ποΈ Election Market Manipulation
Polymarket is mostly fake. Also: more FTX Malfeasance; a Bitcoin play; DWF Labs' date rapist-in-residence; and more.
Election markets have emerged in the past two months as surprise stars of the 2024 election. Polymarket and now Kalshi (what?) have become practically household names, despite mixed and dubious legality in the U.S. itself. The markets themselves are super interesting, but the discourse around them has been enthralling.
Most notable has been the incredible simplemindedness with which even many media figures parroted the idea that the shifting betting odds on these platforms reflected some underlying political reality. You call something a βmarketβ in this country, and suddenly it has more credibility than any college professor.
This quasi-religious treatment of markets as Delphic Oracles holds even when the reality of any given βmarketβ is more like ten fat guys mud-wrestling in a basement. Thatβs a fair description of the reality of Polymarket - it was revealed to be dominated by a small clutch of multimillionaire βwhalesβ who had overwhelmingly placed bets on Donald Trump, driving up his odds (and driving down Trump betters potential payday). This is the core problem with taking anything on a political betting market as indicative of a deeper truth - because richer people can and will bet more, their biases will be over-represented.
Thatβs not even to say that rich people are here betting on Trump because they want him to win the actual election - though weβll get to that. Far more fundamentally, in a prediction market rich peopleβs perspectives and biases on absolutely everything will be over-represented, from now until the end of time. Politics doesnβt even enter into it. This doesnβt mean prediction markets arenβt fun or even useful, but theyβre not some miraculous technology that turns market forces into a revelation of The Truth, any more than Do Kwon can turn abstract market forces into Free Dollars.
In this case, it turns out, Polymarket has some more specific, less theoretical problems.
First, itβs quite small. As of November 1, $2.7 billion had been wagered on the election. Thatβs not nothing! But think of it this way: thatβs the total youβd get if every American bet eight bucks. Not exactly an amount that would motivate a lot of rigorous information discovery. For another comparison, $30 billion was bet on fantasy sports on FanDuel in 2022.
Oh, and Polymarket is illegal in the U.S. anyway, which whatever you might say about VPNs, would still on balance suggest some deficit in representation of what, again all things being equal, is likely the population with the best actual insight into election conditions.
Oh, and like four guys, who are maybe one guy, make up most of the Trump bets on Polymarket. Turns out heβs maybe French? Donβt we still hate those guys?
Oh, and also, Polymarket is mostly fake, at least according to a new study of publicly accessible on-chain data. On top of the whales, one-third of all the activity on the platform is reputedly wash trading - that is, in this case, paired bets that cancel each other out, so the bettor isnβt actually risking anything.
The likely motive is that Polymarket is planning an βairdropβ to its users, a briefly cool but now incredibly stupid crypto thing where platforms bribe people to use them. This inevitably leads to βairdrop farming,β aka fake use and falsely inflated metrics. Then the token shits the bed and the fake users move on. Everybody wins!
The failure of Polymarketcels to comprehend basic reality isnβt just a neutral whoopsie. Convincing people that a prediction market can actually predict would be incredibly useful to the orbit of market maximalists around Peter Thiel and similar right-libertarians. In fact, Thiel is an investor in Polymarket. Information and prediction markets are in the bundle of strange radical anti-government technocratic dreams alongside Seasteading and Balaji Srinivasanβs βNetwork State.β Theyβre part of the conceptual infrastructure of how a sort of decentralized, privatized utopia would work. Instead of a newspaper with reporters, you get a Polymarket in everything, and the information discovers itself.
One funny possible outcome here is that, with real money on the line, a lot of these market technocrats might wind up hoisted by their own petard. Wall Street investors have reportedly been using the odds on these market to guide investments ahead of the election. Regardless of the actual outcome, that means theyβre likely misallocated.
You have to be a special kind of mentally impaired to work on Wall Street and act on market indicators without understanding their inputs. But this is the all-too-human reality we live in, and itβs hard to think of a clearer example of why turning our critical faculties over to supposedly neutral, all-knowing markets is and always has been a royal road to fucking things up, badly.
My point is that markets arenβt God, and the tendency to think of them that way is a hilarious conceptual blind spot for right-wingers. This instance may wind up being painfully educational.
Capsule Review: βHappenstance: A Play about Bitcoin, Love, and Freedom.β

I was very happy last week to catch the limited run of performances of Happenstance, a play written by my former CoinDesk editor and good friend Ben Schiller. The plot is a mashup of several real-life stories, including elements of early Bitcoiner Charlie Shremβs brief prison stint and Sam Bankman-Friedβs bizarre parents. Iβm also just now noticing that the main characterβs romantic interest is named βNeumann,β a possible reference to WeWork founder Adam Neumannβs grift-perfect conjunction of spirituality and technology.
The play is solid in this first iteration, and has a clear standout in Olivia Hardinβs portrayal of βBarbara Schwagg,β a clear stand-in for Sam Bankman-Friedβs mother Barbara Fried. Though in this iteration Barbara is frantically trying to get her son on a flight to a non-extradition country before he begins a prison sentence, Hardin brings the precise aura of fragile, manic aggression exuded by the real Barbara.
Iβm told there are discussions underway to have the play produced in conjunction with future crypto events, so fingers crossed there will be more chances to see this.
DWF Labs Partner accused of Serial Date Rape
A very brave woman going by @hananotsorry on X (the everything app) went public last week with clear evidence that a crypto venture capitalist named Eugene Ng spiked her drink during a meeting in an apparent rape attempt. Subsequent accusations emerged suggesting this was a pattern, and Ng was fired. DWF Labs appeared on the scene quite recently, so this is likely to permanently shape perception of them as an organization.
FTX Prioritized VIP Withdrawals in Collapse
A new study found that βVIPβ customers, including other exchanges, were given priority for withdrawals from FTX on November 7th and 8th of 2022, as the exchange was running out of money to fulfill withdrawals.
U.S. Seeks Clawback of $13m in FTX Political Donations
The U.S. Government is apparently still in βnegotiationsβ with a group of Political Action Committees for the return of a total of $13 million in political donations from FTX executives, funded using customer money. The PACs apparently clinging to these stolen funds include Senate Majority PAC, Emilyβs List/Women Vote, and the Future Forward PAC.
At Facebook, AI Slop Isnβt a Problem - Itβs the Strategy
As reported by the always-excellent 404 Media, a recent Meta earnings call made clear that Zuck and company are very excited by the added engagement theyβre getting from brain-breaking slop like Shrimp Jesus, and theyβre doubling down.
Happenstance:
Found the website for the performance, emailed so I could read a copy of the play. Hoping for some web 3.0 way to buy it and read it, but I've yet to see a Dapp with any traction /staying power. I mean it should be braindead easy. I make an encrypted NFT. I send it to someone or they buy it. They sign in with crypto wallet to Dapp. Dapp says "On chain message plus NFT in wallet means decrypt this in browser." NFT decrypts and is visible/readable/downloadable.
DWF:
https://www.coindesk.com/business/2023/04/14/market-maker-dwf-labs-more-than-200m-in-deals-blur-what-investing-means
More about shady DWF.