Polymarket trading volume 'double-counted' error occurs… Paradigm "Most dashboards double-count"

On-chain trading data from prediction market platform Polymarket appears to have been double-counted on major analytics dashboards, leading to reported trading volumes that are inflated compared with reality. Paradigm researchers analyzed that duplicate events arising from Polymarket's smart contract architecture are not being correctly distinguished by many data providers.

According to Cointelegraph on the 8th (local time), Paradigm researcher Storm said, "Most major dashboards are double-counting Polymarket volume," adding, "This is not due to wash trading but is a problem with the on-chain data structure itself." He explained that when a trade is executed on Polymarket, 'OrderFilled' events occur for both the maker and the taker, and some data dashboards treated these as separate trades and summed them twice.

Smart contracts emit two types of events to represent the same trade from different perspectives, but many block explorers and data analytics platforms have failed to separate them and have simply aggregated them as 'total volume.' This has resulted in both nominal trading volume and cash-flow metrics being measured higher than they actually are.

Storm noted, "Polymarket on-chain data is multi-layered and involves complex interactions, making it difficult to interpret accurately with general block explorers alone." He explained that Polymarket trades take various forms beyond simple swaps, including 'split' and 'merge' where cash and opposing positions are mixed, causing duplicate events during tracking.

Recently Polymarket has been viewed as a 'success story' despite volatility in spot and derivatives markets, but the possibility that its volume metrics were inflated raises questions about its growth trajectory.

ICE (Intercontinental Exchange) recently valued Polymarket at 9 billion dollars, citing cumulative volume of 25 billion dollars as justification. However, if Paradigm's analysis is correct, those figures may also require some adjustment. Dune Analytics' figure of 3.7 billion dollars for November trade volume may also include duplicates, the analysis suggested.

Storm said, "DeFi Llama, Allium, Blockworks, and many Dune dashboards were double-counting volume." He emphasized that as prediction markets rapidly evolve into regulated financial instruments, the industry must establish transparent and consistent data standards.