Drift Predictions Market BET Attracts $3M in Liquidity at Launch, Can it Replace PolyMarket?

Drift Protocol’s eagerly anticipated prediction marketplace has finally launched, threatening the future of one of crypto’s most popular applications.

Finn Miller

Published: Aug 20, 2024 at 15:00
Edited: Nov 25, 2024 at 15:16

With the U.S. Presidential Election drawing closer, Drift Protocol has given the Solana community yet another way of trading political opinion.

After unveiling the platform in late July, Drift Protocol finally opened the doors to BET, (Bullish on EveryThing) Solana’s newest prediction market.

Drift Prediction Markets Launch With a Bang

Built on top of Drift Protocol, the BET prediction marketplace allows users to trade the outcomes of real-world events. While this is currently limited to the U.S. Presidential Election, Drift Protocol has indicated that sports and cultural events will also be added in the future.

BET launched with two markets and has attracted over 300k in open interest in the past 24 hours. Both available markets boast tight spreads, rivaling that of PolyMarket, the industry’s largest prediction marketplace. In contrast, PolyMarket’s presidential market currently plays host to $652M in bets.

Drift Protocol founder Cindy Leow was eager to share BET’s adoption statistics. Bolstering confidence in the platform, Leow is “expecting liquidity to get deeper with more MMs onboarding”.

The launch of Drift Protocol’s predictions marketplace has also boosted the platform’s TVL. Depositors can provide liquidity using over 30 different tokens, which has driven Drift Protocol’s TVL is up 17.82% on a weekly time frame based on DeFiLlama data.

Remarkably, much of this growth comes from $PYUSD deposits, which have increased by 138.68% over the last 7D, according to data provided by Drift Protocol.

mindshare heatmap

Beyond growing TVL, Drift Protocol is now also dominating perpetual DEX discussions on social media. Based on Kaito AI heatmaps, DRIFT currently accounts for over 50% of perp DEX mindshare.

DRIFT Up 30% Since BET Launch

Currently, Drift Protocol’s predictions platform only supports 2 markets, both of which are associated with the upcoming U.S. Election. However, Drift Protocol has indicated that fully permissionless markets will be available through platform governance later this year.

The prospect of permissionless markets through governance appears to have driven renewed excitement and demand toward $DRIFT, the protocol’s native token.

Drift price chart

Based on Step Finance data, $DRIFT witnessed a surge of interest following yesterday’s announcement, rising 30.31% percent in the last 24 hours.

Drift Protocol vs PolyMarket

The most popular and well-established predictions market in the crypto industry, PolyMarket has averaged over $13.75M in daily trading volume over the past 7D based on Dune Analytics data. The platform regularly witnesses over 6,000 daily users, making it one of the most popular applications on the Polygon network.

Polymarket data

Meanwhile, Drift Protocol has recorded a daily average of $5.93M in trading volume in cryptocurrency markets over the same time period, based on data provided by DeFiLlama.

Despite recording 56% less volume, Drift Protocol has averaged 1,384 daily users during the last 7D, suggesting that the average position size of Drift users is higher than PolyMarket traders.

In response to the BET launch, Polymarket has boosted its LP rewards in Presidential Election markets by 33%, raising daily rewards from $750 to $1000.

While PolyMarket is the industry’s clear leader in terms of prediction markets, Drift Protocol’s BET platform has plenty of growth potential. However, traders are currently required to deposit funds to Drift Earn to open positions, which may hinder adoption.

If Drift traders bring their liquidity and trading volumes over to prediction markets and the wider Solana community embraces BET in the same way that the crypto industry has adopted PolyMarket, we may witness a changing of the guard.