More than a billion dollars has been bet on the presidential election on the website Polymarket. But new research says the site is flooded with what’s known as “wash trading,” and that’s making the platform seem more popular than it is.
Polymarket is currently predicting a 66.1% chance that Donald Trump will win the presidential election. But, according to Fortune, the Blockchain firm Chaos Labs found that as much as a third of the trades can be classified as wash trading, meaning users are deploying manipulative tactics to make it seem like more people are involved than actually are. Another firm found evidence of wash trading, too, calling Polymarket’s odds into question.
Omer Goldberg, the founder of Chaos Labs, told Fortune that “wash trading is not specific to Polymarket.” Still, as the platform takes on a bigger role in election predictions, it adds doubts to how seriously it should be taken as a legitimate indicator of what will happen after Election Day next tuesday..
The news of wash trading comes after a Bloomberg report earlier this month found that a tiny percentage of users making big bets can easily swing the odds for one candidate or the other. And last week, a sharp shift in favor of Trump on the platform was credited to a French trader who bet $28 million on the former president.
Goldberg told Fortune that that “identifying and reducing wash trading is critical to ensure that prediction markets are representative of everybody, with market prices and volumes determined by an authentic, enduring user base rather than being muddled by inorganic flow.”
Shayne Coplan, who founded the platform, said last week he believes Polymarket “is a reality check.”
“We’re just market nerds who think prediction markets provide the public with a much needed alternative data source,” he said on X.
“The beauty of Polymarket is it’s all peer-to-peer and transparent,” he added. “Even more transparent than traditional finance, where all the data is obfuscated and only visible to the operator.”
Polymarket has not commented on the allegations of wash trading.