Polymarket election markets drew over $600 million, mostly on long shots
Ars Technica reports on a trading pattern in Polymarket's election markets that runs against the idea of prediction markets as "truth machines". Two global election markets on Polymarket's offshore platform generated over $600 million in trading volume, far more than most political markets typically attract. Most of that activity was buying and selling contracts tied to long-shot candidates who ultimately did not win.
The clearest example is Ethiopia. This summer, Prime Minister Abiy Ahmed's Prosperity Party won the federal elections by a wide margin: 438 parliamentary seats, with the closest competitor taking 13. The result paves the way for Ahmed to serve another five-year term. On prediction markets, the article explains, trading volume (the total value of contracts bought and sold) typically tracks roughly with the odds of an outcome, so frontrunners attract far more volume than long shots. Here the pattern deviated sharply. Just $173,000 was wagered on Ahmed winning, against more than $41 million traded on his chief of staff, Shimelis Abdisa, becoming the country's next leader. Across the market, volume came to over $285 million, nearly all of it on losing candidates.
The source of that volume is the odd part. Former Polymarket trader Chris Park, who now runs the prediction-market forensic analysis firm MSR Decode, says: "Nearly all of it, about $284 million, came from pairs of accounts repeatedly buying and selling with each other." The article says such a high volume of seemingly pointless back-and-forth transactions has raised eyebrows among experts. Rajiv Sethi, a Barnard College economics professor who researches prediction markets, puts it bluntly: "It's obviously some form of volume manipulation."
The piece opens by setting boosters' claims against this evidence: they often present prediction markets as barometers of public opinion, and the article notes that in 2024 Kalshi beat many pollsters in forecasting the US presidential race. But trading activity, it says, can also tell more perplexing stories.
Key facts
- Two global election markets on Polymarket's offshore platform generated over $600 million in trading volume, mostly on long-shot candidates who did not win.
- In the Ethiopian market, over $285 million was traded, nearly all on losing candidates, even though Abiy Ahmed's Prosperity Party won 438 seats to the closest rival's 13.
- Only $173,000 was wagered on Ahmed winning, versus more than $41 million on his chief of staff, Shimelis Abdisa, becoming the next leader.
- Analyst Chris Park of MSR Decode says about $284 million came from pairs of accounts repeatedly trading with each other.
- Economist Rajiv Sethi of Barnard College calls it "obviously some form of volume manipulation".
Why it matters
Prediction markets are often sold as clearer than polls, and the article cites Kalshi's 2024 call on the US presidential race as an example. Trading volume is one of the numbers people read as a signal of interest and confidence. If nearly all of a market's volume comes from accounts trading with each other, as Park says of the Ethiopian market, headline volume figures can say little about what traders actually believe. Here the volume was far larger than most political markets draw, yet it sat on candidates who lost.
Who it affects
Anyone who reads prediction-market volume as a measure of public opinion, including observers who treat these platforms as alternatives to polling. It also bears on Polymarket and its offshore platform, whose election markets are the subject of the analysis, and on researchers such as Sethi who study these markets.
How to use it
There is no product or tool here, but the article offers a reading rule. Volume normally tracks roughly with the odds of an outcome, with frontrunners drawing far more than long shots. A market where a near-certain winner has $173,000 wagered while a loser has more than $41 million traded is a sign to look closer before treating the numbers as a signal.
How solid is it
The reporting rests on two named experts: Chris Park, a former Polymarket trader who runs the forensic analysis firm MSR Decode, and Rajiv Sethi, a Barnard College economics professor who researches prediction markets. The $284 million figure is Park's analysis; the article does not describe his methodology. The election figures (438 seats, 13 seats) are stated as fact in the article. The second election market in the $600 million total is not named, and its volume is not given.
Risks and caveats
No motive for the trading is stated; Sethi calls it some form of volume manipulation but offers no further explanation. The article does not say who operated the paired accounts, or whether Polymarket responded or took any action. The $284 million is one analyst's estimate, not a platform finding. Volume on a market is also not the same as money at risk from independent traders, which is why the pairing claim is the key one to weigh.
“It’s obviously some form of volume manipulation”
— Rajiv Sethi, Barnard College economics professor who researches prediction markets