Originally published on: October 30, 2024
A recent investigation conducted by Chaos Labs and Inca Digital has uncovered alarming findings regarding the 2024 United States Presidential election odds on Polymarket. The report alleges that a significant portion, approximately 30%, of the market activity is a result of wash trading – a manipulative tactic aimed at artificially inflating trading volume.
Fortune’s report on the investigation reveals a stark contrast in the reported transaction volume on Polymarket. While the platform touted a transaction volume of $2.7 billion, Chaos Labs and Inca Digital found that the actual volume was only $1.75 billion. This discrepancy has been attributed to Polymarket’s practice of counting shares for candidates in whole dollar amounts, despite the actual trading value being significantly lower.
Further analysis from Dune shed light on the open interest for the 2024 presidential election on Polymarket, which stood at just over $150 million. This metric differs from transaction volume as it represents the total value of positions held by traders on the platform, reflecting the true market activity.
The race between the two leading candidates, Trump and Harris, took an unexpected turn in early October when Trump surged ahead with a 10-point lead. This lead continued to widen, with Trump now holding a formidable 30-point advantage over Harris – a deviation rarely seen in traditional polling.
As speculation of market manipulation grew, Polymarket launched an investigation to identify potential manipulators. The platform uncovered a single individual operating four separate accounts, responsible for placing $28 million in pro-Trump bets. While the individual remains unnamed, Polymarket described them as a skilled trader of French nationality.
In response to these revelations, another significant player reportedly wagered an additional $2 million in pro-Trump bets, indicating a complex web of trading activities surrounding the election odds.
The unfolding saga of Polymarket’s presidential election odds showcases the challenges of ensuring integrity in prediction markets. With the veil lifted on wash trading practices, the platform faces the daunting task of restoring trust among users and combatting manipulation in the volatile realm of political betting.
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