Polymarket Inflates Volume via Double-Counting, Research Reveals

Source: DefiPlanet Original Title: Polymarket Inflates Volume via Double-Counting, Research Reveals Original Link: https://defi-planet.com/2025/12/polymarket-inflates-volume-via-double-counting-research-reveals/

Quick Breakdown

• Research flags Polymarket for double-counting trades, inflating reported volumes by up to 50%.
• Practice stems from buy-sell orders being registered twice in the platform’s ledger.
• Findings question the reliability of prediction market data for investors and analysts.

Polymarket faces backlash after independent research uncovered systematic double-counting of trading volume. The decentralized prediction market platform reportedly logs individual buy and sell orders as separate transactions, artificially boosting activity metrics. This revelation, disclosed by Storm on December 8, 2025, raises questions about data transparency on Web3 platforms.

found a pretty major data bug

it turns out almost every major dashboard has been double-counting Polymarket volume (not related to wash trading)

this is because Polymarket’s onchain data contains redundant representations of each trade.

The issue arises from Polymarket’s order-matching system, which causes a single trade pair to trigger dual entries in the volume tallies. Analysts estimate that this method significantly overstates daily volumes, misleading users about market depth and liquidity. Blockchain explorers confirm the pattern across high-volume events like U.S. elections, where Polymarket saw peaks exceeding $1 billion in reported trades.

Double-counting mechanism exposed

Researchers dissected Polymarket’s Polygon-based smart contracts and found that both buy and sell orders contribute fully to volume calculations. Standard exchanges net these as one trade, but Polymarket’s approach doubles the figure.

“This isn’t unique to prediction markets, but it distorts growth narratives,”

noted the report, highlighting similar issues on smaller platforms.

Polymarket has not issued a formal response as of Tuesday morning, though community forums buzz with demands for adjusted metrics. The platform, popular for betting on real-world outcomes from politics to sports, relies on accurate volume data to attract institutional liquidity. Without fixes, trust erosion could slow adoption amid regulatory pressures on derivatives.

Implications for prediction market integrity

Despite the recent revelation of double-counting that has sparked community concerns about data integrity, Polymarket’s growing stature in the financial technology world is simultaneously legitimized by major players.

Notably, Google Finance recently incorporated prediction market data from both Kalshi and Polymarket to enhance its real-time market predictions, allowing users to view live odds on future events directly in search results. This integration, which merges decentralized insights with traditional finance platforms, underscores a complex reality: while the platform grapples with transparency issues that may mislead users on market depth, its institutional acceptance is rapidly increasing, supported by massive institutional backing and a $9 billion valuation. This balancing act between scrutiny over data accuracy and significant corporate endorsement will likely define the next phase of growth for Polymarket and the broader decentralized prediction market sector.