Columbia Study Reveals Wash Trading in Polymarket Volume
- Approximately 25% of all trading volume on Polymarket may be wash trading, according to Columbia University researchers.
- Suspicious patterns were identified in 14% of Polymarket’s active wallets, indicating potential self-trading to inflate activity.
- Suspicious trades peaked at nearly 60% of weekly volume in December, then fell below 5% by May before rising again to about 20% by October.
- Polymarket has handled over $18 billion in total trading volume and attracted approximately 1.3 million users.
- The platform’s founder, Shayne Coplan, became the youngest self-made billionaire this year after a $2 billion investment valued the firm at $9 billion.
The study highlights significant wash trading on Polymarket, one of the largest prediction platforms globally, which may undermine market confidence and distort volume metrics. The absence of Know-Your-Customer verification and no transaction fees are cited as factors facilitating such practices.
Researchers estimate that roughly $4.5 billion worth of trades could be classified as likely wash transactions on Polymarket, raising concerns about the integrity of its reported volumes and user engagement figures. Source
