Leveraged trading for Polymarket prediction markets arrive to subdued initial open interest

Early adoption of D8X’s leveraged prediction markets showcases the challenge of attracting users from established spot markets.

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Leveraged Prediction Markets for Polymarket betting have gone live on Polygon mainnet through the D8X exchange. Front ends such as FreelyPerps, OctoFi, and DefiSaint allow traders to interact with the markets through their crypto wallets. Users can place leveraged bets on events like the 2024 U.S. presidential election, where the current mark price for Donald Trump to win is 0.4893 with an open interest of 30 TRUMP24 contracts.

Another available market is the San Francisco 49ers winning the Super Bowl in 2025, featuring a mark price of 0.1062 and an open interest of 10 SUPBWL49 contracts. The modest open interest, with a maximum leverage level of 2x, contrasts with the $1 billion in volume in the Polymarket spot market.

Other protocols, such as SynFutures, dYdX, and Injective, are also reportedly launching or planning leveraged prediction market products. SynFutures launched its leveraged prediction markets earlier this month and has acquired 24,700 Trump contracts to date. The funding rate is -0.0100%, but there has been just $245 in volume over the past 24 hours.

The potential opportunity for prediction market derivatives is obvious due to Polymarket’s 2024 success. However, the question remains as to whether the accessible user experience of Polymarket’s platform is driving the growth or the nature of the markets themselves. The future of the derivatives side of this market will rely on being able to entice users to migrate away from Polymarket’s front end.

What is D8X exchange?

D8X, an institutional-grade decentralized exchange for derivatives, addresses the challenge of managing risk in prediction markets—which resolve to either 0 or 1 depending on the outcome—by employing a system of dynamic leverage, fees, and slippage. This approach ensures system stability from a risk perspective.

“Our Leveraged Prediction Markets are an entirely new product. We are huge fans of Polymarket and are thrilled to offer users the opportunity to place their bets with leverage,” said Caspar Sauter, co-founder of D8X. “Leverage enables D8X users to maximize their potential earnings while maintaining control over their level of risk.”

The new product utilizes Polymarket spot feeds as input. Markets available at launch include whether “Inside Out 2” will be the highest-grossing film in 2024 and if Tim Walz will be the Democratic nominee for vice president on Election Day. Future plans involve incorporating all Polymarket feeds across sectors like sports, politics, pop culture, business, and science.

However, non-political markets appear to be even less popular in derivative markets than their spot counterparts, with the Inside Out 2 market yet to attract a single contract as of press time. Polymarket has seen considerable success through betting on the US election, while other markets have failed to come close.

To facilitate these markets, D8X has integrated feeds from Stork Lab’s Open Data Market. Stork’s oracle provides ultra-low-latency trading data, essential for real-time prediction markets. “Stork is the only major provider of real-time prediction market feeds,” said Meredith Pitkoff, co-founder of Stork Labs. “D8X’s new Leveraged Prediction Markets are an exciting opportunity to showcase how Stork is reimagining pricing oracles by providing fully customizable, high-quality data.”

Leveraged prediction markets through D8X

D8X’s system automatically adjusts leverage, fees, and slippage based on market conditions. Maximum leverage decreases when uncertainty is highest—that is, when outcome probabilities approach 50%. Higher uncertainty leads to higher fees, and trades in the direction of market skew incur additional costs. The platform also features dynamic slippage tailored to current market dynamics.

Initially available on D8X front ends on Arbitrum, the Leveraged Prediction Markets will roll out to Polygon zkEVM and X Layer. The platform’s on-chain trading engine accepts any ERC-20 token as collateral, including liquid restaking tokens, highlighting its flexibility.

Since its launch on Polygon zkEVM in February, D8X expanded to X Layer in May and Arbitrum in June. The platform plans to introduce the $D8X token within the next two quarters. A successful pre-seed funding round raised $1.5 million, with participation from Polygon Ventures, Axelar, Swissborg, Decima Fund, HV Capital, Cogitent Ventures, Veris Ventures, Pragma Ventures, CryptoDiscover, and others.

D8X aims to build “incorruptible financial machines” usable by anyone, including traditional financial institutions. The platform serves as a white-label engine for managing perpetual futures markets on-chain.

Mentioned in this article