Key Takeaways
- Columbia University researchers found that trading volume on Polymarket is artificially inflated due to wash trading.
- Wash trading involves traders buying and selling the same contracts repeatedly to create fake volume.
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Columbia University researchers found that Polymarket, a blockchain-based prediction market platform, exhibited inflated trading volume due to artificial activity, Bloomberg reported today.
The study attributed the artificial activity to wash trading, where traders repeatedly buy and sell the same contracts to boost apparent volume. Researchers noted that this artificial trading was more prevalent in sports markets compared to election or crypto-related markets.
A Polymarket spokesperson indicated the company is reviewing the study without assigning direct responsibility to the platform itself.
