Kalshi, Polymarket trading volumes on some products raises questions amid massive growth
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Polymarket denies wash trading occurs on any of its products and says the low-odds contract patterns are not inorganic.
60% confidenceLow-odds contract popularity on Polymarket is driven by sharps correcting mispricings, which is healthy for markets.
60% confidenceLow-odds contract activity is more common on Polymarket's international exchange because it has more sharps, while the U.S. exchange is dominated by casual retail traders.
60% confidenceThe CFTC has a zero tolerance policy on manipulative trading, including wash trading, insider trading and fraud.
60% confidenceWash-trading-like patterns fell to a negligible amount by April 2026, but the lingering popularity of low-odds contracts is concerning.
60% confidenceKalshi's liquidity looks provided to harvest incentives, creating the appearance of liquidity.
60% confidenceKalshi's perpetual volume does not look organic.
60% confidenceA designated contract market has a duty to monitor market conditions, price movements and volumes in real time for abnormalities.
60% confidenceKalshi has zero concerns about the ratio of volume to resting liquidity.
60% confidenceKalshi's fee rebates let aggressive liquidity takers profit consistently from arbitrage, and he disagrees that this is fine, though he does not attribute it to wash trading.
60% confidenceThe Ethiopian PM contract will resolve when the government elected this summer is officially sworn in, slated for Oct. 5.
60% confidenceKalshi denies any wash trading occurs on its platform and says it tracked hundreds of users involved in the flagged trades.
60% confidenceIf a material share of reported perpetual volume is manufactured, headline volume may overstate underlying trading demand, which matters most for retail investors at a public listing.
60% confidenceExpanded surveillance and the introduction of fees have weakened chances for market manipulation on Polymarket.
60% confidenceToken airdrops reward early users who help a platform scale, and eligibility may be based on open interest or individual volumes.
60% confidenceDifferences in volume come partly from Kalshi's lower leverage, its ban on requoting by market makers, and U.S. rules against incentivizing users to park capital. Comparing Kalshi to offshore exchanges is apples and oranges.
60% confidenceThe Polymarket contracts on very long shots look like someone putting up low-risk volume.
60% confidenceKalshi's ether perpetual trades amounted to wash trading.
60% confidence