Prediction markets as truth machines

Prediction market boosters say platforms offer clearer pictures of outcomes than polling. Kalshi beat many pollsters forecasting the two thousand twenty-four US presidential race.

Ethiopia market: six hundred million in volume

Two global election markets on Polymarket's offshore platform generated over six hundred million dollars in trading volume. Most activity involved buying and selling contracts tied to long-shot candidates who ultimately did not win.

Ahmed's landslide, market's mystery

Ethiopian Prime Minister Abiy Ahmed's Prosperity Party won four hundred thirty-eight parliamentary seats. Just one hundred seventy-three thousand dollars was wagered on Ahmed winning, compared to over forty-one million traded on his chief of staff…

Nearly all volume from paired accounts

Nearly all of the six hundred million dollars, about two hundred eighty-four million, came from pairs of accounts repeatedly buying and selling with each other, says former Polymarket trader Chris Park, who runs forensic analysis…

“Nearly all of it, about $284 million, came from pairs of accounts repeatedly buying and selling with each other”

Experts call it volume manipulation

Rajiv Sethi, a Barnard College economics professor researching prediction markets, says the high volume of seemingly pointless back-and-forth transactions is obviously some form of volume manipulation.

“It's obviously some form of volume manipulation”

Polymarket blocked accounts after investigation

Shana Bautista, Polymarket's head of global intelligence and investigations, told WIRED the team immediately flagged this activity, investigated, and blocked the accounts from trading.

Market stayed open one hundred twenty-three days after election

Polymarket's rules stipulated the Ethiopia market would resolve in October after the prime minister was formally appointed and sworn in. For one hundred twenty-three days after the election, bursts of seemingly irrational trading continued.

Romania market: ninety-nine point six percent suspicious

Another market about a two thousand twenty-four election in Romania facilitated even more dramatic trading anomalies.

“99.6 percent of volume in this market for certain weeks has been wash trading”

Activity farming for token allocation

MSR Decode suspects traders may have been boosting volumes believing they could benefit if Polymarket launched a cryptocurrency token.

Ninety-eight percent of trades broke even

MSR Decode analyzed over thirty-eight thousand trade loops after the election and found over ninety-eight percent resulted in neither side losing or gaining money. The median time accounts held contracts before selling was nine seconds.

CFTC declines to comment on investigation

The Commodity Futures Trading Commission, which regulates prediction markets in the United States, declined to comment on whether it is looking into these election trades.

Polymarket valued at twenty-one billion dollars

Polymarket recently raised over one billion dollars led by venture capital firm one thousand seven hundred eighty-nine Capital, where Donald Trump Jr.is a partner.The company is now valued at an estimated twenty-one billion dollars.