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Block 1: Essential news
Riot Platforms catches up with the leader
Bitcoin mining specialist Riot Platforms has increased its hashrate (computing power) by 50%, becoming the world's second-largest mining firm after Marathon Digital. In June, this resulted in the production of 255 BTC, increasing their total reserves to 9,334 BTC. Riot has achieved a hashrate of 22 EH/s thanks to new equipment, and plans to increase this to 31.5 EH/s by the end of 2024. The company's efficient energy strategy has also reduced electricity costs, strengthening its position in the industry.
Germany gets rid of its bitcoins
The German government continues to sell off its Bitcoin reserves, transferring 2,500 BTC to various exchange platforms. These sales, in line with those of the US government and Mt. Gox refunds, are increasing the pressure on the BTC price in recent days. German government holds 13,000 BTC through judicial seizures. A few weeks earlier, the German government transferred 6,500 Bitcoins to a new address.
Australia: Launch of a 2nd Bitcoin Spot ETF
Australia is set to launch its second Bitcoin Spot ETF, BTXX, by DigitalX on the Cboe Australia exchange, following the launch of IBTC by Monochrome Asset Management in June 2024. These ETFs facilitate access to bitcoin for institutions and companies, although they do not allow direct benefit from existing applications on the Bitcoin network. Despite modest volumes in Australia, this launch could capture further interest if the BTC price rebounds.
Marketing: Polkadot has a heavy hand
The Polkadot ecosystem, founded by Gavin Wood (co-founder of Ethereum), is causing controversy after allocating $37 million to marketing, or 42% of its half-yearly expenditure. These expenses include sporting events, influencer fees, conferences and digital advertising, prompting criticism of their usefulness. Polkadot justifies these costs as common for blockchains of this scale, claiming that the community approved these expenses via a governance vote.
Polkadot spent $37m USD in outreach during the first half of 2024, targeting new users, developers, and businesses
- $10m on ads/sponsorships
- $4.4m on influencers
- $4m on digital ads
Yet Polkadot still seems invisible on X and elsewhere. pic.twitter.com/pk0haLvuNm
- Ignas | DeFi (@DefiIgnas) July 1, 2024
Block 2: Cryptic Analysis of the week
Back in early June, we explored the rise of prediction markets. Just one month later, Polymarket is breaking all records. Total Locked Value (TVL) in contracts has climbed to $48 million, and monthly volumes have reached $111.5 million (in June).
DefiLlama
Dune
In the space of just one year, the total blocked value has multiplied by 8.2 and the monthly volume by 17.98. How did this happen, you may ask? In a word: American politics.
Of the twelve current markets highlighted on Polymarket's home page, eleven revolve around the US presidential election. Polymarket users aren't lining up to speculate on the next crypto token to hit the billion-dollar mark first; they're massively attracted to betting on the winner of the 2024 presidential election. The 2024 presidential election winner market captured $240.7 million.
Polymarket
- Democratic candidate 2024 : $99 million raised
- Biden withdraws from presidential race: $13.3 million raised
- For soccer fans, a market is opened on the winner of Euro 2024 : 4.1 million euros raised
To illustrate the explosive impact of politics on the Polymarket, let's take one of crypto-currency's most captivating recent markets:"Will an Ethereum ETF be approved by May 31?" This market closed with a staggering $13.2 million in bets.I assume you now understand the basics of Polymarket:
For example, if the market thinks there's a 63% chance that Donald Trump will win the presidential election, shares of that outcome cost 63 cents and earn $1 if the prediction comes true.
Naturally, the price of shares fluctuates according to demand and supply, as well as new information becoming available that may affect the perceived probability of the event. Users can buy or sell shares at any time prior to the conclusion of the event.
Once the event is concluded, shares in the winning outcome are paid out at $1 each, while shares in the losing outcome are worthless. Users who bet correctly earn a profit based on the difference between the purchase price of the shares and the payment of 1 dollar per share.
The name Polymarket comes from Polygon, an Ethereum Layer 2 solution that enables the platform to keep transaction costs very low.When a new prediction market emerges on Polymarket, a smart contract is created on the blockchain. This contract describes the parameters of the market, including potential outcomes, timeframes and related trading details. This contract protects participants' funds, guaranteeing the authenticity and integrity of the market.
Polymarket has closed its Series B funding round, raising $45 million with participation from Peter Thiel's Founders Fund, 1confirmation, Dragonfly, ParaFi and Vitalik Buterin (co-founder of Ethereum).The problem facing Polymarket is that the platform essentially only has until early November to capitalize on the current political momentum. This is not necessarily detrimental, as Polymarket does not rely on a native token. However, maintaining this product-market fit and sustaining interest beyond political events could be a challenge for the platform.
Accessing Polymarket isn't complicated, but it does require some familiarity with common native cryptographic practices that aren't well understood by the general public: paying for gas, connecting wallets, using USDC and token transfers.
That said, Polymarket's list of drawbacks is fairly short. The platform didn't tarnish its name with a failed airdrop, kept fees and spreads ridiculously low, found an explosive market and added a layer of depth to the cryptocurrency use case in prediction markets.
Polymarket offers a fascinating first glimpse into the future of prediction markets, which could theoretically grow into a multi-billion dollar industry. While this may sound ambitious, it's not beyond the realms of possibility.
Block 3: Gainers & Losers
Crypto chart (Click to enlarge)
Block 4 : This week's readings
The $11 billion market driving the cryptocurrency scam economy (Wired)
After a 10-year wait, Mt.Gox's Bitcoin is finally back (Wired)
