Imagine that you are excitedly betting on the 2024 US election on Polymarket, looking forward to making a fortune through prediction markets. However, when you dig deeper, you find that one-third of the trading volume on this platform may be fake transactions! Will your heartbeat speed up instantly? Will your trust collapse instantly?
Yes, this is the scandal that Polymarket recently broke out! Although the platform claimed that Trump had a 67% chance of winning and attracted a large number of users to participate in betting, analysts from two crypto research companies found that there was rampant wash trading on Polymarket. Wash trading sounds like an elaborate scam that creates the illusion of prosperous trading by repeatedly buying and selling stocks, making people mistakenly believe that the market is active, but in fact it is hidden.
According to a survey by Chaos Labs and Inca Digital, wash trading accounts for up to one-third of the trading volume in the Polymarket presidential election market! This means that a large part of the trading volume you see may be a pile of fake transactions. What is even more shocking is that the $2.7 billion trading volume reported on the Polymarket website is seriously inconsistent with the on-chain data, and the actual trading volume is only $1.75 billion!
So how did these fake trades come about, and why did Polymarket allow this to happen?
In fact, wash trading is not uncommon in crypto applications, especially those that may issue tokens and airdrops in the future. Polymarket is also exploring the launch of its own proprietary token, which may be one of the reasons for the rampant fake trading. Through fake trading, some users try to manipulate the market and obtain improper benefits, while Polymarket may attract more users to participate and promote the development of the platform.
However, this kind of fake trading behavior seriously damages the fairness and credibility of the prediction market. Many people rely on the prediction market to obtain information about major events. If this information is false, their decisions will be misled. This will not only harm their interests, but also undermine the reputation and future development of the prediction market.
So, how do we deal with this situation?
First, we need to be vigilant and carefully identify the transaction information on the platform. Don't be fooled by the prosperity created by fake transactions, and have a deep understanding of market dynamics and real situations. Secondly, we can use AI technology to identify potential risks and abnormal activities. AI on-chain address analysis can help us quickly identify false transactions and malicious behaviors and protect our investment security. Finally, we should also call on regulators to strengthen supervision of the prediction market, crack down on illegal activities such as false transactions, and maintain the fairness and credibility of the market.
In short, the Polymarket wash trading scandal has sounded the alarm for us. When participating in the prediction market, we need to think rationally, be vigilant, use AI technology to identify risks, and call on regulators to strengthen supervision. Only in this way can we ensure that our investment decisions are based on real and reliable information and a fair and transparent market environment!
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The above content is for information sharing only and does not constitute any investment advice! Investment is risky, so be cautious when entering the market!
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