The dYdX Foundation has introduced a new derivatives product pegged to the outcome of the 2024 U.S. presidential election.
The dYdX Foundation has introduced a new derivatives product pegged to the outcome of the 2024 U.S. presidential election. The brand-new financial instrument was dubbed Trump Prediction Market Perpetuals. It allows traders to bet on how Donald Trump will fare in the ballot box on Nov. 5.
The launch of this perpetual market on the trading platform of dYdX has come after a successful community governance process, underlining the decentralized nature of decision-making processes within the crypto space. This new offering gives users a decentralized and non-custodial way to interact with one of the most anticipated political events on the world stage.
Traders who believe that Trump will win can go long; those who believe that he will lose can short it. Since the instrument is perpetual, the position is flexible: users can raise or lower their stakes depending on how election trends change. For this reason, this type of political betting is radically different from how prediction markets have worked until now.
Another interesting feature of the Trump Prediction Market Perpetuals is leverage trading. This feature will enable an individual to increase the magnitude of trading and, if correct in their political prediction, the potential return. But like any leveraged financial instrument, the possibilities for large losses are just as heightened.
A Trump victory in the decentralized prediction marketplace Polymarket is pegged to an underlying index with a maximum value of $1, which would be settled at a near-zero value of $0.00001 upon loss. Participants seek to place a bet on the market by connecting an external crypto wallet to the dYdX platform and depositing USDC stablecoin.
As the dYdX Foundation hints at the possibility of similar markets opening up based on other narrative-driven global events, this may usher in a new trend in cryptocurrency trading. The spate of international elections, sports competitions, and cultural phenomena could also form the basis for more such markets. An expansion of this nature would likely unlock a new frontier for traders seeking to capitalize on their insights into world events.
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