Polymarket Resolution Report: “Will Trump win the 2020 U.S. presidential election?”
Question: “Will Trump win the 2020 U.S. presidential election?”
Description: “This is a market on if Donald Trump will win the 2020 US presidential election. This is not about the popular vote — it’s particularly about if Trump will win the election, as defined by the electoral college system, and set to still be president come next term. Market will resolve to “Yes” if Donald Trump receives the required number of electoral votes to win the presidency, whenever it is called. If Joe Biden or any other candidate is declared the winner of this election officially, this market will resolve to “No”. Note: If the election winner is not declared on election night, this market will not resolve until a winner is confirmed. The resolution source will be https://www.cnn.com/election/2020 CNN’s 2020 Election page: Additional note: in the event of conflicting sources between CNN and WSJ (https://www.wsj.com/livecoverage/campaign-wire-election-2020) or Associated Press (https://apnews.com/hub/election-2020), the market will only be resolved once there is a definitive winner. In the event of ambiguity in terms of the market outcome, the market will be resolved at the sole discretion of the Markets Integrity Committee (MIC).”
Resolution Source: https://www.cnn.com/election/2020
Market Ends On: Nov 20th, 2020
Link: https://polymarket.com/market/will-trump-win-the-2020-us-presidential-election
With the recent US Presidential Election and subsequent calling, there has been contention in regards to the resolution of the aforementioned market on Polymarket. In this post, we’ll briefly delve into: why the market is resolving to “No”, how people who still believe Trump will retain the presidency next term can maintain their upside, and how we’ll improve to avoid this in the future.
Context
First of all, every information market needs a clearly defined resolution source, as well as conditions for edge cases, in order to function properly. Without it, all market participants will argue that their side is right. We’re eminently aware of this, and have tried to meticulously draft resolution conditions for every proposed market to date with the intent of avoiding these problems. That’s worked well so far, but with this market, once election night was over, and particularly once AP, WSJ, and CNN had officially called the election for Biden (the defined resolution source was all 3 calling the same winner), it became clear that there was much more contention than anticipated.
The market was explicitly defined as resolving when the Associated Press, Wall Street Journal, and CNN, all call the same winner. That is what happened
Associated Press: https://apnews.com/article/joe-biden-wins-white-house-ap-fd58df73aa677acb74fce2a69adb71f9
Wall Street Journal: https://www.wsj.com/election-results-2020/
Dilemma
Shortly after these 3 publications called the election for Joe Biden, there was uproar in the Polymarket community from two camps:
1. People who hold “No” outcome tokens who argued that the resolution conditions outlined in the description had been explicitly met in their favor and the market should be resolved ASAP so they can redeem their respective winnings.
2. People who hold “Yes” outcome tokens, which are now effectively worthless and illiquid, who still believe Trump would be president come next term and wanted to postpone the resolution of the market for an undefined length of time.
It became a chaotic partisan argument, with people rapidly sharing their differing political beliefs as a justification for the resolution of the market in their favor. Fortunately, there is good news for both sides.
First, this market’s resolution source is explicit, and has been objectively reached successfully in favor of “No” outcome tokens, and thus those who accurately predicted this event must be able to receive their award. The market has already priced this in, but given Polymarket’s smart contract architecture and decentralized crowdfunded liquidity model, there’s no way for the winners to redeem their winnings from the smart contract until the market is resolved. Keep in mind, Polymarket is decentralized and non-custodial, meaning there is absolutely no way for the team to move or switch any user’s outcome tokens. Therefore, it is absolutely imperative that the market is swiftly resolved accordingly.
With that said, Camp 2 understood the resolution source argument, but still keenly believed Trump would come out triumphant by Inauguration Day. That sentiment was met with much disagreement by other Polymarket community members, and this argument was the driving factor behind most the unrest.
This risk and market is significantly different than a market on if Trump will win the election based on the official calling by 3 pre-defined sources, with a resolution date within proximity of election day. Some in Camp 2 pointed to the final line of the market description: “In the event of ambiguity in terms of the market outcome, the market will be resolved at the sole discretion of the Markets Integrity Committee (MIC).” This is a phrase that has been put, in similar form, at the end of every market description. In this case, the resolution sources defined as the outcome of this market are by no means ambiguous, with the Associated Press, Wall Street Journal, and CNN officially calling the election for Joe Biden, as linked above.
In the current market, this has been priced in, with “Yes” outcome tokens effectively worthless, given market price and lack of liquidity provided to the AMM. But now, demand on both sides for a new, longer term market on if Trump will be inaugurated for his second term as President of the USA come January 2021, has clearly materialized.
Solution
To solve both the problems of accurate predictors of the original market wanting to redeem their well-deserved winnings instead of waiting long past the specified resolution date, and the political pundits who believe Trump will still win, it became clear the best path forward is resolving the current Trump market accurately to “No”, as per the defined resolution source, and launching a new, longer term market: “Will Donald Trump be inaugurated for his second term as President of the USA on Inauguration Day, January 20th, 2021?”, which the same market participants can re-enter into, with comparable upside, and more accurately price the likelihood of this outcome.
Here is the link to the new market on Polymarket, please read the description and market rules carefully.
Final Thoughts and Learnings
It’s clear that for Polymarket to expand its horizons and continue producing accurate, realtime information on a wide variety of topics, we must promote awareness for following market rules, as that is always how markets will be resolved. Also, including the MIC ambiguity statement at the end of every market is clearly inferior to just writing a well-defined, unambiguous description, as anyone can always find some argument for ambiguity. Going forward, we are taking initiative to solve these problems.
If, after reading this, you still have any concerns, complaints, or feedback about this market, please let us know by filling out this form, and we will get back to you ASAP. It is a much better way to let us know than spamming our Discord.
Also, if you have any market suggestions, fill out this form to propose them.
Thank you to all the Polymarket community members for their patience the past 2 days, we are grateful for your continued support.
