Written by: 0xjs
background
Polymarket is a leading global on-chain prediction market platform, with trading volume surging to billions of dollars, especially during the 2024 US election, and is considered a bellwether for the crypto prediction market. Kalshi is another prediction market platform that directly competes with Polymarket.
Paradigm is a top-tier venture capital firm focused on crypto investments. Its founder, Matt Huang, is a long-time active user of the X platform, frequently sharing his insights on the crypto ecosystem. Paradigm's recent investment in Kalshi has foreshadowed subsequent controversies.
Origin of the incident (December 8, 2025)
Bug Discovery: Paradigm data analyst Storm discovered an issue with Polymarket's on-chain data during due diligence. Specifically, each transaction in Polymarket's on-chain transaction log had "redundant representations," causing third-party data aggregation tools (dashboards such as Dune and Artemis) to double-count each transaction when calculating transaction volume. This was not wash trading or manipulation, but a purely technical bug . Storm posted a detailed explanation on X, including data screenshots and code examples, pointing out that this affected reports on "almost all major dashboards." Storm's post quickly garnered 689 likes and over 226,000 views.
Matt Huang retweeted: Less than 15 minutes later, Matt Huang retweeted Storm's post with a brief comment: "Polymarket data bug: volumes are double-counted in most public data. Interesting find in diligence from @notnotstorm." This retweet quickly went viral, garnering over 62k views and sparking heated discussion.
Polymarket responds
Polymarket's data lead, Primo Data (@primo_data), quickly responded, clarifying the facts:
Polymarket's website does not double-count trading volume; they display "nominal taker volume," which is consistent with the standards of traditional prediction markets such as Kalshi.
Third-party dashboards (such as Artemis) also display the taker's notional volume without the double issue; they even provide screenshots as proof.
This topic was discussed in an encrypted data chat back in October, and Matt Huang saw the response at the time but did not mention it publicly.
Primo Data emphasizes that this is not Polymarket's fault, but rather a parsing problem by the data aggregator.
Community and media response
Supporters of Paradigm: Some users praised Storm's discovery, believing it exposed the vulnerabilities in DeFi data integrity and served as a helpful reminder to the industry.
Questions and FUD Allegations: Much of the controversy centers on "motives." Many users point out that Paradigm is an investor in Kalshi (participating in all three most recent funding rounds), and Huang's repost is seen as "smearing a competitor." For example:
User @amathuxbt stated: Is it all because Polymarket founder Shayne Coplan didn't give Paradigm an investment opportunity?
@tier1haterr stated: Kalshi also calculated it this way, but because it was an investment project of Paradigm, it was exempt from review?
Other responses, such as @andrewhong5297's, stated that this was a "known issue" that had been debated over a year ago, similar to the standard settlement method of bid + ask in the market.
Wider discussion: The incident quickly became a trending topic, with some reports claiming that "some observers criticized Huang for attempting to discredit a competitor." Meanwhile, an independent study by Columbia University (released in November) also pointed to issues of wash trading on the Polymarket sports marketplace, further amplifying doubts about the platform's data reliability. However, Huang's accusations were explicitly unrelated to wash trading.
Current Impact and Outlook
Data Correction: Several dashboards (such as Dune) have begun investigations and may need to update their query logic. Polymarket's actual trading volume may be overestimated by 50%-100%, which could affect investors' assessment of the predicted market size.
Industry Implications: This incident highlights the differences between on-chain data and centralized platforms—Polymarket's transparency is a double-edged sword, easily misinterpreted but also facilitating auditing. The rivalry between Paradigm and Kalshi makes this incident seem more like an "industry feud," but it has also spurred discussions on data standards.
Latest Developments (December 9, 2025): Polymarket has not issued any further official response, and Huang has not followed up either. The community is clearly divided, but overall, no major crisis has occurred—prediction markets remain a hot topic in crypto, and the potential of Kalshi and Polymarket as "civilization-level truth machines" remains unchanged.
In short, this was a "minor incident" that originated from a technological discovery, which quickly evolved into a competitive narrative, but at its core was a reminder of the importance of data transparency.
