Polymarket’s $9 Billion Valuation Under Fire: Double-Counted Trades Exposed

That eye-popping $9 billion valuation just hit a reality check.

Polymarket—the prediction market platform that's been riding high—now faces scrutiny over how it counts its trades. A discovery of double-counted activity throws cold water on those headline-grabbing numbers. Turns out, not all volume is created equal.

The Accounting Glitch

Here's how it works: some trades were reportedly tallied twice. A user buys a 'yes' contract, another buys a 'no'—in some accounting methods, that gets logged as two separate trades instead of one matched pair. It inflates the total volume, making platform activity look hotter than it actually is.

For a sector built on trustless execution, trust in the reported metrics is everything. This isn't just a spreadsheet error; it's a credibility hit. Investors and users rely on transparent data to gauge a platform's health and liquidity. When the numbers get fuzzy, confidence evaporates faster than a memecoin's utility.

Valuation on Shaky Ground

A $9 billion tag is serious venture capital territory. It implies massive adoption, network effects, and a future revenue stream to match. But if the core activity metric is flawed, the entire valuation model starts to crack. It's the crypto equivalent of finding out a company's 'active users' are mostly bots.

This puts Polymarket in a tough spot. They'll need to clarify their methodology, provide audited figures, and rebuild trust. The market hates uncertainty more than it hates regulation.

The Bigger Picture

This incident highlights a growing pain for decentralized finance: the lack of standardized reporting. In traditional markets, exchanges follow strict rules on volume reporting. In crypto's wild west, everyone makes their own rules—until someone calls their bluff.

It's a cynical reminder that in finance, if a number looks too good to be true, it probably is—especially when it's used to justify a billion-dollar price tag. The real prediction market now is betting on how quickly they can fix the count.

Polymarket's next move needs to be transparent. Restate the numbers, explain the fix, and prove the platform's real worth. Because in the end, the most accurate prediction might be that inflated valuations always find a pin.

Polymarket Trades Double-Counted Issue

Paradigm researcher Storm explained the issue is unrelated to wash trading but to how the “OrderFilled” events in the smart contracts are recorded on Polymarket: “For every trade, two ‘OrderFilled’ events occur: one for the Maker and one for the taker. Those events represent the same trade, but they’ve been reported to many analytics platforms as two trades.”

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. receipts ⬇️⬇️ pic.twitter.com/rQJEzs2Rfl

“It has been a pervasive issue across the board, and everyone from DefiLlama to Allium to Blockworks to various pages on Dune Analytics has been affected,” said Storm. “As a result, the two most important metrics for judging the health of prediction markets, the notional volume and the cash FLOW volume, are systematically overstated across the space.”

Polymarket’s complicated on-chain activity adds to the confusion. Trades can be simple swaps or more complex actions like splits and merges, which generate multiple events that look like separate trades but actually represent the same transaction. “It is difficult to interpret this structure using a basic blockchain explorer,” Storm said.

Polymarket Valuation Faces Scrutiny

This latest finding has plunged the rapid rise in Polymarket’s valuation into controversy. According to reports, this week, the company was valued at $9 billion by the Intercontinental Exchange (ICE), based on a total trading volume of $25 billion, but this value may turn out to be overstated in light of the fact that the company has apparently double-counted its trades.

Previously reported that Polymarket was gearing up to launch in the United States at a valuation of $10 billion, while Bloomberg indicated the company was weighing a fundraise ranging from $12 billion to $15 billion. Dune Analytics also reported a record-high trading volume of $3.7 billion in the month of November, that too appears to be exaggerated.

Polymarket Volume Accuracy Questioned

Polymarket has recently been considered a great example of a platform in the crypto space that has managed to thrive in a period filled with turmoil in the entire sector. It is, however, a fact that has recently come to light that the highest trading volumes reported by most analytics platforms might be misreported.

The results from Paradigm emphasize the increasing need for standardized reporting in blockchain-based prediction markets. Given the ongoing popularity and economic significance of platforms such as Polymarket, the sector will face pressure to embrace a standardized structure for reporting.

According to the conclusion made by Storm, proper reporting plays a crucial role in the development of prediction markets, which will be an essential element in the digital asset space.