Polymarket Trading Figures Are Being Double-counted: Paradigm

Paradigm researchers found that major analytics dashboards are double-counting Polymarket’s trading volume due to redundant blockchain events.

Some of the reported trading activity and volume of prediction market platform Polymarket may be significantly higher than actual reality due to a “data bug,” according to a researcher at Paradigm.

“It turns out almost every major dashboard has been double-counting Polymarket volume not related to wash trading,” said Storm, a researcher at the venture capital firm.

Storm explained that this was because “Polymarket’s onchain data contains redundant representations of each trade.”

When trades occur on Polymarket, the system emits multiple “OrderFilled” events: one set for makers, who have existing orders, and another for takers, who execute the trade.

These events describe the same trade from different perspectives, not separate trades. However, many major dashboards have been combining them, counting the same volume twice.

Polymarket has been seen as a rare crypto success recently, as spot and derivatives markets have been in turmoil. The discovery that its headline metric may be incorrect across many dashboards could dent some of its perceived success.

The researcher went on to explain that the accounting bug “inflates both types of volume metrics commonly used for prediction markets, notional volume and cashflow volume.”

Related: Polymarket plans to use in-house market maker to trade against users: Report

This complexity arises because Polymarket trades can be simple swaps or they can be “splits” and “merges” where both parties exchange cash for opposing positions.

Source: CoinTelegraph