The phenomenon of information arbitrage on Polymarket

An interesting phenomenon is that many pools on Polymarket hide opportunities for information arbitrage. Some odds have not been fully digested and are clearly lagging behind market news.

Especially in the case of air drops, even if you don't end up getting it, you can still benefit from the expected difference, with a reasonable level of certainty—taking Taiko as an example, founder Daniel Wang indicated in an exclusive interview last March:

"We will launch the mainnet in the first half of this year, and there is a specific time internally, but we don't want to say it publicly yet. Initial liquidity will be activated quickly after the mainnet launch, including air drops, but the specific date is not set, but it will be around May or June." This statement actually released a relatively clear time signal.

At that time, there was only about a 2-month window for "May or June," and it was the founder's own confirmation during the interview, which can almost be considered a high-probability event (over 80%). However, on Polymarket, the probability of a "Yes" for Taiko's Airdrop before June 30 was once only 45%.

Why is this the case? It may be because most people did not see the interview content, or it may take time for information to go from being publicly available to widely recognized—just like when we usually browse the news, an important piece of news often takes several hours or even days to truly influence people's judgments.

In other words, if you had bet "Yes" at that time, even if you did not get it in the end, you could still benefit from the expected difference, and if it eventually happened, it would mean gaining from 45% to 100% within 2 months, which is a very noteworthy type of event arbitrage.

Not only this type of project dynamics, but also recently, events with relatively high certainty in the real world, such as Lee Jae-myung's win rate, are similar. Regular tracking is a good observation and gaming window.