A recent investigation by Chaos Labs and Inca Digital revealed that approximately 30% of the trading activity on Polymarket’s 2024 U.S. presidential election predictions may be attributed to wash trading.
This practice, used to manipulate markets by creating artificial trading volume, has raised concerns about the reliability of reported data on the platform.
According to the findings, the actual transaction volume for the 2024 election market on Polymarket was estimated at $1.75 billion, significantly lower than the reported $2.7 billion.
Analysts believe that the discrepancy is partly due to Polymarket counting shares in whole dollar amounts, even though individual shares trade below $1.
Data from Dune Analytics further indicated that the total open interest for the election market on Polymarket was slightly over $150 million.
Open interest measures the total number of active positions held by participants, which differs from reported trading volume as it doesn’t account for transactions where traders sell their positions to others.
Concerns about market manipulation emerged after the odds on Polymarket began to show a substantial lead for Donald Trump over Kamala Harris in early October.
Trump’s lead, which has now grown to around 30 points, stands in stark contrast to traditional polling data, prompting questions about the platform’s transparency.
Polymarket’s investigation identified one trader using four accounts—Fredi9999, Theo4, PrincessCaro, and Michie—who was responsible for $28 million in pro-Trump bets.
The individual, described as a French national and seasoned trader, remains unnamed.
Following the investigation, another large bet of $2 million favoring Trump was reportedly placed by an unrelated individual.
Polymarket has committed to filtering out U.S. users and potential manipulators to improve market integrity amid ongoing concerns over the platform’s activities.