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Ansgar
@ansgar.eth
The timing on this is ridiculous - my first ever larger size polymarket bet, and that just so happens to be seconds before someone comes in with almost $1M to shift that market 4% in the other direction, in an (unsuccessful) attempt to win a secondary market… https://x.com/jon_charb/status/1832112496968171679
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✳️ dcposch on daimo
@dcposch.eth
Polymarket should ban self-referential markets > creates too much upside for manipulators.
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Ansgar
@ansgar.eth
Not sure I agree actually! These types of temporary market inefficiencies just provide incentives for actors to come in and bring them back to the true equilibrium. E.g. in my case I bought some more (cheaper) shares once I noticed the drop. Given that my underlying conviction didn't change, that was free money.
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Ansgar
@ansgar.eth
In general my guiding principle in these questions is "don't solve via rule enforcement what can be solved via markets", even if those markets sometimes need some time to mature and become efficient.
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✳️ dcposch on daimo
@dcposch.eth
Right, but take the extreme case: “Trump <50% to win as of midnight, start of (date)”. This market is manipulable with a single large order in the last polygon block of the day. Polymarket can’t stop another exchange from making this dumb market, but no reason to feed it their own distribution.
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✳️ dcposch on daimo
@dcposch.eth
Polymarket is both an exchange product (for traders) and a data product (for web viewers, NYT stories, Bloomberg terminal, …) Hosting these kinds of markets caters to the most degen traders at the expense of their main value prop to the wider world. Imagine blatant -8%/+8% daily candle pairs in the election chart.
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Ansgar
@ansgar.eth
I don’t want to specifically defend these markets, not sure they are useful. But the general point is, any such inefficiency contains its own reward for fixing it. So if something like this keeps happening, someone will spend the effort to build a model to detect and immediately arb back out such manipulation.
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