Polymarket Volume Inflated by 'Artificial' Activity, Study Finds
An anonymous reader shares a report: The volume of activity on Polymarket, one of the most popular prediction markets, has been significantly inflated by so-called wash trading in which users rapidly buy and sell the same contracts, according to a new study by Columbia University researchers. The "artificial trading," as the authors call it, varied over time but accounted for an average of 25% of all buying and selling on Polymarket over the past three years, the researchers concluded. The paper, which has not undergone peer review, was posted Thursday on the open-access research platform SSRN. The authors do not suggest that Polymarket itself was responsible for the wash trading, but they point to elements of the exchange's crypto-based structure that make it possible.

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