Final ballots will be cast on Nov. 5, but Coplan’s site—which is a prediction market that invites users to bet money on a given outcome—has already foreshadowed some major developments in the election. Those include Polymarket predicting President Joe Biden dropping out and Donald Trump selecting JD Vance as his running mate. The site’s reputation has grown to such a degree that Silver himself agreed to join the company as an adviser.

Not everyone, though, is convinced that Polymarket, which has raised $70 million and whose odds on Sunday favored Donald Trump by 54% (down from 65% last week) is a reliable election barometer. Skeptics point out that the bettors on the site are not representative of the American public and, more seriously, that a large percentage of transactions on Polymarket are fake “wash trades.”

So far, Polymarket’s creator has mostly stayed out of the limelight even as he runs one of the most influential sites in contemporary politics. But that is likely to change in coming weeks as the outcome of the race either cements Coplan’s status as a leading election oracle—or exposes him as a flash in the pan.

This is an updated version of this story, which originally published July 31, 2024.

A crypto protégé comes of age

Coplan grew up in New York City and his appearance and demeanor is closer to an alt-rock band member than a pencil-twirling political nerd. At a dinner party in Manhattan earlier this year, Coplan arrived in jeans and a leather jacket. He had come at the behest of a venture capital firm that had convened startups in its portfolio to network and meet members of the media. Coplan was easy to spot by the unruly basket of curls framing his head, and a casual demeanor that set him apart from the other founders.

While venture capitalists like to say they don’t have a favorite child among their portfolio companies, the organizer discreetly identified “the Polymarket guy” as the one most worth meeting. Coplan, however, appeared in no rush to make the rounds and, after some polite conversing, he left during the main course, apologetically telling the table he had to get to a concert in Brooklyn.

New York is a place Coplan knows well. He was raised on the Upper West Side by his mother and attended public school in Hell’s Kitchen near the theater district. As a teenager, he learned to code and, according to crypto lore, became the youngest participant in the initial sale of Ethereum in 2014—a time when the token, which trades for around $2,400 in early November 2024, could be purchased for 30 cents. Coplan would go on to pursue a computer science degree at New York University, but then leave before graduating in order to pursue a growing obsession: crypto and prediction markets.

“He wants to be able to talk about it forever. This is his life. He lives it,” says Rob Hadick, a partner at the venture capital firm Dragonfly, one of Polymarket’s investors. He added that, at an initial meeting, Coplan eschewed a formal pitch in a conference room and instead proposed a walk, which turned into a two-hour stroll around New York, during which Coplan talked Hadick’s ear off about prediction markets.

As books like The Wisdom of Crowds explain, using collective predictions to determine the likelihood of future events is often more reliable than consulting experts. The concept is hardly new, and indeed variations of it—including market-based prediction markets—have been around for centuries. And while there are other online betting platforms like Ireland’s Paddy Power, which lets users wager on everything from sports to politics, Coplan says Polymarket is different.

“It’s much more categorized as a derivatives platform, where the pricing of such derivatives becomes invaluable real-time info,” Coplan said by text message—pointing to the fact that odds are determined on a continuous basis by a pool of bettors, rather than by a centralized oddsmaker. (Polymarket is also notable for settling and paying out wagers using smart contracts—specifically via a sub-layer of the Ethereum blockchain known as Polygon.)

In recent months, Coplan has had the opportunity to talk up the benefits of his site directly with politicians, including at a breakfast with Florida Gov. Ron DeSantis. In July, he also posted a retweet that shows images from the site displayed around RNC headquarters—but so far has been careful not to reveal his own political leanings.

Asked for a formal interview—something he has not done since 2020 when Polymarket first came to attention—Coplan politely demurs, citing a busy schedule.

Coplan’s online footprint is a shallow one. There are a handful of pictures online showing a 20-year-old Coplan, sans curls, addressing a crypto gathering and partaking in a boat cruise at the Bitcoin Miami conference in 2018.

And while he has proved adept at avoiding media scrutiny, he may not be able to do so much longer in light of recent evidence that not everything on Polymarket is what it seems.

Betting on an uncertain future

Most people are familiar with online betting sites, including U.S. ones for sports betting or overseas ones that let punters wager on everything from elections to probability of aliens landing. Polymarket offers all these bets too, but under the hood it works very differently.

Instead of a central oddsmaker, the probability of a given event is determined by Polymarket users who can buy “shares” in a given outcome. For instance, on Oct. 31, those who think Donald Trump will win every swing state could pay 26 cents, and if that comes to pass, the value of their contract will rise to $1. (If it doesn’t by election time, it will drop to zero). And, of course, the price will fluctuate in response to news events.

In theory, prediction markets like Polymarket are more reliable than polls because people have a financial income in the outcome, which gives them an incentive to be as accurate and truthful as they can. The trouble is that not all the bets on the site are on the level.

A recent investigation by Fortune drew on blockchain data to reveal that around a third or more of the bets on Polymarket are in fact “wash trades”—a term that describes someone surreptitiously taking both sides of a trade. Doing so can manipulate markets by creating an artificial sense of trading volume or momentum in a given direction. This obviously has big implications concerning the integrity of Polymarket’s betting odds, and for the political process more generally. Polymarket declined to comment on the findings.

As for how it plans to make money, Polymarket has resisted tapping into the most obvious source of potential revenue: taking a cut of the wagers on the site. Instead, its evolving business model—which includes a forthcoming feature that will let users pay with credit cards instead of just crypto—appears to involve a media, and possibly a consulting, operation. Semafor reported that Polymarket is in the process of rolling out a series of newsletters, while also pairing with major media outlets that will include its data in their coverage (charts from the site have already turned up in the Wall Street Journal). The company has not disclosed how much, if any, revenue it will earn from these ventures.

There is also the potential for Polymarket to charge for given bets to appear on its sites. Currently, the company fields suggestions on its Discord platform, and then informs its community which ones will be added. Some of the most recent additions include whether the AP will call certain states by 8 p.m. and whether Israel will strike Iran’s nuclear facilities by the end of the year. For now, though, there is no indication Polymarket plans to let companies pay to list a bet.

Polymarket shares as the hottest bet of all?

Polymarket is not the first site of its kind. Earlier crypto projects like Augur and Gnosis likewise offered a decentralized betting platform, but they never got traction. Polymarket, by contrast, has become a fixture of political Twitter and, according to Nick Tomaino—whose venture fund 1confirmation has invested in all of these projects—is the go-to site for 85% of all online wagers on the outcome of the U.S. presidential election.

The site’s rapid growth—it attracted a record 42,000 bettors on July 1, up from 4,000 in January—is perhaps surprising given that bettors in the U.S., where wagers on elections are illegal, are barred from using the platform, and that Polymarket requires users to connect a crypto wallet and pay using the USDC stablecoin. These barriers also raise the question of whether Polymarket bettors—who are mostly non-Americans steeped in crypto culture—can offer reliable predictions of U.S. election events.

Tomaino acknowledges that it would result in a better sample if Americans could participate, but says Polymarket nonetheless offers a very strong signal. This is because, like other prediction markets, it reflects not just the “wisdom of crowds” but is based on a group of people with a financial stake in an outcome, and who are likely to be more knowledgeable.

In assessing Polymarket and betting markets of all sorts, it’s also useful to recall that the probable outcomes they display are just that—probabilities. In 2016, most pollsters and betting sites said that Hillary Clinton had a 75% to 85% chance of victory. The fact that she lost does not discredit those predictions, but rather reflects there was a smaller—but very real—probability that Donald Trump would win, and that is the probability that materialized.

Polymarket is not just an intriguing new fixture of the U.S. election scene. It is also a hot startup whose $70 million raised so far, including a $45 million funding round in May, comes from influential investors. They include not only crypto royalty including Ethereum creator Vitalik Buterin and early Coinbase employees, but also prominent venture capitalists such as Peter Thiel.

Still, it remains unclear how exactly Polymarket intends to make money. According to Tomaino, the site’s revenue is currently “very low” even as it pays for overhead like an office in New York City and a staff of somewhere between 25 and 30.

And Polymarket’s biggest challenge may be persuading regulators to let it operate in the U.S. at all. In 2010, the Commodity Futures Trading Commission, pursuant to the financial reform law known as Dodd-Frank, banned derivatives or so-called event contracts that involve terrorism and other illegal activities, including “gaming.” While the CFTC—which fined Polymarket $1.2 million in 2021 for operating in the U.S.—didn’t define gaming at the time, it is currently crafting new regulations to explicitly ban election wagers.

The investor Tomaino is unfazed by all this. He views concerns that election wagers could corrupt the political process as misguided, noting that such wagers have provided insight for over a century and that super PACs—which allow anonymous donors to spend millions of dollars on behalf of candidates—would seem to be a bigger threat to election integrity. As for Coplan, Tomaino says, he will likely become more visible in coming months. But for now he is “just head-down focused on the product.”