Polymarket active daily users soar in January as “TikTok ban” predictions heat up

Polymarket is gaining momentum, extending its recovery from the post-election slump. The prediction market platform is rebuilding open interest but has set records for drawing in more new users.

Polymarket is entering a new stage in its development, as January is setting records for daily active users. For now, Polymarket is yet to recover the open interest from the US Presidential election market, but has retained more than 4.1M registered wallets and a growing number of daily active users. Polymarket remains a staple in crypto space, and is also seen as a go-to indicator for the most likely outcome for current events.

User count kept growing on Polymarket, on a mix of new prediction pairs and airdrop mining. | Source: Dune Analytics

The user count increased despite regional warnings for users from France and Singapore. As crypto activity shifted to the USA, Polymarket tapped predictions for current events, with significant available liquidity.

Some of the recently resolving markets include the upcoming decision on the TikTok ban in the USA. The platform also got a short-term boost, after Elon Musk followed the Polymarket handle on X.

Polymarket brings in new cohort of users

Part of the growth for Polymarket comes from wallets that never interacted with the US elections market. That prediction hinged on whale-sized bets, while newer markets trade at a lower volume.

Wallets that only interacted with other prediction pairs started taking off in October and November. Non-election wallets made up between 35% and 43% of users in the past months, adding to all other active markets such as sports and current events. The metric shows Polymarket was gaining popularity outside the election season, even before November 6, 2024.

The current inflow of users is not a generic type of activity in the hopes of receiving an airdrop. Most of the traffic was drawn to the highly liquid Superbowl winner market, which had open interest above $124M at the end of 2024.

Polymarket is still ranked #2 among Polygon POS apps, surpassed only by Moonwell. Users on Polymarket remain near their one-month high, as they move into several highly active prediction pairs.

Polymarket open interest depends on top betting pairs

In January, the market’s open interest is still the highest among all prediction pairs, running up $19M in positions for January. The success of Polymarket hinges on picking up the most appealing market pairs.

The current open interest is concentrated in about 20 pairs from different categories, including sports, politics, crypto, and current events.

Polymarket has grown its user base, but open interest remains volatile. The recovery comes from finding one market to dominate all others, as in the case of the Superbowl outcome, or bets on Joe Biden finishing his presidency.

After the bet resolves, the open interest rapidly decreases, as Polymarket users are left in search of the next liquid pair. Polymarket is testing new types of bets, recently removing the market for crypto influencers and X personalities, replacing it with bets on the number of tweets by Elon Musk.

Open interest recovered from the post-election lows, once again rising in January. | Source: Dune Analytics

Some of the predictions are also used for trading before being resolved. Smaller markets are not as suitable for trading positions as the balance of tokens shifts.

Daily trading volumes, however, have established a baseline of $35M per day, despite different betting conditions and current events. The market adapted, as users avoided the least liquid pairs that could be manipulated. The previous whales making large-scale bets are gone, as even top traders take positions under $20,000.

As of January 17, Polymarket locks in $129.68 in value, based on buying the ‘yes’ or ‘no’ tokens of prediction pairs. Some of the traffic on the market is considered organic, but there are also signs of potential wash trading.

While some of the small-scale trading can be faked, the available liquidity is not so easy to supply artificially. The wash trading may be a part of pre-emptive airdrop mining. So far, Polymarket has refused to give any hints to the parameters of the airdrop. The only mention of an upcoming token was a message to users that tried to withdraw their funds from the platform after the US elections ended. Polymarket managed to retain some of those users, and even expand their count, by setting up an expectation for an airdrop in the coming months.

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