Introduction

Polymarket has become one of the most eye-catching successes in the cryptocurrency field this year, attracting tens of thousands of users daily and reaching hundreds of millions of dollars in monthly trading volume. As the largest blockchain-driven prediction market platform, it has shown significant advantages over centralized platforms, proving the potential of cryptocurrencies in innovation.

Last week, the Chain Times team had the honor of interviewing Domer, who is also known as "JustKen" on the Polymarket leaderboard. Domer is the highest trading volume and profit trader on Polymarket to date. He has participated in trading in more than 5,000 markets, with a total trading volume close to $300 million. Domer has unique insights into the prediction market and political betting fields.

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In the interview, Domer talked about his professional background, trading framework in prediction markets, trading psychology, and more.

Are you the most profitable trader in Polymarket history. Have you noticed anyone overly copying your trades, trading against you, or wanting to be your teammate or opponent?

"Regarding copy trading, the answer is yes, but then very quickly no. I have made a lot of trades and lost a lot of money. I have a very high risk tolerance and a large capital reserve. So many people will copy my trades, but once they lose money, they give up. As of my current career, I may have lost more times than I have made a profit, but I have made more money than I have lost. I leave it to you to think about the reason.

As for teammates - I have received a lot of 'ulterior motives' advice and many private messages. I have a core circle of trust and communicate with them. Most people may think I am trading alone, but in fact, I almost constantly discuss my trading strategies with others to test them. I am smart, but not always smart, and I am definitely not the smartest person, so it is very important to talk to smart people and get realistic feedback. As a profession, betting is a 'ronin' way of survival. But you also need to communicate with other 'ronin', otherwise your career will not last long. Haha."

In your post about EIGEN transferability, you mentioned that you have been buying at 20 cents because you think the probability is close to 50/50. Can you explain how you came to this conclusion? Is it purely a qualitative judgment, or are you also considering other more specific data in your mind?"I believe betting can be seen as a process. They usually start with a hunch. I make a lot of small, intuitive bets. But when you're moving to larger bets, you need to rely on far more factors than just intuition, and sometimes you don't have much time to prepare. In that situation, I spent a lot of time researching the possible scenarios that CZ (Changpeng Zhao) might face. I also communicated with some experts in related fields. After the research, I thought he would be released from prison in early October.

But what you're researching is often unprecedented. CZ might be the richest person ever to serve time in prison in the history of the world (at least I think so). You can't simply compare him to a Jimmy Walnuts who was arrested for defrauding a local laundromat of $500; the situations they face in the criminal justice system are completely different. So it's a very imprecise 'science'. In the end, he went to jail a week earlier than I expected, so he was released a few days before the outcome of the EIGEN event, and I lost that bet. But I think it was a very good bet, even though I lost in the end."

For large positions, liquidity can be both an opportunity and a limiting condition. Does the liquidity of Polymarket's markets affect your trading decisions? If so, how specifically does it affect them? Have you ever encountered challenges in entering or exiting a position due to liquidity constraints?

"Liquidity is interesting; I guess I don't think about it much now unless in specific situations.

Regarding exiting positions—if you think of betting as a sliding scale, for small, intuitive bets, I don't care about liquidity. And for large bets that have been deeply researched, I don't consider how to exit, so I also don't pay attention to liquidity. Liquidity might affect those medium-sized bets that fall in between. In this case, I might think I have some advantage, but I'm not quite sure, and if liquidity is low, I might hesitate to invest too much. If new information emerges, you might get stuck in a low-liquidity market. So the answer is 'it depends'.

As for entering positions—I suppose everyone would like to have unlimited liquidity when building a position, haha. Yes, almost every trade I want to make encounters the challenge of insufficient liquidity. But I also have to say that high liquidity can be a bad thing because it might tempt you to invest too much just because you 'can bet'. So be careful, high liquidity might lure you into over-trading. I might also have bet too much because of high liquidity."

It seems you make hundreds or even thousands of trades a day. How much of your trading is automated versus manual?

"Nobody believes me, but all of my trades are manual. I have a lot of orders on the books, so most of the trades are my orders being matched, not me entering new trades."

You trade in multiple forecasting categories, from politics to macroeconomics. Have you found certain types of markets to be more predictable or profitable than others? How do your strategies differ between different categories?

"This is a good question. I probably should figure this out. Although I have a vague understanding of the categories I'm good at, overall, I like to focus on the world, so I like to bet on various events. I also like new things markets that I'm not familiar with. Because if I'm not familiar with a field, it's almost certain that others are not familiar with it either. So we all start from limited knowledge and see who can understand it best. It's a bit like a combination of competition and puzzle-solving."Just to interject for a moment, when it comes to people's 'familiarity' with things, I've noticed that super theme experts sometimes perform terribly when predicting their own areas of expertise. This is because they overvalue their own expertise.

For traders who have dabbled in stocks, options, or cryptocurrencies but have never traded binary event contracts, what advice do you have? How would you explain your Polymarket strategy to a beginner?

"Firstly, give it a try. Deposit $10 or $100, or whatever amount you wish to deposit. The worst outcome is that you have fun or get excited and then lose all your money. If that's the worst outcome, it's really no big deal, haha.

Secondly, I'd like to say that you're not forced to predict any market or bet on anything. Just because everyone is betting on the presidential election doesn't mean you have to participate. There are now hundreds of markets on the website covering various topics. Find something you think you might have an advantage in. Try to look for an edge. If you find one, great, bet on it! If not, that's okay too, you don't have to do anything, you can look at other markets.

If you don't see any markets you like, but you have an interesting idea you want to bet on? You can go to Discord and ask if they can open a related market.

As for strategy, I would say the loose guiding principle for what you should bet on is: you want to bet based on your edge. If you haven't found an edge, don't bet unless it's for fun (like betting on a game). If you find an edge but aren't sure if it's valid, then bet a little. If you find something you think is a significant edge, then bet a lot. This may sound simple and stupid, but it's a powerful and important concept. Many people bet too much when they don't have an edge."

What are your thoughts on non-blockchain trading platforms like Kalshi or PredictIt? Would you use them, or is most of your trading volume on Polymarket? Do you often look for arbitrage opportunities between the same event in different markets?

"I have used Kalshi and PredictIt before and would recommend them! But I don't use them much now because Polymarket has grown so much that it has become a full-fledged adventure.

I do look for arbitrage opportunities often, but many people do this too, and these opportunities can close quickly these days.

When arbitraging, you must be careful to ensure there are no very subtle and slight differences between the markets, so you could theoretically lose both bets."Forecasting markets like Polymarket are gaining popularity, especially in predicting significant political and economic events. Looking ahead, how do you see these markets evolving? Do you think they will become influential enough to genuinely impact real-world outcomes, rather than just predict them?

"I believe these markets will become an important category of financial contracts, referenced and cited to a degree that is actually normal and not a big deal. On Polymarket, there is a largest market that doesn't get much attention, and that is the actions of the Federal Reserve. These markets now trade in the tens of millions because it is both highly unpredictable and extremely important. Financial markets already have a 'forecasting market' in this regard, which is often cited in the mass media—namely CME (and their FedWatch charts). You will see these numbers on financial networks and in news articles. What you don't often hear about (but this will change) are the predictions on sites like Polymarket and Kalshi. The traders in these markets are more accurate than CME. Yes, amateurs outperform professionals. Accuracy is key in forecasting, so you will see references in the media evolve over time to reflect this.

As for impacting real-world events, I think that's a more philosophical question. Personally, coming from a poker background, one principle of poker is 'don't knock the glass.' If there is a bad player, a fish, at the table, you don't tell him he's a fish, or else he might change his behavior (like leaving or learning more). In this sense, I am reluctant to try to influence events to resolve the market. I think there should be a wall between the two. As for whether it is realistically not impacting world events, I don't know. The tail might start wagging the dog."

What is your current favorite overlooked contract on Polymarket? Why? What new markets need to go live as soon as possible?

"If there is an overlooked contract, I would probably try to quietly buy as many shares as possible, so I won't share that information (and there is indeed such a market right now!). But I can give you an evasive answer:

I think people are taking the assumption that the US elections will be close for granted. I believe a smart trader can find opportunities to go against this 'it's going to be very close!' conventional wisdom, and make a killing if Trump or Kamala wins by an unexpected large margin. Although media coverage may not present such a scenario, it is a realistic outcome."

People constantly debate whether projects really need to launch their own tokens, despite the obvious profit temptation of Token Generation Events (TGEs). In your view, would a native token improve the user experience on Polymarket? What would become easier? What would become more difficult?

"This might offend some people, but I am not a big fan of cryptocurrencies. At least not for now. I feel that a lot of the potential of cryptocurrencies is not really utilizing blockchain/ledger technology. Many cryptocurrencies are unfortunately filled with various hype, scams, and hacks, with people trying to make quick money. I have spoken to two people who have gone to jail for ridiculous crypto crimes. I loosely follow airdrops (because these are popular markets on Polymarket!), but it's very unclear why many projects have tokens, haha. I won't name names!

Against the backdrop of my skepticism about cryptocurrencies and airdrops, I would like to say that I strongly support Polymarket launching a token. This is not because I am biased! Let me explain."I believe the potential of cryptocurrency is exemplified in Polymarket. What you have is the world's largest prediction market, built on smart contracts with all transactions occurring on-chain. Your funds are not sent to a company but are instead held in a wallet that you control. The solution is decentralized (well, mostly, I'll touch on this again). All of this is a big deal, and in my view, Polymarket represents a massive innovation on multiple fronts. I may be biased, but I think it's the first killer app built on blockchain.

If someone asks me whether they should get involved with cryptocurrency, I might respond with "Which part of cryptocurrency?" and "...are you sure?" But if someone asks me whether they should get involved with Polymarket, I would answer, "Yes, and I'll help you get started!"

As for why this token is a good thing, it's because this prediction market has thousands of markets that need resolution. As I mentioned earlier, 99.5% of the resolutions are simple, but sometimes they can be confusing and difficult. Token holders with a stake in Polymarket's success should be the ones deciding on the resolution of ambiguous markets. Currently, UMA is responsible for voting on disputes, and in my view, their interests are somewhat aligned with Polymarket's, but not entirely. If the interests are not perfectly aligned, the voters themselves may become disinterested. And they are, disappointingly disinterested. UMA's token ownership is also somewhat centralized, so only a few individuals are deciding on these disputes. This undermines what should be a fully decentralized exchange. A token that helps to smoothly resolve the dispute process would solve many issues. If Polymarket is a killer app, then the killer feature needed is the dispute resolution process.

I see you've listed a book by Kahneman in your recommended reading list—Heuristics, risk/loss aversion psychology, and dual-system thinking all play significant roles in betting. How do you think Kahneman would view Polymarket? Which of his teachings always come to your mind?

"I think about the biases written about by Kahneman and Tversky every day, and I'm not exaggerating. Their findings are simple, somewhat obvious to a degree, but also profound and important. Some concepts I often ponder—price anchoring, endowment effect, loss aversion, availability bias, and many more. If you want to be a top trader or bettor, you should have a deep understanding of the biases that try to control your brain.

Daniel Kahneman would love Polymarket. He is an advocate for prediction markets.

I want to conclude by saying that escaping biases is difficult; biases must always be in your consciousness to protect yourself from losses. I like to say (and I believe) that making money in prediction markets is easy. The future is unpredictable, but not that unpredictable. You can easily find markets where you can make money. But the truly difficult part in prediction markets is avoiding losing a lot of money on foolish things. Because while making money in prediction markets is easy, losing money is even easier. Read Kahneman and Tversky's books to try to avoid some pitfalls, as many foolish bets only appear foolish to traders in hindsight. And this is not necessarily hindsight bias!"