politics

Professor at NYU. Interested in Cryptography.

i've seen this happen a lot on open prediction election markets with substantial volume.

my theory is that there's a lot of early buyers who took the correct position, and as it starts to approach the resolution epoch, the cost/benefit of getting the last few % vs cashing out early starts to shift.

let's say i bought at 5% and now it's sitting at 85%, i already got 1700% relative returns, why risk everything for another +15% (17% relative return)?

so all of these people start cashing out, which starts a downward trend, which perpetuates for a while until it recalibrates back.

A doodler and computerer. I like permissive/permissionless open source, smart contracts, p2p systems, room-scale VR, and NixOS.

shazow.net

Currently: WhatsABI

This this this. The r/r on prediction markets, especially for multiple-choice ones, does not encourage holding until resolution.