🏁Election Markets
Discover how to trade the 2024 U.S. Presidential Election outcome market spot listings for TRUMP and HARRIS using Wintermute's ERC-20 Outcome Markets on Vertex.
Last updated
Discover how to trade the 2024 U.S. Presidential Election outcome market spot listings for TRUMP and HARRIS using Wintermute's ERC-20 Outcome Markets on Vertex.
Last updated
The Election Outcome Markets on Vertex enable users to trade assets that reflect their predictions on the outcome of the 2024 U.S. Presidential Election.
Election Outcome Markets are currently available to both Arbitrum and Base users of Vertex.
The markets feature Wintermute’s tokenized candidate outcomes, represented by two ERC-20 tokens:
Donald Trump (TRUMP)
Kamala Harris (HARRIS)
Holders of the winning candidate’s token can redeem each TRUMP or HARRIS token for 1 USDC once the official election results are finalized.
The losing candidate’s token will not be redeemable.
These tokens function like standard ERC-20 tokens but can be minted and redeemed with USDC through Wintermute’s OutcomeMarket contract upon settlement.
The election outcome tokens on Vertex offer traders a unique way to express their views on the election result. This market framework is integrated directly into Vertex, allowing anyone to trade these tokens seamlessly.
The Election Outcome Markets on Vertex feature two ERC-20 tokens representing the potential winners of the election:
TRUMP
HARRIS
The tokens trade against USDC on Vertex, with prices reflecting market sentiment about each candidate’s chances of winning.
Token Price = Market’s Implied Probability: The price of a token indicates the market's belief in the likelihood of that candidate winning.
Example:
If the TRUMP token is priced at $0.55, it suggests a 55% market belief that Trump will win the election.
If the HARRIS token is priced at $0.44, it suggests a 44% market belief that Harris will win.
Total Probability: The combined price of the two tokens adds up to around $1, representing the market’s overall belief that one of the two candidates will win (with slight variations due to market dynamics).
Market Type: Spot
Quote Currency: USDC
Market Specifications: Find the spot market specifications for TRUMP and HARRIS here.
Token: Outcome ERC-20
The settlement outcomes of the TRUMP and HARRIS tokens relies on the new Edge Proofs Oracle by Chaos Labs.
The Edge Proofs Oracle allows for data integrity, ensuring that the settlement data is reliable and that the market can accurately resolve outcomes based on official election results.
Once the election result is officially determined, the winning candidate's token is redeemed at 1 USDC via the corresponding OutcomeMarket Contract, while the losing candidate's token is redeemed at 0 USDC.
A vault that receives USDC for minting the Outcome ERC-20s for either TRUMP or HARRIS. The vault holds the USDC until the final market settlement and redemption of USDC by holders of the winning candidate's token.
OutcomeMarket Contract:
TRUMPWIN Contract:
HARRISWIN Contract:
OutcomeMarket Contract:
TRUMPWIN Contract:
HARRISWIN Contract:
Example: If TRUMP wins, holders of the TRUMP token will be able to redeem each TRUMP token for 1 USDC, while HARRIS tokens will become worthless at 0 USDC.
In a potential scenario where neither candidate wins, each token can be redeemed for 0.5 USDC.
Trading Election Outcome tokens on Vertex is similar to trading other spot assets but with a focus on predicting and profiting from election outcomes:
If you believe that a candidate’s chance of winning is higher than the market’s implied probability, you can buy that candidate’s token. Purchasing the candidate’s token indicates you believe they will win the election.
Any profit derived from purchasing a candidate’s token is simply the difference between the market price at the time of purchase and the 1 USDC that each token of the winning candidate is redeemable for once the final election results settle.
Example:
If the TRUMP token is priced at $0.44, but you believe he has a 60% chance of winning, you might buy TRUMP tokens.
If Trump wins, you would receive 1 USDC per TRUMP token, making a profit based on your belief and the market price at the time of purchase.
If you already hold a candidate’s token but think the market is overestimating that candidate’s chances of winning, you can sell the token.
Example:
If you hold HARRIS tokens priced at $0.55 but believe her actual chance of winning is closer to 45%, you might sell your HARRIS tokens.
This way, if the market corrects, you can potentially buy back HARRIS tokens at a lower price or simply hold the USDC.
As traders buy and sell tokens based on their beliefs about the candidates' chances of winning, the prices of TRUMP and HARRIS tokens fluctuate.
Continuous trading adjusts these prices, creating a real-time reflection of the market consensus on the election’s outcome and implied probability.
The Market Vault Structure: Each USDC traded adds liquidity to the market’s vault pool, which accumulates all funds from speculative trades placed by traders.
Upon the election’s resolution, the market’s pool of USDC is distributed among holders of the winning token, rendering a self-settling and decentralized outcome.
Consider two traders, Alice and Bob, with opposing views on the election outcome:
Alice believes that Kamala Harris will win and buys HARRIS tokens.
Bob believes that Donald Trump will win and buys TRUMP tokens.
Both traders put their funds into the market, and as the election campaign progresses, they can trade their tokens if their views change or if they want to adjust their positions.
The price of each token moves based on the trading activity and sentiment around each candidate. If more traders think Trump is likely to win, the TRUMP token price will increase, and the HARRIS token price will decrease.
After the election, if Trump wins, TRUMP token holders (like Bob) will redeem their tokens for 1 USDC each, while HARRIS token holders (like Alice) receive 0 USDC for their tokens.
1. What happens if a token’s price reaches 1 USDC before the election?
If a token trades at 1 USDC, the market believes that the candidate represented by that token has a 100% chance of winning. However, prices may still fluctuate if sentiment changes or new information becomes available.
2. How does Vertex handle disputes or delays in election results?
Vertex relies on the Edge-Proof Oracle for resolution, which sources official data. If there is a delay in results, the market will remain open until a conclusive outcome is provided by the oracle.
3. Can I trade these tokens after the election?
No, trading will cease once the election result is officially determined, and the winning token will settle at 1 USD, while the losing token will settle at 0 USD.
4. Are there minting and redemption fees for both TRUMP and HARRIS tokens?
No, both spot markets are only subject to Vertex’s existing trading fee model, which is only 2 bps for takers.
For more details, make sure to check out Wintermute's official FAQ on the Outcome Markets listed on Vertex:
The Election Outcome Markets for TRUMP and HARRIS on Vertex provide a unique way for users to trade political predictions using a market-based mechanism.
By offering TRUMP and HARRIS tokens, traders can engage with the election's uncertainty, making trades based on their expectations of the outcome. The decentralized settlement mechanism ensures fair distribution of funds to the correct outcome, offering a transparent and efficient trading experience for election outcomes.
Risk Management: Traders should be aware of potential liquidity risks, especially closer to the election date when prices may become more volatile as market sentiment shifts rapidly.
