You won't get anywhere near that kind of annualized return. In order to do that, you would have to find another similar arbitrage opportunity immediately after every settlement. That won't happen as major elections only happen every 2 years in the US. If there was really the potential to make an honest 29%+ annual return, PredictIt would find a way to take advantage of it, even if they had to work with a 3rd party. If you already have money in PredictIt that is not tied up with something else, sure, the arbitrage opportunity in this case makes sense to do. Others might also be able to use PredictIt to get an interest-free cash advance. (Take out a credit card with 0% interest for as long as possible with cash back...deposit funds into Predict, do as you describe and then withdraw the money in a month after settlement. Let the balance run up until the 0% interest period expires and then pay off card.) But these ideas won't make anyone rich. Also, I suspect the default risk is significantly higher with PredictIt than IBKR Notes.
It also makes no sense to pay 17%+ APR interest rates on a credit card...and yet...people do it all the time...YOLO I guess.
Yeah, it's not a full hedge, but it's basically free. I look at these types of bets as purely gambling, but a hedge in the sense that if I lose all the money I'll still be happy with the outcome. I also listed some other hedges on here that I did before the election, notably buying FXI, INDA, and EEM (covered calls actually) which would benefit under a Biden victory. Those did well. UUP short also working too...unfortunately.