Overview
- The analysis of on-chain activity since 2021 estimates roughly 25% of historical Polymarket volume involved likely wash trades, with a peak near 60% in December 2024 and a decline to under 5% by May 2025 before rising to about 20% by October.
- About 14% of 1.26 million wallets showed coordinated patterns consistent with wash trading, including clusters of tens of thousands of addresses, and roughly $4.5 billion in trades were flagged as suspicious.
- Suspicious activity was concentrated by market type, with sports and election markets showing far higher rates than crypto markets, which the study estimated at about 3%.
- The authors do not allege platform involvement and link spikes to speculation over a potential token airdrop, noting that Polymarket’s lack of KYC and trading fees can enable volume inflation; the company says it is reviewing the findings.
- The report lands as Polymarket reports record October growth and pursues a U.S. return and a potential token, with Intercontinental Exchange reported to have signaled plans to invest up to $2 billion.