Polymarket’s Trading Volume: Unmasking the Artificial Inflation

A recent investigation by Bloomberg has unveiled a troubling revelation about Polymarket’s trading volume, raising questions about the platform’s authenticity and market representation. Researchers from Columbia University discovered that the platform is artificially inflating its trading activity through wash trading. This practice involves traders buying and selling from themselves to create artificial activity, potentially skewing actual market participation data. The study estimates that nearly half of Polymarket’s reported trading volume may be inflated, impacting investor confidence and the platform’s perceived liquidity.