Two Ethereum-based prediction markets on crypto exchange FTX saw activity reach record levels yesterday as the US elections went underway.
Millions of dollars changed hands for TRUMP and BIDEN, two ERC20 tokens that represent Donald Trump and Joe Biden respectively, allowing traders to go long/short on their picks for the next US president.30) about 20m contracts have traded on FTX today between TRUMP, BIDEN, and tokens.https://t.co/FzWX2goXbo — SBF (@SBF_Alameda) November 4, 2020
At press time on Wednesday, TRUMP tokens posted near 100% gains and rose over 300% from June. On the other hand, BIDEN dropped nearly 50% as the odds went against Biden’s favor.How do presidential crypto bets work?
As a futures contract, TRUMP expires at $1 if Donald Trump wins the 2020 US presidential general election, and $0 otherwise. Settlements are made after the results of today’s US election are out in the coming days, with the candidate garnering 270 electoral votes elected the US president.
On its website, FTX notes that ignoring fees, inefficiency, and spread, the price of such tokens is equivalent to the candidate’s expected chances of winning/reelection. For eg, as TRUMP trades at $0.72 at press time, traders are placing a 72% chance of Trump’s reelection — in line with other betting markets like Bet365.“TRUMP” market on FTX. The token has jumped over 100% since yesterday. Image: TradingView
The Hong Kong exchange also increased the margin requirements for TRUMP earlier this week, as both demands grew and the elections came close.
Candidates earlier in the presidential race, such as Michael Bloomberg (BLOOMBERG) and Elizabeth Warren (WARREN) had similar tokens that represented the odds of them winning earlier this year, which have since expired as they dropped out.The race so far
Meanwhile, the presidential race is at loggerheads with neither candidate securing the 270 electoral college votes needed to claim victory...