I can't remember the exact figures, but apparently if you'd taken the "insane thing does not happen" option on every Trump related contract over the past years, you'd have made a very tidy profit.
Not because he doesn't do insane things, obviously, the market is just not at all good at pricing it.
You can still make that bet at 10% "yes" for the next year. Previous years had similar patterns, so it's not a reaction to Trump.
To be fair, we don't need to find little green men in a UFO. It's sufficient to e.g. find fossils of extinct microorganisms on Mars, which is a slim possibility that's a goal of the Mars Sample Return mission.
These markets also have low volume at reasonable prices. If you bought $10K of "no" right now for next year, you would only get an 8% return, not 10%. You could execute better trades to get better prices, but the odds also become more sane over the year. The S&P 500 is also up 18% YTD (13% YoY for the last 5) and you can buy as much of that as you want.
I don't believe that fossils of microorganisms were counted in the resolver, but the ambiguities of Polymarket are definitely something to be wary of if the resolutions aren't well defined.
To your last point, I'd argue that the S&P 500 has way more risk. Bets for insane stuff like this where a sufficient number of morons are believers in the obviously-not-going-to-happen outcome are the ones that act like CDs.
That topic had over a 10% “yes” chance in January. Betting no on that is better taking out a CD.