Polymarket’s Trading Volumes Artificially Inflated by Critical Data Glitch

Prediction market platform Polymarket faces scrutiny after a critical bug was found inflating reported trading volumes—just as institutional interest in crypto derivatives heats up.

How convenient.

The error, which persisted for an undisclosed period, systematically overstated activity by double-counting certain transactions. While Polymarket claims the issue has been patched, traders remain skeptical about the platform's data integrity during this year's bull market frenzy.

This comes as no surprise to veterans who've seen similar 'accounting errors' during previous crypto manias—always seeming to benefit platforms' perceived liquidity at the most opportune moments.

How the bug inflates volumes

The bug impacts both notional volume—the number of contracts traded—and cashflow volume—the dollar value of trades. Storm emphasized, “this bug inflates both metrics for all trades on the platform.” 

Similarly, researcher Dan Smith noted that summing OrderFilled events includes both Maker and taker volumes. He provided examples where simple $7.98 trades appear as $15.96, while complex trades involving position merges inflate further. “So summing OrderFilled events totals $6899.8 for an order size of just $90,” Smith illustrated, underscoring the scale of double-counting.

Storm created a tool that mimics Polymarket’s different trade types and found the same duplicate counting in every case. He also checked the platform’s contract data and on-chain records, which all confirmed that dashboards are overstating volumes. He emphasized that this issue has nothing to do with wash trading.

Impact on market perception

A sensitive time for a bug to pop up. Just last month, Polymarket returned to the US, offering its app to waitlisted users after receiving a no-action letter from the Commodity Futures Trading Commission (CFTC). The platform now hosts regulated prediction markets, beginning with sports and extending into politics, crypto, and global events soon.

Polymarket also faces increasing competition from competitors like Kalshi. Therefore, it becomes very important for investors and market analysts to report trading activity as accurately as possible.

In the meantime, another incident added to market volatility: a now-viral fake message claimed that a Token Generation Event (TGE) for Lighter had been postponed. The misleading information sent the Polymarket “Yes” odds plummeting from 85% to 22% in less than a few minutes.

ProMint, an X user, said the message was indeed fake. Meanwhile, users saw sharp swings in market predictions; this highlighted the vulnerabilities of social news and crypto channels.

Fake pushed Lighter TGE odds from 85% down to 22% on Polymarket

CEO Lighter in discord now:

"We've decided to postpone the TGE until the end of January to give everyone a chance to relax during the Christmas holidays. We'll also launch the memecoin and conduct an airdrop… pic.twitter.com/PI7Utpqcl9

Dune Analytics reported last week that volumes at Polymarket reached $3.7 billion in November. But if Paradigm’s research is any guide, the true volume could be many orders of magnitude lower. The discrepancy fuels questions about transparency and market confidence.

Polymarket’s bug shows that reported trading volumes may be misleading. Users should interpret market numbers cautiously, and accurate reporting is essential as the platform operates under U.S. rules.

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