Polymarket election markets logged $600m amid post-election trading
Two Polymarket election markets generated more than $600 million in volume, with analysts finding suspicious patterns but no conclusive proof of wash trading.
By Renata Fuchs · Policy Reporter
· 3 min read
Polymarket election trading volume exceeded $600 million across two international election markets that remained active after outcomes were settled or superseded, according to reporting by WIRED. The figure is combined trading volume, meaning the total value of contracts bought and sold, rather than an equivalent amount of fresh wagers, trader profits, or proven illicit activity.
The larger documented case involved Ethiopia, where Polymarket recorded more than $285 million in volume. Prime Minister Abiy Ahmed's Prosperity Party won 438 parliamentary seats, while the nearest competitor took 13. Yet only $173,000 was traded on Ahmed winning, compared with more than $41 million on his chief of staff, Shimelis Abdisa, becoming the country's next leader.
Polymarket's rules kept the Ethiopia market open until the prime minister was formally appointed and sworn in. Trading continued for 123 days after the election, according to WIRED.
What does Polymarket election trading volume show?
Volume measures every purchase and sale of a contract. It can rise sharply when the same positions are repeatedly exchanged, even when neither side takes on substantial new exposure or makes money. It therefore does not establish how much capital traders collectively risked.
Chris Park, a former Polymarket trader who runs forensic-analysis firm MSR Decode, told WIRED that roughly $284 million of Ethiopia's approximately $285 million in volume came from account pairs repeatedly trading with one another. MSR Decode reviewed more than 38,000 post-election trading loops and found that more than 98% left both sides without a gain or loss. The median holding period was nine seconds.
Rajiv Sethi, a Barnard College economics professor who studies prediction markets, said the pattern appeared to be a form of volume manipulation. He described markets that remain tradable after the underlying event as effectively over as “zombie markets.”
The second market concerned Romania's 2024 election. The original vote was called off, and a new election followed months later. Polymarket kept the older market open alongside a market for the new race, WIRED reported. Sethi said an algorithm developed with colleagues marked 99.6% of its volume in certain weeks as potential wash trading. The report did not provide the Romanian market's total volume.
Was the trading proven to be wash trading?
No. Wash trading generally involves accounts buying and selling repeatedly to create an appearance of market activity while funds move back and forth. It is prohibited under Polymarket's terms, but Sethi cautioned that suspicious patterns alone cannot prove wash trading when the traders' identities and motives are unknown.
MSR Decode said activity farming was the most likely explanation for the Ethiopian anomaly. The firm suggested that traders may have been seeking higher recorded volume in anticipation of a possible Polymarket token or related airdrop. That motive has not been established.
Shana Bautista, Polymarket's head of global intelligence and investigations, told WIRED that the company flagged the activity, investigated it and blocked the accounts involved. Polymarket did not answer follow-up questions about why the accounts were able to generate so much volume before the action, the report said.
This story draws on original reporting from Ars Technica.
