- Donald Trump widened his lead over Kamala Harris by over 26% on Polymarket on Friday.
- Forbes, citing an investigation by Chaos Labs and Inca Digital, alleged that the decentralized prediction market’s data may have been rife with wash trading.
Polymarket has found itself magnified under the spotlight following the immense trading volume it attracted on its “Presidential Election Winner 2024” event futures contract. The decentralized prediction market has already managed to raise nearly $3 billion in trades under that segment.
However, a recent report from Fortune has questioned the authenticity of Polymarket’s data. The publication alleged that the numbers were most probably rife with wash trading.
The Polymarket Controversy
As of Friday, Polymarket’s most popular event related to the 2024 US election showed former President Donald Trump leading by 26.1% against his rival Vice President Kamala Harris. The Republican candidate has taken around 63.1% of the odds compared to the Democratic Party nominee’s 37%. The figures notably exceeded 100% due to rounding off.
The sentiments are in stark contrast to other known survey aggregators like FiveThirtyEight Interactive. The site had Harris leading at 47.9% over Trump’s 46.8% during the same period.
Polymarket’s “presidential election winner” segment, often referenced by the mainstream media (MSM), has already gathered around $2.87 billion in transactions as of Friday. Due to its unfavorable numbers to the current administration’s bet and tendency to alter voter sentiment to a certain degree, Democrats have been reportedly looking at the possibility of a foul play within the platform.
Some members of the MSM, such as Newsweek, recently aired their suspicion about the platform rigging its election-related event to favor Trump. After all, they pointed out that Polymarket had partial backing from former PayPal CEO and Trump sympathizer Peter Thiel.
Meanwhile, others floated around the idea that the decentralized prediction market, which is not registered or licensed in the USA, may be catering to US-based users who may be bypassing IP restrictions via virtual private networks (VPNs).
Allegations of Wash Trading
In another twist, Fortune, citing an investigation by Chaos Labs and Inca Digital, alleged that 30% of the volume on the event in question may have been a result of wash trading. Instead of the over $2 billion trading volume shown by Polymarket, the probe found that the actual transactions only amounted to $1.75 billion.
For context, wash trading happens when a trader buys and sells the same security at the same time. This type of market manipulation may also involve collusion with an investor to boost trading activity and mislead others into thinking that there’s a high demand for a certain security.
The source claimed that Polymarket’s “airdrop farming” may have motivated the wash trading. It pointed out that the activity may have been in preparation for the platform’s rumored token launch.
