During our recent webinar, one of the attendees made an interesting observation:

This comment opens up an important conversation about what Predictive Markets really are and clears up common misconceptions around liquidity, risk, and information.

What is User-Generated Liquidity?

Traditional betting platforms, casinos, and bookmakers operate on a “house model.”

The house sets the odds and provides liquidity — meaning, they control how much you can bet, how much you can win, and always have the edge.

Predictive Markets flip this model.

In platforms like Polymarket, liquidity is user-generated.

This means:

• The prices of outcomes are set by the traders — not a bookmaker.
• The more people trade on a market, the deeper and more liquid it becomes.
• Everyone participates in the price discovery process.

It’s a “free market” of information.

Your buy and sell orders move the price, not an invisible "house."

Do You Need Insider Information to Profit?

This is one of the biggest misconceptions.