Ally Zach
@0xallyzach
1.2K Following 5.3K Followers
In Polymarket’s 5-minute crypto markets, week-4 wallet retention falls to just 20.5%
But trade activity holds up better
The cohort is still making ~39% as many trades as it did in week 1.
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Super excited to release the study with @0xallyzach on the microstructure of Short-term Crypto Markets, where we cover an overview on the growth momentum & economics on both @Kalshi and @Polymarket, plus a deep dive into Polymarket’s user segments and 🕵🏻♂️ potential market manipulation:
This is a "MEV" strategy that no one has called out lout til now (which allegedly long-existed in option trading) —
Some traders appear to have figured out how to influence the closing price of Polymarket’s 5-minute BTC Up/Down markets while betting and profiting. 👇🧵
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Binance is arguably the world's largest crypto exchange.
Feb 2026: Polymarket lists a small 5-minute Bitcoin contract. Since then, Binance order flow spikes in the final seconds before settlement; prices revert soon after.
New paper with David Dai and Shihao Yu ( @ShihaoY ): Settlement Manipulation in Prediction Markets (
The finding, up front:
Traders push Bitcoin's price in the final seconds to decide the contract. That push makes the price less informative, yet Bitcoin's market more liquid. Market makers are largely insulated; ordinary traders lose $7.6M in two months.
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Cannot express how grateful I am to partner up with yet another prestigious VC firms in crypto: @PanteraCapital.
Their research team built this entire report on Surf. Polymarket, Kalshi, and Binance data, all through one API.
They backed us early. Now they publish on our data.
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Short term up-down markets are one of the key volume drivers today on Polymarket and other prediction market problems.
@0xallyzach @sui414 on our research team have done a wonderful job breaking down price volatility patterns in 5min BTC markets + what this means
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Polymarket has traded ~$5.6B in crypto market volume this year
But inside its fastest markets, the volume comes from repetition not size
Wallets with a median ticket under $10 account for 98.5% of 5-minute taker volume
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While Polymarket has done more crypto volume since the start of the year, its trade mix tells a different story.
Both venues trade small.
But Polymarket is crowded at just a few dollars.
Kalshi runs larger throughout the distribution.
From the median all the way into the tail.
Same category.
Different market structure.
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Rebranding this The AI Modularization Thesis from USV
"AWS built a $ 100B+ platform spanning compute, storage, and ML — and yet an entire ecosystem of multi-billion-dollar companies emerged by specializing at layers above it."
If AI Modularization follows the path of cloud modularization then this thesis would certainly be well poised to generate large winners.
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Tokenization has moved past the first wave of digital copies, but the market is still far from fully native onchain finance.
So we built a way to track where assets sit in between.
Today we’re introducing @PanteraCapital’s State of Tokenization:
A quarterly report and data portal tracking 593 assets across a $320B market
A look inside the portal 👇
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