Market with less than 1 day and the liquidity dilemma of large funds: Revealing six key findings of Polymarket

PANews in-depth analyzed the historical data of 295,000 markets on the Polymarket platform and found that the liquidity distribution in prediction markets is far more complex than imagined. These data reveal a core truth: liquidity is not evenly distributed but concentrated around a very small number of “super events.” Short-term markets with durations less than a week, although numerous in contracts, generally face liquidity exhaustion.

Markets Less Than 1 Day: The Illusory PVP Arena

Among the 295,000 prediction contracts, 67,700 markets have a cycle of less than 1 day, accounting for 22.9%. Even more surprisingly, 63.16% of these ultra-short-term markets had zero transactions in the past 24 hours. In other words, tens of thousands of short-term contracts on Polymarket are in a state of complete neglect.

This phenomenon is not unfamiliar. During the craziest times of MEME coins, millions of tokens were issued on the Solana chain, most of which were ignored or quickly failed. Today, the same story is replayed in prediction markets, but with a key difference: the lifecycle of prediction contracts is fixed (expiration and settlement), whereas the fate of MEME coins is full of uncertainty.

In these ultra-short markets, contracts with liquidity less than $100 account for more than half. They mainly focus on sports event outcomes and short-term crypto trends—events that attract capital due to their simple judgment mechanisms. However, true liquidity is concentrated in a very small number of “head” contracts. The average trading volume for sports ultra-short markets reaches $1.32 million, while for crypto it is only $44,000. This means that participants trying to arbitrage short-term crypto price movements often face the embarrassment of insufficient liquidity.

Markets Longer Than 30 Days: Institutional Capital’s Reservoir

Contrasting with the lively ultra-short markets, long-term prediction markets with durations over 30 days are relatively few, totaling only 28,700. But it is precisely these “cold” markets that attract the vast majority of institutional funds.

Data shows that the average liquidity of markets over 30 days reaches $450,000, 45 times that of markets within 1 day. This is not a coincidence but reflects the deeper logic of capital participation: large funds prefer to deploy in predictions with higher certainty and longer time horizons rather than participate in short-term quick bets.

In long-term markets, US political predictions are the most favored category. The average trading volume for these markets reaches $28.17 million, with an average liquidity of $811,000. The next most popular are “Other” categories (covering pop culture, social topics, etc.), with an average liquidity of $420,000. In crypto predictions, participants also show a long-term bias—predicting whether Bitcoin will break $150,000 by year-end or the price change of a token within a quarter. These predictions resemble simple options hedging tools rather than short-term speculation.

Sports Predictions’ Extreme Polarization: “秒殺” and “Seasonal High Stakes”

Sports predictions are the largest daily active contributor on Polymarket, with 8,698 active contracts, accounting for about 40%. However, within sports predictions, markets with different cycles show shocking polarization.

Ultra-short-term sports predictions (less than 1 day) have an average trading volume of $1.32 million, indicating a strong desire among short-term speculators for “instant results.” Medium-term predictions (7~30 days) average only $400,000, while ultra-long-term predictions (more than 30 days) surge to $16.59 million. This creates a clear “two high, one low” distribution—participants either seek the thrill of quick feedback or engage in “seasonal gambling,” showing little interest in medium-cycle predictions.

The Cold Start Dilemma of New Categories: Real Estate Predictions’ Mismatch

Theoretically, markets with high certainty and cycles longer than 30 days should be the most attractive. The US real estate prediction market fits this setting, but reality is quite the opposite. In comparison, prediction contracts for the 2028 US presidential election far surpass the entire market in trading volume and liquidity.

This reflects the “cold start dilemma” faced by new asset classes. Unlike simple and intuitive event predictions (who will win a game?), real estate market predictions require participants to have professional knowledge and market awareness. Currently, the market is still in a “strategy calibration period,” with retail investors only watching and professional players unable to find counterparties. Coupled with the inherently low volatility of real estate markets and the lack of frequent event-driven activity, speculative enthusiasm further diminishes. The result is an awkward situation where professional players have no opponents, and amateurs dare not enter.

The Truth About Liquidity: Extreme Imbalance

When divided by trading volume, “top” markets with over $10 million in liquidity number only 505 but account for 47% of total trading volume. Meanwhile, markets with trading volumes between $1,000 and $100,000 are as many as 156,000 (most of them), but only account for 7.54% of total volume.

In other words, for most prediction contracts lacking hot topics, “going online and then zeroing out” is the norm. Liquidity is not evenly distributed like sunlight but concentrated around a few super narratives. Markets below a certain liquidity threshold are destined to struggle to survive in a decentralized order book.

The Rise of Geopolitical Predictions as Dark Horses

An interesting phenomenon is emerging: although the total number of historical contracts in geopolitical prediction markets is only 2,873, the current active contracts reach 854, with an active ratio as high as 29.7%—the highest among all categories. This indicates that new geopolitical prediction contracts are rapidly increasing and have become one of the topics users care about most.

This trend reflects a deep rule of prediction markets: markets that successfully attract liquidity either provide immediate dopamine feedback (such as quick settlement of sports events) or offer deep macro strategic space (such as long-term political developments). Markets lacking narrative density, with overly long feedback cycles and insufficient volatility, are doomed to struggle for survival.

Polymarket is evolving from a “predict everything” utopia into highly specialized financial instruments. For participants, understanding the true distribution of liquidity is more critical than blindly searching for the next “hundredfold prediction”—only where liquidity is abundant can value be discovered; where liquidity is exhausted, only traps remain.