Paradigm: Double-counting Inflates Polymarket Trading Volume
Paradigm researcher Storm has identified a double-counting bug that inflates reported trading volume on prediction market Polymarket. Polymarket’s smart contracts emit multiple OrderFilled events for a single trade — representing maker and taker perspectives and sometimes additional records from split/merge operations. Common analytics platforms and dashboards (named by Paradigm: Dune, DeFiLlama, Allium/Alium and Blockworks) frequently sum these redundant on‑chain events as separate trades. That produces materially overstated notional and cashflow volume figures (for example, Dune’s November figure of $3.7bn and cited cumulative totals used in valuation reports may be higher than actual activity). Paradigm does not allege manipulation by Polymarket but warns the issue reflects a wider DeFi-analytics problem: many tools apply generic accounting that lacks protocol-specific de-duplication. Recommended steps: analytics providers should implement protocol-aware volume calculations; protocols should publish clear on-chain data schemas; and investors/traders should cross-check volumes across sources and verify on-chain activity directly. For traders, the immediate takeaway is to treat Polymarket volume metrics with caution — inflated volume can mislead liquidity assessments, skew risk models and alter position sizing until dashboards update their methodologies.
Neutral
The news concerns inaccurate metrics for Polymarket rather than a protocol exploit or token-specific event. It primarily affects reported trading volume and analytics reliability rather than on-chain asset security or token economics. Short-term, traders who relied on inflated volume figures may reassess liquidity and reduce position sizes in markets where perceived depth was overstated, causing localized volatility in market activity but not a direct price shock to any listed token. Long-term, improved analytics and protocol-aware de-duplication should restore accurate metrics and market confidence. Overall, the story reduces trust in some volume data sources (raising caution) but does not constitute a bearish fundamental event for a specific cryptocurrency; impact is neutral on price but meaningful for trader behavior and risk models.