Building on prediction markets.
Paris, France
Joined July 2009
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Microstrategy polymarket insiders have the opportunity to do the funniest thing: using their position to manipulate financial markets for a huge profit.
Details below ⬇️
Yesterday a bunch of obvious insiders (clean accounts, trade only one market, huge size) front-ran the MicroStrategy announcement by trading prediction markets related to a BTC purchase by the company.
See these accounts for more details:
polymarket.com/@meeeeteeee
polymarket.com/@StrippersOfG…
polymarket.com/@fromagi
polymarket.com/@danielesta
polymarket.com/@0x13Ea268FdE…
polymarket.com/@arme
polymarket.com/@Polymarket21
polymarket.com/@mari000
They all made a decent amount of money, a few tens of thousands of dollars.
But they could go for a much bigger payday.
Profit from inside trading MicroStrategy markets on Polymarket is limited by the thin liquidity. If they want to win big they have to find a deeper market.
Now that they are identified as Microstrategy insiders, all eyes are on them. Millions of traders are looking for their next move.
They can take advantage of this by faking an inside trade. A MicroStrategy BTC purchase announcement doesn’t have much effect on bitcoin price. But a MicroStrategy liquidation would be catastrophic for bitcoin and the price would freefall.
The process is simple.
1. MicroStrategy insiders open a huge fat short (leveraged) position on Bitcoin.
2. MicroStrategy insiders aggressively buy “Yes” contracts on this market:
polymarket.com/event/will-mi…
They should be able to “clean” the sell-side of the orderbook with ~30k$.
If they want the message to be crystal clear, they can also buy all the available “Yes” contracts on these markets:
polymarket.com/event/will-mi…
polymarket.com/event/microst…
3. At that point crypto traders would panic and sell their bitcoin holdings fearing Saylor's liquidation. Futures traders would open large short positions to try to profit from the move. The price would plunge.
It’s time for MicroStrategy insiders to close their short position on Bitcoin and take profits.
If they want to optimize, they can now buy BTC (preferably spot) to also profit from the move up, when the market will realize that MicroStrategy will not really be liquidated.
Finally, they sell their "Yes" contracts to what's left of the liquidity in prediction markets.
This tactic should be highly profitable. If I were a malicious actor, I would try to buy those accounts and execute it. But I’m not, and all of this is probably illegal everywhere.
Don’t do this at home.
It looks like models are becoming too powerful to even test for their cyber capabilities openai.com/index/hugging-fac…
Ben retweeted
HyperCore will support outcome trading (HIP-4). Outcomes are fully collateralized contracts that settle within a fixed range. They are a general-purpose primitive that are useful for applications such as prediction markets and bounded options-like instruments. There has been extensive user demand in both of these areas, and builders will likely think of novel applications as well.
Outcomes bring non-linearity, dated contracts, and an alternative form of derivative trading that does not involve leverage or liquidations. The outcome primitive expands the expressivity of HyperCore, while composing with other primitives such as portfolio margin and the HyperEVM.
Outcomes are a work in progress and currently only being tested on testnet. Canonical markets based on objective settlement sources will be deployed once technical development is complete. Canonical markets will be denominated in USDH. Pending user feedback, the infrastructure will be extended to permissionless deployment.
On this graph it looks like markets around ~50% probability 12 hours before resolution are mispriced.
For the highlighted bucket, NO price is 0.527 whereas the fair value is 0.594.
This is a +12.7% expected value for 12 hours.
Has anyone ever tried the NO maxxing strategy?
It looks even more profitable for "almost certain" markets.
NO price = 0.019, fair value = 0.039.
This is 2x for 12 hours.
Seems too good to be true. Or too many bondooorrr?
Source: polymarket.com/accuracy
Also, if someone can tell me why there are 11 buckets for a bar chart that seems to show deciles (what does the 0% bucket stand for?)
Soon, people will do the same to larp as insiders.
1. Fund 4 wallets, take 2 NO positions and 2 YES positions in an Iranian market
2. With the 2 winning wallets, take 1 NO position and 1 YES position on another Iranian market
3. Congratulations, you are now an Iranian insider
Ever wonder why he had a $3k balance in his first post?
The answer is simple: he’s running a massive Sybil farm. He didn't start with $12, he started with hundreds of accounts funded with $10-$20 each. Once one hit $2,900, he started posting.
Since then, he had seven trades and seven wins. But notice that he bets his entire balance every single time. No real trader does this. He’s chasing clout and is willing to do whatever it takes to get it.
He even appears to have wash-traded some of his last bet using his other accounts to get filled at his desired price, since he couldn't get enough fills.
Do your own research before trusting "influencers" blindly. The attached pictures show some of his failed Sybil accounts that only managed to reach up to $1k.
Matrix glitch: a Polymarket that would mathematically not work.
Imagine the market "Will USDC depeg more than 10%?".
If the market worked properly, the price would be the probability of the event occuring. Let's call it X.
If I buy YES at X, my expected value should be 0$.
But if I win my bet, the USDC I get back is worth <0.9$.
So my real expected value at price X would be -0.1X$.
So the price must be 0.9X for the YES buyer expected value to not be negative.
However, at that price the expected value of NO buyers would be -0.1X$.
So there would not be NO buyers.
There would be no transaction. Such a Polymarket would just not work.
Yesterday's price action on the Iranian polymarket showed that spotting insiders is much easier after the fact than before
Who the f*** is betting on Sarah Knafo?
One thing that sparked my curiosity recently (and the curiosity of the small french Polymarket sphere) is the rise of Sarah Knafo in the Paris Mayor election Polymarket.
Anyone who knows a bit about french politics knows that she has absolutely 0 chance of winning (0.01% chance at best). Far right was <15% during the last presidential election in Paris.
So, who's pushing her odds up over 5%?
On the NO side, you have seasoned traders like @scottonPoly and @nicoco89poly who understood the opportunity.
On the YES side, the top9 holders have very few predictions (<10) and most accounts are a few days old.
Delusional supporters?
Clumsy attempt at manipulation?
