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Study Finds 25% of Polymarket Trades May Be Artificial
Researchers found wash trading peaked at nearly 60% of weekly volume in December 2024 and involved complex wallet clusters inflating Polymarket’s activity metrics.
- On Thursday, Columbia University researchers posted a paper on SSRN estimating nearly 25% of Polymarket's historical volume involved rapid buy-and-sell trades to inflate activity.
- Speculation over a possible token motivated volume manipulation, and Polymarket's design features—no identity verification, no trading fees, and use of USDC—enabled large-scale wash trading, the researchers say.
- Using onchain data from the Polygon blockchain, the researchers' algorithm flagged 14% of 1.26 million wallets as wash trading, with a cluster of over 43,000 wallets generating nearly $1 million in volume.
- Researchers warn that inflated volume can mislead users and market participants, while a Polymarket representative said the company was reviewing the study amid fundraising at an up-to-$15 billion valuation.
- The paper shows trading trends across 2024–2025, noting fake trading peaked at nearly 60% weekly in December 2024, fell to about 5% in May and rose to 20% by early October, with 45% in sports markets and 17% in election markets.
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27 Articles
27 Articles
Polymarket Volume Inflated by ‘Artificial’ Activity, Study Finds
The volume of activity on Polymarket, one of the most popular prediction markets, has been significantly inflated by so-called wash trading in which users rapidly buy and sell the same contracts, according to a new study by Columbia University researchers.
·United States
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Coverage Details
Total News Sources27
Leaning Left2Leaning Right1Center3Last UpdatedBias Distribution50% Center
Bias Distribution
- 50% of the sources are Center
50% Center
L 33%
C 50%
R 17%
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