The Anatomy of Polymarket: Evidence from the 2024 Presidential Election

This paper provides a comprehensive transaction-level analysis of Polymarket's 2024 U.S. Presidential Election market using complete on-chain data from the Polygon blockchain. Because blockchain-based prediction markets involve heterogeneous trade mechanisms: share minting, burning, and conversion alongside conventional exchange, naive aggregation of on-chain flows can misrepresent actual trading volume. To address this, we develop a volume decomposition that yields three complementary measures of market activity: exchange-equivalent trading volume, net inflow, and gross market activity. Applying this framework, we document three key episodes that shaped the market: Biden's withdrawal, the September presidential debate, and the emergence of whale traders in October. As trading volume grew, arbitrage deviations narrowed, Kyle's $\lambda$ declined by more than an order of magnitude, and cross-market participation broadened, painting a consistent picture of a market that matured over its ten-month life.