[c0m]

I would like to test whether prediction markets are worse than they were during zero-interest land. The incentive to create sophisticated models to get low percentage points of edge is much lower today than it was before. Why risk time and effort trying to predict the 2024 election for a few pp of edge when you can… just buy a 1y tbill instead? Sure there are probably better ways to express an opinion on these types of things too. Options that favour a team red or team blue win come to mind, but no matter what you’re still competing with 5% yield.

I think this is solvable by having some kind of betting token that itself accrues interest over time to reduce the opportunity cost but if regulators already don’t like prediction markets boy they especially wouldn’t like that.

[qznc]

This is indeed a problem for long-term markets but long-term is more about 10 years and longer here. Something like "Will China invade Taiwan before 2040?" is a long-term example.

Prediction markets are nearly 50-50 for democrat vs republican president currently. That is a 100% yield if you are correct. It isn't about the yield. It is about much more accurate you are. If your oracle gives you 60-40, you will still lose lots of bets but you will easily beat the 5% yield of treasure bills.