Blockchain-based prediction platform Polymarket has come to the fore with allegations of Wash Trading as the 2024 United States presidential elections approach. According to the platform’s data, Donald Trump’s probability of winning against Kamala Harris is shown as 67%.
Wash Trading Allegations
A recent report by Fortune raised concerns of potential market manipulation by Polymarket in the election market. Two blockchain analysis firms, Chaos Labs and Inca Digital, found evidence of wash trading in Polymarket’s election prediction market.
Wash trading is defined as artificially increasing the transaction volume by buying and selling the same asset. Chaos Labs reported that approximately one-third of Polymarket’s election market trading volume was generated this way. Inca Digital stated that a “significant portion” of transactions were suspicious.
Increase in Donald Trump’s Odds
Since its founding in 2020, Polymarket has gained a significant following, especially at major events. Ethereum 
$2,682 The platform, which operates on a network, allows users to make predictions about events and positions itself as an “alternative data” source.
“Polymarket is not about politics. “The purpose of the platform is to make real-world events understandable by using the power of the free market.” -Polymarket CEO Shayne Coplan
Inconsistencies in Trading Volume
Alongside the allegations of wash trading, Chaos Labs and Inca Digital found discrepancies between Polymarket’s reported transaction volume and actual on-net data. According to Polymarket data, users are making predictions of $2.7 billion in the election market. But Inca Digital reported that the actual transaction volume was approximately $1.75 billion.
Chaos Labs stated that this difference is due to the way Polymarket counts shares in US dollars. This raised additional signs of trouble with the accuracy of Polymarket’s data.
These practices can undermine trust in prediction markets such as Polymarket and lead users to worry about the reliability of data on the platform.
Polymarket has yet to make an official statement about these findings.
The allegations about Polymarket show that users should pay attention to the platforms’ transparency and data reliability when trading in prediction markets. Polymarket data has nothing to do with real-world surveys regarding elections.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
