The Zombie Market Grift: Polymarket's $600 Million Mirage
AI-generated image · US National Wire
When 'truth machines' allow hundreds of millions in wash trading on decided elections, they aren't forecasting the future—they're just farming a potential token.
Prediction market evangelists love to frame these platforms as 'truth machines' or superior alternatives to traditional polling. But if you look at the plumbing of Polymarket’s offshore platform, the image of a sophisticated barometer of public opinion dissolves into something far more cynical: a playground for volume manipulation.
As Wired first reported, a staggering anomaly involving election markets in Ethiopia and Romania revealed that trading volume surged past $600 million—figures that dwarf typical political market activity. The absurdity lies in the fact that this volume exploded *after* the outcomes were already decided.
Take the Ethiopian federal elections. Prime Minister Abiy Ahmed’s Prosperity Party won a landslide victory, taking 438 seats while the nearest rival managed only 13. In a functioning market, volume follows the odds. Yet, Wired reports that while only $173,000 was wagered on Ahmed winning, over $41 million was traded on his chief of staff, Shimelis Abdisa. In total, over $285 million was traded in that market, nearly all of it on candidates who lost.
**OPINION: This isn't 'trading' in any meaningful sense of the word. It is a textbook example of how decentralized platforms can function as unregulated casinos where the house ignores the rigging until it's convenient to step in.**
According to Chris Park of the forensic analysis firm MSR Decode, about $284 million of that Ethiopian volume came from pairs of accounts simply buying and selling with each other. Rajiv Sethi, a Barnard College economics professor, describes this as a 'zombie market'—a scenario where trading continues on events that have already occurred. Sethi notes that in the Romanian election market, an algorithm his team developed flagged 99.6 percent of the volume during certain weeks as wash trading.
Wash trading—the act of repeatedly buying and selling assets to create a fake illusion of liquidity—is banned on regulated U.S. exchanges and is prohibited by Polymarket’s own terms of service. Yet, the Ethiopian market remained open for 123 days after the election results were essentially a foregone conclusion.
Why bother? MSR Decode suggests the motive was 'activity farming.' The theory is that traders were artificially inflating their volumes in hopes of a future payout. This is reinforced by the fact that Polymarket chief marketing officer Matthew Modabber told a crypto podcast in 2025 that there 'would be a token,' though he offered no specifics. Andre Guettler, director of Ulm University’s Institute of Strategic Management and Finance, describes this as a classic attempt by participants to farm a potential airdrop.
Polymarket’s Shana Bautista, head of global intelligence and investigations, told Wired that the company flagged and blocked the accounts in question. However, the platform has not explained why these accounts were permitted to generate such massive volumes before the crackdown occurred.