Polymarket’s Odds for Trump Surge Amid Wash Trading Allegations and Volume Discrepancies

• Chaos Labs flags 1/3 of Polymarket’s volume as artificial, citing wash trading concerns.
• A $45M bet from one investor significantly raised Donald Trump’s odds to 67% on Polymarket.
• Polymarket’s $2.7B reported volume contradicts Inca’s on-chain estimate of $1.75B.

Polymarket faces intense scrutiny over allegations of wash trading and questionable trading volumes as Donald Trump’s odds for winning the 2024 U.S. presidential election against Kamala Harris soar to 67%. 

The platform, which allows users to wager on real-world events, has drawn attention for these odds, with some experts suggesting that inflated trading volume and individual investor actions may have manipulated market perceptions.

Two firms, Chaos Labs and Inca Digital, have raised alarms about the integrity of Polymarket’s metrics as the election approaches.

A recent Fortune report highlighted findings from blockchain analysis firms Chaos Labs and Inca Digital that indicated a considerable amount of Polymarket’s trading volume might be artificial. 

Wash trading, a practice where an entity simultaneously buys and sells assets to inflate trading activity, appears to account for approximately one-third of the volume in Polymarket’s presidential betting market, according to Chaos Labs. Inca Digital further supported these claims, noting that many trades displayed suspicious characteristics. 

This alleged manipulation has raised concerns among analysts and market participants, who fear that inflated volumes could mislead users about the true popularity and activity around specific election outcomes. Polymarket has not yet issued a public response to these allegations.

Polymarket’s data currently shows Donald Trump with a 67% chance of defeating Kamala Harris, a statistic that has raised eyebrows due to a $45 million bet series by a single French investor. This cumulative investment has contributed significantly to Trump’s odds, which have surged recently.

This increase in Trump’s odds coincides with Polymarket’s growing visibility in the media, as outlets like the Wall Street Journal and Fortune incorporate its predictions alongside conventional polling data.

While Polymarket’s CEO Shayne Coplan has emphasized the platform’s non-political stance, these developments have spurred debate about the reliability of its data as an indicator of public sentiment.

Further compounding concerns, Chaos Labs and Inca Digital uncovered discrepancies between Polymarket’s reported $2.7 billion trading volume and actual on-chain data.

Inca Digital estimates the real transaction volume to be closer to $1.75 billion. Analysts attribute this gap to Polymarket’s method of calculating shares as U.S. dollars, where shares priced at mere pennies may be reported as $1 in volume.