Why did Polymarket acquire Dome? Let's talk about Polymarket's ecological ambitions

Author: Yue Xiaoyu

Dome is essentially a unified prediction market API that allows developers to access multiple platforms (such as Polymarket, Kalshi, etc.) for market data, odds, trading volume, historical data, and more through a single interface.

By directly acquiring this middleware, Polymarket has effectively taken control of a large amount of underlying data sources for third-party tools, trading bots, data dashboards, aggregation websites, and research accounts.

This is Polymarket's second acquisition, with the first being the acquisition of the U.S. licensed derivatives exchange QCEX.

The goals of each acquisition are very clear.

1️⃣ We can observe that when a platform grows larger, it will expand both upstream and downstream to control the entire industry chain.

This expansion can be divided into two directions:

One is horizontal expansion, crossing tracks/categories.

For example, Polymarket's acquisition of QCEX complements its compliance and derivatives capabilities, allowing it to penetrate traditional finance and institutional markets.

Collaborating with MLS, NHL, and Substack represents an expansion into event categories (sports/media).

The goal of horizontal expansion is to transform from a prediction market into a comprehensive event trading platform, comparable to traditional exchanges + betting + information.

The second is vertical expansion, controlling the upstream and downstream of the industry chain.

Upstream: Data/API infrastructure (acquisition of Dome).

Midstream: Trading engines, market making, liquidity.

Downstream: User end, tools, analysis, investment research, copy trading, bots.

Acquiring Dome means securing the data access layer, controlling the entry point of the developer ecosystem, and "stringing" the fragmented ecosystem onto its own API.

This is of great significance.

2️⃣ I have always believed that the prediction market track can be compared to the meme coin track.

Many data analysis platforms and trading tools in the meme coin ecosystem can be replicated in the prediction market.

Here are several tools needed for prediction markets:

Data dashboards: Cross-platform market data, probability trends, capital flow, whale tracking.

Quantitative/bots: Arbitrage, grid trading, copy trading, AI probability models.

Investment research tools: Event attribution, win rate backtesting, risk calculators.

Infrastructure: Market-making bots, liquidity aggregation, clearing tools.

Polymarket already has hundreds of third-party tools, and acquiring Dome is aimed at unifying the entry point and integrating the ecosystem.

Polymarket has only set up the platform, but many services are still lacking.

These services do not need to be provided by Polymarket itself; it only needs to nurture the ecosystem and let third parties handle it.

These tools can help Polymarket enhance data analysis and assist user decision-making.

3️⃣ To summarize,

Polymarket's acquisition of Dome is a key step in upgrading from a trading platform to a prediction market infrastructure.

Polymarket's expansion path involves horizontal compliance and category development, and vertical control of data and tools.

The ultimate goal is to become the infrastructure for the entire industry, just as e-commerce controls supply chains and traffic in the Web2 industry.

Basic products create tools, while advanced products build ecosystems.

This is the highest barrier and the deepest moat.