Introduction

Gambling is one of the oldest, yet most relevant usecases for Crypto. Enabling both anonimity and provably fair odds, Crypto is highly relevant for the gambling industry, and the popularity of 'GambleFi' has increased exponentially over the last few months with the success of companies like Stake and Rollbit. Platforms as these turn over millions of dollars every day, as users often prefer the use of Crypto to fund gambling, highlighting aspects as speed, anonimity and fairness as key advantages. More recently, Gambling in DeFi has evolved to the concept of Prediction Markets, which are effectively exchanges, where people buy 'stakes' or 'contracts' in certain outcomes of Real World Events, such as elections, earnings or awards. One of the most popular Prediction Market platforms are Kalshi and Polymarket, which have seen especially remarkable rises. These platforms allow users bet on the outcome of real world events (i.e. the outcome of the next US presidential elections). Polymarket allows users to buy and sell 'shares' of real world events. As an example - punters buy a 'yes' share if they believe Donald Trump will end the war in Ukraine before a certain date. If Trump then indeed proceeds to negotiate a peace agreement, the 'yes' shares will be cashed out and you the investor makes a profit. The buyers of 'no' shares in this case, lose their money. Uniquely, investors can cash out their bets before settlement, potentially benefitting from increasing odds/chances of the likelihood of the event.~ Polymarket's concept, which effectively combines the GambleFi and 'Real World Assets' concepts, is highly popular, and has driven the introduction of several other platforms, such as Kalshi and Limitless. Polymarket in specific, has raised $45 million from investors such as Peter Thiel, and recently raised $2bn from the NYSE parent, highlighting the immense momentum of prediction market platforms. Gamifying gambling, and introducing the aspect of 'shares' versus 'bets', has thus drawn the attraction of both retail and institutional investors. Moreover, the events which you can bet on have the potential to go viral, as highlighted by the moment Polymarket punters bet on the winner of the Nobel Peace prize. At the same time, the novelty of prediction markets and the rise of different platforms, comes with challenges. First, liquidity in these markets can be low, and easily manipulated. For example, markets with low volume and liquidity can be heavily influenced by big buys, and malicious actors can use this to their advantage to make people think something looks like a sure bet. Moreover, different platforms can have different odds, creating opportunities for cross-platform arbitrage, if done correctly and timely. Furthermore, with a variety of different platforms now available, users have to navigate, make wallets and execute on different websites and through different protocols, to find the best odds. Lastly, these platforms lack the ease-of-use and professional trading environment compared to DEXs.

Besides Prediction Markets, the most popular new trend in Crypto in 2025 has undoubtly been perpetual decentralized exchanges, where users can use leverage to buy tokens, to potentially amplify their returns. At the forefront of this revolution has been Hyperliquid, a decentralized L1 protocol that enables the use of leverage through their 'Vaults' concept. This Vault is essentially a community-financed 'pile of money', that engages in Market Making and thus takes the other side of your trades if there is not on-chain counterparty. It therefore serves as a 'liquidity provider' and this Vault helps keep the leveraged perpetuals market going and working efficiently. This concept of Vaults is unique, and we believe it can be implemented in the Prediction Markets environment to add liquidity to markets and enable leveraged trading. The paragraphs above have elaborated on Prediction Markets and Decentralized Perpetual Exchanges and introduced a few challenges, from which Polyliquid was born. These challenges, which forms the basis of our project, are detailed below.

• Liquidity in Prediction Markets is low and Markets are often easily manipulated

• Arbitrage opportunities are ample across platforms

• The rise of different platforms has driven a need for an aggregator

• Increasing popularity (and competition) asks for a professional trading environment

• Copytrading on Prediction Markets is impossible or barely accessible

• There are no currently available (reliable) ways to use leverage on Prediction Markets

The above challenges/problems have inspired us to create Polyliquid. Our key feautures are introduced in the next platform.