The swift ascent of the prediction market Polymarket may not be as natural as it seems, according to a study from Columbia University. 🧠
In an 80-page treatise titled “Network-Based Detection of Wash-Trading,” which remains unreviewed by peers, the researchers uncovered a labyrinth of wash-trading on Polymarket starting in July 2024. That month, they discovered that nearly 60% of the platform’s total trading volume was… well, fake. 🤡
This activity continued until late April 2025, then waned, only to resurge to approximately 20% of volume in early October 2025,” they noted. One might say the market was playing hide-and-seek with its own liquidity. 🕵️♂️
The researchers concluded that 25% of Polymarket’s total trading volume over the past three years was artificial. 🧪
One of the paper’s co-authors, Columbia University professor Yash Kanoria, told Bloomberg, “I’m hopeful that Polymarket will welcome the analysis in our paper.” One wonders if the market is prepared for such a… blunt assessment. 🤷♂️
CryptoMoon contacted Polymarket for comment, but silence reigned. 🤐
Wash trading, a practice where the same trader buys and sells the same asset to simulate market activity, is illegal in the US. It manipulates prices and deceives investors about real demand and liquidity. 🚫
Allegations of wash trading are not new in crypto. In 2023, Solidus Labs found that 70% of Ethereum-based pools engaged in such activities. 📊
The Shadow of Wash Trading Looms Over Prediction Markets
The latest allegations cast a shadow over Polymarket’s meteoric rise and the broader blockchain prediction market sector. 🌑
These markets gained fame during the 2024 US election for their accurate predictions. Polymarket’s popularity led to whispers of a $10 billion valuation. 🤑
Polymarket has become a leading decentralized platform, letting users bet on real-world events without a central bookmaker. 🎰
As CryptoMoon reported, Polymarket is preparing to re-enter the US market, just months after the CFTC issued a no-action letter. 🚀
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2025-11-07 21:16