Paradigm exposes Polymarket volume inflation? Data platforms double-count, showing overestimation by a factor of two

Prediction market leader Polymarket has become this year’s hottest star, but Paradigm’s latest research indicates that its on-chain trading volume may be double-counted by major analytics platforms, causing actual transaction volume to be overestimated by a factor of two. Since Polymarket’s valuation and market share heavily rely on trading volume data, this finding could severely impact its fundraising situation and highlights deep-rooted issues in data transparency and calculation standards within the prediction market industry.

Polymarket Trading Volume Double-Counted: On-Chain Event Design a Statistical Disaster

Paradigm researcher Storm discovered that every Polymarket trade triggers two types of OrderFilled events on-chain: one for the maker (maker), and another for the taker (taker).

However, these two numbers, which refer to the same transaction, are “summed” and counted by mainstream dashboards such as DefiLlama, Blockworks, and Allium, leading to the trading volume being doubled.

He gave a real trade as an example: a trader purchased YES tokens for $4.13, but two OrderFilled records, each for $4.13, appeared on-chain, causing the dashboard to log it as $8.26.

He stated that this is not due to wash trading, but rather the redundant nature of the prediction event’s data structure itself, which makes analysts easily mistake them for two separate transactions.

How Does Double Counting Affect Data Interpretation?

Storm pointed out that this error exaggerates both the “notional volume (notional volume)” and “cashflow volume (cashflow volume)” metrics.

Impact of Double Counting on “Notional Volume” and “Cashflow Volume” Data

He emphasized that since Polymarket’s trading includes complex forms such as swap (swap), split (split), and merge (merge), the interwoven data layers make it difficult for general blockchain explorers to recognize event relationships, increasing the likelihood of analysts making mistakes.

Paradigm Calls for One-Sided Volume Calculation Standard

Paradigm’s official announcement pointed out that mainstream data platforms have generally overestimated Polymarket’s actual trading volume because of this, recommending that prediction markets use “one-sided volume (one-sided volume)” as the measurement standard, for example, only counting taker-side trades.

The official statement stressed that this article is not about whether there is intentional exaggeration of trading volume, but aims to enable true comparison of trading volumes across platforms and establish a consistent and transparent standard for market statistics.

As an aside, the author notes that Paradigm is also an investor in Polymarket competitor Kalshi, making the motivation for publishing this research self-evident.

(Prediction market Polymarket rumored to be recruiting internal market-making team, running a casino and acting as the house?)

$15 Billion Valuation May Face Reassessment, Trading Volume Becomes the Biggest Question Mark

It’s not hard to imagine that if the actual performance of this data is found to be only half of what the public believes, Polymarket’s leading position and impressive results may come under scrutiny.

In September of this year, Intercontinental Exchange (ICE) invested in Polymarket at a $9 billion valuation, citing $25 billion in cumulative trading volume; Bloomberg reported at the end of October that the company was raising funds at a $12–15 billion valuation.

Storm stated that prediction markets are rapidly becoming an important category in financial markets. As the industry matures, unified and objective data standards are needed to prevent incorrect data from shaping the entire ecosystem narrative.

This article Paradigm Exposes Polymarket Trading Volume Inflated? Data Platforms’ Double Counting Reveals Overestimation by a Factor of Two first appeared on Chain News ABMedia.