Paradigm Alleges Volume Double-Counting by Polymarket, Igniting Prediction Market Rivalry
A co-founder of the prominent crypto venture capital firm Paradigm recently alleged that a widespread data bug led to the double-counting of trading volumes on the decentralized prediction market platform Polymarket. The claim suggests that most public dashboards and analytical tools tracking Polymarket have been significantly overstating the platform’s volume due to a flawed accounting method applied to its on-chain transaction data. The controversy highlights a deep technical and competitive rift within the rapidly growing prediction market sector, bringing the accuracy of publicly reported metrics under intense scrutiny.
The Technical Claim: Double Counting “OrderFilled” Events
The technical analysis presented by Paradigm focused on the event logging structure of Polymarket’s smart contracts. The core of the issue, according to Paradigm, is the common method used by third-party data aggregators: simply summing all “OrderFilled” events recorded on the blockchain. Paradigm claims that each individual trade transaction on Polymarket generates two sets of “OrderFilled” events—one representing the maker side of the trade and one representing the taker side. By incorrectly adding both of these events, analysts mistakenly count the total trading volume twice, which essentially inflates the reported volume by nahead 100%. Paradigm suggested that a more accurate measure of volume should instead use a one-sided metric, such as only the taker-side volume or by accurately tracking the corresponding “OrdersMatched” event, which represents the settled trade once. The firm asserted that this technical flaw affects both the number of contracts traded and the reported US dollar cash flow volume, leading to an exaggerated perception of Polymarket’s actual market size and liquidity.
Competitive Bias and Industry Response
The allegations rapidly drew criticism from Polymarket supporters and market commentators, who pointed to the strong competitive bias behind Paradigm’s public critique. Paradigm is a significant investor in Kalshi, a heavily regulated, centralized prediction market platform based in the U.S. Kalshi is considered a primary competitor to Polymarket, particularly since Polymarket received key regulatory clarity from the CFTC allowing it to operate in the U.S. market. Polymarket’s proponents clarified that the issue stems from the data collection methods of third-party panels and not from any malicious intent or inherent flaw in Polymarket’s underlying protocol data. They suggested that Paradigm’s amplification of the controversy was a purposeful and underhanded tactic intended to discredit a major competitor in the fierce race for prediction market dominance. This public spat underscores the high stakes in the prediction market industry, which has recently viewn massive investment and regulatory movement, including high valuations and integrations with major technology companies. Data accuracy is paramount, as volume figures are often used to gauge market legitimacy and attract new users and capital, making the integrity of these reported metrics a critical point of industry contention.
