Polymarket saw $600 million in election trades after the elections were over

When Polymarket’s offshore platform posted a staggering $600 million in election‑related trading volume this summer, the numbers alone would have sounded like a triumph for a market that bills itself a “truth machine.” Yet a closer look reveals a far murkier picture—one that raises serious questions about market integrity, regulatory oversight, and the motives of participants who seem more interested in inflating their own numbers than in forecasting outcomes.

The Numbers That Don’t Add Up

Polymarket’s two global election markets—one on Ethiopia’s 2024 federal election and another on Romania’s 2024 race—generated more than $600 million in total trading volume, a figure that dwarfs the usual activity seen in political markets. In the Ethiopian case, the ruling Prosperity Party swept 438 parliamentary seats, while its nearest rival managed only 13. Yet the market’s betting patterns were anything but typical. A paltry $173,000 was placed on Prime Minister Abiy Ahmed’s victory, while over $41 million was wagered on his chief of staff, Shimelis Abdisa, becoming the next leader. The bulk of the $285 million in Ethiopian market volume was tied to losing candidates, a stark reversal of the norm that sees frontrunners attract the lion’s share of bets.

Even more striking, nearly all of the $284 million in that market stemmed from “pairs of accounts repeatedly buying and selling with each other,” according to former Polymarket trader Chris Park of MSR Decode. Such back‑and‑forth trades, often executed within seconds, point to activity that adds little economic substance but inflates the platform’s reported volume.

What Experts Call a “Zombie Market”

Economics professor Rajiv Sethi of Barnard College describes the phenomenon as a “zombie market.” By keeping the Ethiopian market open for 123 days after the election—a period when the outcome was effectively decided—Polymarket allowed trading on an event that had already been resolved in practice. Users posted frustrated comments like “THIS NOT RESOLVED?” and “fuckkkk,” underscoring the confusion and suspicion surrounding a market that should have been closed.

Sethi’s research team flagged the market as suspicious using an algorithm designed to detect wash trading. The algorithm identified 99.6 percent of volume in the Romanian market during certain weeks as wash trades, reinforcing the notion that Polymarket’s platform was being used for manipulative practices rather than genuine prediction.

The Mechanics of Wash Trading

Wash trading, a prohibited practice on regulated U.S. exchanges, involves the same parties buying and selling an asset back and forth to create the illusion of liquidity and activity. Polymarket’s own terms of service ban the practice, yet the evidence suggests it persisted. In the Ethiopian market, MSR Decode logged over 38,000 “trade loops” where contracts changed hands within seconds, with 98 percent of those loops resulting in neither side gaining nor losing money. The median holding period was nine seconds, a timeframe too brief for any meaningful market insight.

Such activity can mislead casual observers into believing a market is robust, while in reality it merely shuffles the same capital among a closed circle of accounts. The lack of real price discovery defeats the core promise of prediction markets as transparent barometers of public sentiment.

Why Traders Might Want to Inflate Volume

One plausible driver behind the volume farming is the prospect of a future token allocation. In 2025, Polymarket’s chief marketing officer Matthew Modabber hinted at a forthcoming token, though he offered no specifics. Sethi and MSR Decode argue that traders may have been betting on the chance that higher‑volume accounts would receive a larger share of any token airdrop, a practice common in the broader cryptocurrency ecosystem.

Andre Guettler of Ulm University notes that such “activity farming” mirrors tactics used to qualify for airdrops in other crypto projects. By artificially boosting their trading numbers, participants hope to appear as valuable contributors to the platform, thereby positioning themselves for lucrative token distributions.

Polymarket’s Response and Its Limits

Polymarket’s head of global intelligence and investigations, Shana Bautista, told WIRED that the company “immediately flagged this activity, investigated, and blocked the accounts from trading.” However, the platform did not explain how the accounts managed to generate such massive volume before being shut down, nor did it detail the criteria used to identify the offending wallets.

The delayed response—allowing weeks of high‑volume, suspicious trading before taking action—raises concerns about the effectiveness of Polymarket’s internal controls. If the platform’s own monitoring systems cannot promptly detect wash trading, external regulators may need to step in to protect market participants and preserve the credibility of prediction markets.

Broader Implications for Prediction Markets

The Ethiopian and Romanian cases are not isolated. Earlier this year, Barron’s reported that Polymarket’s market on the 2028 U.S. presidential election was dominated by bets on ineligible candidates like Elon Musk and New York City Mayor Zohran Mamdani. Such activity underscores a pattern: political prediction markets are increasingly being used as playgrounds for speculative behavior rather than genuine forecasting.

Both Polymarket and its chief rival Kalshi have faced scrutiny over unusual market activity. Kalshi’s perpetual futures market for cryptocurrency drew intense criticism on X, highlighting a broader industry challenge: distinguishing legitimate speculation from manipulative practices that erode trust.

What Comes Next?

Regulators and platform operators must grapple with the reality that prediction markets can be weaponized for volume farming, especially when future token incentives are hinted at but not yet delivered. Stronger real‑time monitoring, clearer enforcement of wash‑trading bans, and transparent communication about why markets remain open after outcomes are known are essential steps to restore confidence.

Until such safeguards are in place, investors and casual users should treat high‑volume political markets with skepticism. The $600 million figure may look impressive, but the underlying activity tells a story of manipulation, speculation, and a market that, for now, appears more interested in inflating its own numbers than in delivering the “truth machine” it promises.

This article was produced with AI-assisted research and editorial support. Reporting is based on the source material cited below. Sources: Ars Technica; arstechnica.com; Global1.News (19 October 2026).

By Jessica Ali, Staff Writer