“polymarket doesn't need more money, it needs better plumbing to free trapped capital”
Data-driven deep dive into Polymarket's order book structure using 600M+ raw datapoints filtered to a 343M research dataset. Categorizes order flow into soft (retail), hard (professional), and AI flow, revealing that Polymarket's liquidity is episodic and attention-driven: the p95 peak hour shows hundreds of millions in open interest while the p50 median is thin. Order book analysis shows surface symmetry at top-of-book but systematic ask-side skew at deeper levels, and market impact data confirms that medium-to-large orders hit liquidity cliffs. Argues the core problem is trapped capital — dollars reserved multiple times against mutually exclusive outcomes — and that better netting and capital efficiency, not more money, is the fix.
Extensive technical background assumed
Platforms mentioned: Polymarket