For game developers and marketers, Polymarket’s story serves as a reminder of the untapped potential within the web3 space. It highlights the importance of practical use cases and the need to create products that resonate with users beyond the hype. As the technology matures, those who can successfully bridge the gap between innovation and accessibility will likely lead the next wave of digital transformation.