The Anatomy of a Blockchain Prediction Market: Polymarket in the 2024 U.S. Presidential Election

Abstract

Using on-chain Polygon data, we analyze Polymarket's 2024 U.S. Presidential Election market and develop a transaction-level accounting framework with two components: a volume decomposition that separates exchange-equivalent turnover from share minting and burning, and trader-level disagreement measures. Naive aggregation reports $958M of October Trump-market volume, compared with $391M under our decomposition. Market quality improved as arbitrage-deviation half-lives fell from hours to under a minute and Kyle's λ dropped from 0.53 to 0.01. During October's large-account episode, capital flowed into both sides simultaneously, consistent with heterogeneous-beliefs trading rather than one-sided manipulation. The framework generalizes to other tokenized prediction markets.