30s Summary

Chaos Labs and Inca Digital allege that 30% of activity on prediction market site Polymarket surrounding the 2024 US Presidential Election is due to wash trading. The firms state the true transaction volume was around $1.75 billion, not the reported $2.7 billion. The discrepancy was noticed due to discrepancies in tallying shares for candidates. Accusations of manipulation surfaced as the gap between candidates widened. Polymarket’s investigation found a French trader running four accounts with $28 million in pro-Trump bets. Another unrelated party wagered $2 million on pro-Trump bets.

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Two companies, Chaos Labs and Inca Digital, have reportedly found that about 30% of the action going on for the 2024 U.S. Presidential election on the prediction market site Polymarket is due to something called wash trading. This is a sneaky technique that’s used to fake increased activity on the market.

This info comes from a Fortune report, which says that both Chaos Labs and Inca Digital believe the true transaction volume on Polymarket was around a $1.75 billion, and not the $2.7 billion that Polymarket reported.

So, how did they come to this conclusion? Chaos Labs analysts noticed a discrepancy in transaction volume because Polymarket was tallying shares for candidates in full dollar amounts despite shares actually trading for less than $1.

According to data from Dune, the total money waiting to be bet or “open interest” for the 2024 presidential election on Polymarket was just over $150 million. This figure shows a different trend than the billions in transaction volume because of people selling their positions to others on the platform.

Some weird stuff was going on at Polymarket in early October where the position between the two U.S. presidential candidates was close. But, this began to switch up when Trump pulled ahead of Harris with a solid 10-point lead on Oct. 12. Not just that, but his lead even further increased with time and he now has a huge 30-point advantage over Harris, something you don’t see often in U.S. presidential polls.

Cue the drama, with claims of market manipulation starting to spread as the gap between the two candidates kept widening. This made Polymarket jump into action to start an in-depth look at their U.S. users and if any sneaky market manipulation was happening.

After their investigation, Polymarket claims they caught one person who was running four different accounts, placing $28 million in bets favoring Trump. This person hasn’t been named, but Polymarket describes them as an experienced trader and a French citizen.

Then, things got wilder, as reported another big fish wagered another $2 million in pro-Trump bets, but they don’t seem related to the French trader Polymarket identified.

Source: Cointelegraph