Every election cycle seems to launch a new predictions star. In 2008, it was CNN’s John King and his “Magic Wall” of color-coded electoral data. Later cycles saw the rise of the “two Nates” (Silver and Cohn), whose brand of statistics journalism made gimmicks like the New York Times’ prediction needle a fixture of political coverage. In 2024, all eyes have been turning to a new election year darling: the website Polymarket.
The betting site, which is built on blockchain technology, has become a go-to for political insiders after several instances where it anticipated major election developments well ahead of the media. In the past few months, for example, Polymarket foreshadowed President Joe Biden dropping his reelection bid and Donald Trump selecting JD Vance as his running mate. The site’s reputation has grown to such a degree that Nate Silver himself agreed to join the company as an adviser.
Polymarket’s creator, barely known outside of a small circle of crypto types, is Shayne Coplan, a 26-year-old New York City native whose appearance suggests he should be on tour with an alt-rock band rather than running one of the most influential sites in contemporary politics. Coplan has so far avoided the limelight, but that’s likely to change in the near future as Polymarket—which has raised $70 million in funding—grows its profile in U.S. political life.
A crypto protégé comes of age
At a recent dinner party in Manhattan, Coplan arrived in jeans and a leather jacket. He had come at the behest of a venture capital firm that had convened startups in its portfolio to network and meet members of the media. Coplan was easy to spot by the unruly basket of curls framing his head, and a casual demeanor that set him apart from the other founders.
While venture capitalists like to say they don’t have a favorite child among their portfolio companies, the organizer discreetly identified “the Polymarket guy” as the one most worth meeting. Coplan, however, appeared in no rush to make the rounds and, after some polite conversing, he left during the main course, apologetically telling the table he had to get to a concert in Brooklyn.
New York is a place Coplan knows well. He was raised on the Upper West Side by his mother and attended public school in Hell’s Kitchen near the theater district. As a teenager, he learned to code and, according to crypto lore, became the youngest participant in the initial sale of Ethereum in 2014—a time when the token, which trades for around $3,500 today, could be purchased for 30 cents. Coplan would go on to pursue a computer science degree at New York University, but then leave before graduating in order to pursue a growing obsession: crypto and prediction markets.
“He wants to be able to talk about it forever. This is his life. He lives it,” says Rob Hadick, a partner at the venture capital firm Dragonfly, one of Polymarket’s investors. He added that, at an initial meeting, Coplan eschewed a formal pitch in a conference room and instead proposed a walk, which turned into a two-hour stroll around New York, during which Coplan talked Hadick’s ear off about prediction markets.
As books like The Wisdom of Crowds explain, using collective predictions to determine the likelihood of future events is often more reliable than consulting experts. The concept is hardly new, and indeed variations of it—including market-based prediction markets—have been around for centuries. And while there are other online betting platforms like Ireland’s Paddy Power, which lets users wager on everything from sports to politics, Coplan says Polymarket is different.
“It’s much more categorized as a derivatives platform, where the pricing of such derivatives becomes invaluable real-time info,” Coplan said by text message—pointing to the fact that odds are determined on a continuous basis by a pool of bettors, rather than by a centralized oddsmaker. (Polymarket is also notable for settling and paying out wagers using smart contracts—specifically via a sub-layer of the Ethereum blockchain known as Polygon.)
In recent months, Coplan has had the opportunity to talk up the benefits of his site directly with politicians, including at a breakfast with Florida Gov. Ron DeSantis. Last week, he also posted a retweet that shows images from the site displayed around RNC headquarters—but so far has been careful not to reveal his own political leanings.
Asked for a formal interview—something he has not done since 2020 when Polymarket first came to attention—Coplan politely demurs, citing a busy schedule.
Coplan’s online footprint is a shallow one. There are a handful of pictures online showing a 20-year-old Coplan, sans curls, addressing a crypto gathering and partaking in a boat cruise at the Bitcoin Miami conference in 2018. But he has otherwise avoided the glare of the media—though, as Polymarket becomes a household name, he may not have this luxury much longer.
Betting on an uncertain future
Most people are familiar with online betting sites, including U.S. ones for sports betting or overseas ones that let punters wager on everything from elections to probability of aliens landing. Polymarket offers all these bets too, but under the hood it works very differently.
Instead of a central oddsmaker, the probability of a given event is determined by Polymarket users who can buy “shares” in a given outcome. For instance, on July 31, those who think Donald Trump will replace his ticket mate JD Vance could pay 8 cents, and if that comes to pass, the value of their contract will rise to $1 (if it doesn’t by election time, it will drop to zero). And, of course, the price will fluctuate in response to news events.
Polymarket for now has declined to pursue the most obvious source of potential revenue: taking a cut of the wagers on the site. Instead, its evolving business model—which includes a forthcoming feature that will let users pay with credit cards instead of just crypto—appears to involve a media, and possibly a consulting, operation. Semafor reported this week that Polymarket is in the process of rolling out a series of newsletters, while also pairing with major media outlets that will include its data in their coverage (charts from the site have already turned up in the Wall Street Journal). The company has not disclosed how much, if any, revenue it will earn from these ventures.
There is also the potential for Polymarket to charge for given bets to appear on its sites. Currently, the company fields suggestions on its Discord platform, and then informs its community which ones will be added. Some of the most recent additions include bets on Simone Biles’ medal haul and the likelihood of a U.S.-Iran military conflict by Aug. 31. For now, though, there is no indication Polymarket plans to let companies pay to list a bet.
Polymarket shares as the hottest bet of all?
Polymarket is not the first site of its kind. Earlier crypto projects like Augur and Gnosis likewise offered a decentralized betting platform, but they never got traction. Polymarket, by contrast, has become a fixture of political Twitter and, according to Nick Tomaino—whose venture fund 1Confirmation has invested in all of these projects—is the go-to site for 85% of all online wagers on the outcome of the U.S. presidential election.
The site’s rapid growth—it attracted a record 42,000 bettors on July 1, up from 4,000 in January—is perhaps surprising given that bettors in the U.S., where wagers on elections are illegal, are barred from using the platform, and that Polymarket requires users to connect a crypto wallet and pay using the USDC stablecoin. These barriers also raise the question of whether Polymarket bettors—who are mostly non-Americans steeped in crypto culture—can offer reliable predictions of U.S. election events.
Tomaino acknowledges that it would result in a better sample if Americans could participate, but says Polymarket nonetheless offers a very strong signal. This is because, like other prediction markets, it reflects not just the “wisdom of crowds” but is based on a group of people with a financial stake in an outcome, and who are likely to be more knowledgeable.
In assessing Polymarket and betting markets of all sorts, it’s also useful to recall that the probable outcomes they display are just that—probabilities. In 2016, most pollsters and betting sites said that Hillary Clinton had a 75% to 85% chance of victory. The fact that she lost does not discredit those predictions, but rather reflects there was a smaller—but very real—probability that Donald Trump would win, and that is the probability that materialized.
Polymarket is not just an intriguing new fixture of the U.S. election scene. It is also a hot startup whose $70 million raised so far, including a $45 million funding round in May, comes from influential investors. They include not only crypto royalty including Ethereum creator Vitalik Buterin and early Coinbase employees, but also prominent venture capitalists such as Peter Thiel.
Still, it remains unclear how exactly Polymarket intends to make money. According to Tomaino, the site’s revenue is currently “very low” even as it pays for overhead like an office in New York City and a staff of somewhere between 25 and 30.
And Polymarket’s biggest challenge may be persuading regulators to let it operate in the U.S. at all. In 2010, the Commodity Futures Trading Commission, pursuant to the financial reform law known as Dodd-Frank, banned derivatives or so-called event contracts that involve terrorism and other illegal activities, including “gaming.” While the CFTC—which fined Polymarket $1.2 million in 2021 for operating in the U.S.—didn’t define gaming at the time, it is currently crafting new regulations to explicitly ban election wagers.
The investor Tomaino is unfazed by all this. He views concerns that election wagers could corrupt the political process as misguided, noting that such wagers have provided insight for over a century and that super PACs—which allow anonymous donors to spend millions of dollars on behalf of candidates—would seem to be a bigger threat to election integrity. As for Coplan, Tomaino says, he will likely become more visible in coming months. But for now he is “just head-down focused on the product.”
