While drawing in new users may not pose a significant challenge for the crypto industry, ensuring their continued activity after the first month is considerably tougher, as highlighted by data from prediction markets.
Retention data from Polymarket, put together by analytics firm Dune and market maker Keyrock, monitored monthly cohorts of newly active users and assessed how many returned to trade in subsequent months.
The findings revealed that, sampling 275 crypto projects across networks, decentralized finance (DeFi) platforms, wallets, and trading apps, Polymarket’s average retention surpassed that of over 85% of other protocols.
This data underscores the rarity of sustained engagement within the crypto sector. In markets reliant on regular participation for liquidity, poor retention may indicate minimal growth.
Why crypto platforms venture into prediction markets
Prediction markets present a structure distinct from standard crypto applications. Engagement is tied to actual events such as elections, sports contests, and macroeconomic announcements, providing consistent incentives for users to return.
The event-based cycle encourages more frequent participation than mere short-term speculation, decreasing dependence on incentives to maintain trading momentum.
This trend may elucidate why a number of prominent crypto platforms are increasingly exploring prediction market integrations.
Crypto entities experiencing difficulties in sustaining user engagement beyond periods of high volatility might have pursued functionalities that promote habitual usage over one-off transactions.
Related: CFTC grants prediction markets flexibility on data and record-keeping requirements
Crypto entities delve into prediction markets
Crypto exchanges Coinbase and Gemini, wallet provider Phantom, and clearing firm Bitnomial Clearinghouse are among the crypto players that indicated their foray into the prediction markets space in December.
On Friday, Bloomberg reported that Coinbase plans to introduce tokenized equities alongside prediction markets. This news followed a post from tech researcher Jane Manchun Wong, who shared purported leaks of the exchange’s prediction markets platform.
On Saturday, Bitnomial obtained approval from the US Commodity Futures Trading Commission (CFTC) to launch prediction markets and offer clearing services for other platforms.
On Tuesday, crypto exchange Gemini unveiled an in-house prediction market operational in all 50 states across the United States. The company aims to create a comprehensive user app, allowing participation in both crypto trading and prediction markets.
Magazine: Sei wallets in Xiaomi, Bhutan’s gold on Solana: Asia Express
