Polymarket accused of double-counting transaction volumes in most of its public information

By
currency Journal
-
0
22

  • Latest analysis exhibits that Polymarket trades are double-counted on most public dashboards.
  • This difficulty is because of redundant Maker-Taker occasions in sensible contracts.
  • The precise quantity is reportedly about half of what’s reported on the dashboard.

Polymarket, a outstanding prediction market platform, is dealing with elevated scrutiny after analysis by Storm Slivkoff instructed that buying and selling volumes reported on the platform could also be systematically inflated on most public analytical dashboards.

The controversy has attracted the eye of trade consultants, information analysts, and market individuals, elevating questions on how buying and selling exercise is measured and reported in decentralized prediction markets.

Polymarket gives separate OrderFilled occasions for makers and takes

An investigation by Paradigm companion Storm Slivkov, later highlighted by Paradigm co-founder Matt Huang, discovered technical inconsistencies in Polymarket’s on-chain sensible contract information.

Based on Slivkoff, the platform points separate OrderFilled occasions for each the maker and taker sides of every commerce.

Though every occasion is individually correct, most public dashboards combination all occasions indiscriminately, successfully counting the identical transaction twice.

You’ll be able to see the issue in a easy transaction. One commerce of the YES token for $4.13 generated two equivalent occasions for a similar quantity, which collectively reported a commerce quantity of $8.26 within the dashboard.

Slivkoff identified that the bug impacts each notional worth (variety of contracts traded) and money circulation quantity (worth of {dollars} exchanged), thereby inflating the illustration of each commerce.

Notably, this error has nothing to do with wash buying and selling and is solely as a result of approach Polymarket’s contracts output information.

Polymarket refutes claims of double counting of portions

Polymarket’s inside crew shortly refuted the allegations, insisting that its official web site experiences take-side buying and selling volumes with out double-counting, in accordance with commonplace trade observe.

The platform emphasizes that this difficulty primarily impacts third-party dashboards that depend on uncooked occasion information from sensible contracts with out implementing redundant entry fixes.

Notably, a number of main information suppliers, together with DefiLlama, Allium Labs, and Blockworks, have confirmed that they’re updating their dashboards to account for this discrepancy.

Nevertheless, some information suppliers defended the present methodology, noting that from 2024 onwards, extra subtle dashboards accounted for this distinction however didn’t formally doc the method.

Different information suppliers have criticized Paradigm for doable bias as a result of it has invested in Calci, a competing U.S.-based prediction market.

Broader market affect

Past the fast difficulty of reporting volumes, the controversy highlights broader challenges in precisely measuring exercise on prediction market platforms.

Low-priced contracts can generate disproportionately giant notional quantities in comparison with the precise capital in danger, making conventional quantity metrics deceptive.

Consultants recommend that metrics equivalent to open curiosity and payment earnings might present a clearer image of platform exercise.

The timing of this disclosure can also be notable, coinciding with Polymarket’s plans to totally restart in america following CFTC regulatory approval and an anticipated valuation of $12 billion to $15 billion.

The platform can also be contemplating inside market-making operations that permit it to commerce towards its clients, resulting in elevated scrutiny and comparisons with rivals like Kalsi.

RELATED ARTICLESMORE FROM AUTHOR