Prediction market platform Polymarket has made a subtle but meaningful change to how some of its crypto markets operate.

Updated documentation on the site shows that 15-minute crypto up and down markets now carry taker fees, a break from the platform’s long-standing zero-fee trading model.

The update appeared without a formal announcement and applies only to a narrow segment of markets.

Most Polymarket markets remain fee-free, signalling a targeted structural adjustment rather than a platform-wide shift.

The change was identified through revisions to Polymarket’s Trading Fees and Maker Rebates Program documentation.

These sections now explain that taker-only fees have been enabled on short-duration crypto markets to fund liquidity incentives.

Archived versions of the documentation indicate that this language is new, suggesting the fee model was introduced recently and without public notice.

Documentation reveals new fee structure

According to the updated material, the taker fees apply solely to 15-minute crypto markets.

These are short-term contracts designed for rapid price movements, where liquidity conditions can change quickly.

The platform states that fees collected from takers are redistributed daily to liquidity providers in USDC stablecoin, rather than retained by Polymarket itself.

This redistribution mechanism positions the fee as a funding tool for market makers rather than a revenue stream for the platform.

Other markets, including longer-term crypto predictions, political markets, and non-crypto events, continue to operate without fees.

Fees tied to market odds

The documentation outlines a variable fee model based on market odds.

Fees are highest when prices are close to 50%, a range typically associated with the greatest uncertainty and trading activity. As odds move closer to 0% or 100%, the fee declines sharply toward zero.

Examples included in the documentation show how this plays out in practice.

A taker trade of 100 shares priced at $0.50 would incur a fee of about $1.56, which is slightly over 3% of the trade’s value at the peak of the curve.

Smaller trades and those placed near probability extremes face lower charges, with very small fees rounded down.

Social media reaction frames intent

The quiet rollout prompted discussion on X, where several users framed the move as a market-structure adjustment rather than a conventional fee increase.

X user 0x_opus said the change would increase protection from wash trading, arguing that the platform is not charging users in the traditional sense because the fees are redirected to liquidity providers.

Another trader, kiruwaaaaaa, described the move as being directed against high-frequency bots, saying the fee-funded rebates could incentivise tighter spreads and more consistent liquidity.

A third user, Tawer955, offered a more detailed breakdown, calling the headline effect of the change “scary, but not as bad as it sounds.”

He said the structure creates a sustainable cash flow for liquidity providers while reducing incentives for bots that previously exploited free liquidity.

Impact limited to select markets

For the majority of Polymarket users, the change is expected to have a limited impact. Only 15-minute crypto markets are affected, while the rest of the platform remains fee-free.

Even within the affected markets, the fee design reduces costs for directional trades and those placed near clear probability outcomes.

By concentrating fees around the most competitive price ranges and redistributing them to liquidity providers, Polymarket appears to be fine-tuning incentives in its fastest markets without altering the broader user experience.

The post Polymarket quietly changes fee model for short term crypto markets appeared first on CoinJournal.

Polymarket quietly changes fee model for short term crypto markets

Source: https://coinjournal.net/news/polymarket-quietly-changes-fee-model-for-short-term-crypto-markets/

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A new study by Columbia University researchers has found that nearly a quarter of all trading on Polymarket, one of the world’s leading decentralised prediction platforms, has been artificially inflated by wash trading over the past three years.

Using blockchain analytics, the researchers traced millions of transactions on the Polygon network and found widespread patterns of self-dealing that misrepresented market depth and liquidity.

The findings challenge the perceived transparency of blockchain-based prediction markets and raise deeper questions about how decentralised finance can preserve integrity while operating without traditional oversight mechanisms.

Algorithmic analysis exposes trading manipulation

The research team analysed millions of wallet transactions recorded on the Polygon blockchain, where all Polymarket activity is publicly verifiable.

By designing algorithms to detect repetitive and circular trading patterns, they identified that 14% of the platform’s 1.26 million wallets exhibited behaviour consistent with wash trading.

These accounts repeatedly transacted with each other but rarely interacted with the wider market, indicating self-dealing activity rather than genuine speculation.

According to the study, wash trading accounted for an average of 25% of total Polymarket transactions since 2021.

The frequency of this artificial activity fluctuated over time, peaking at 60% in December 2023 before declining to around 5% in May, only to climb again to roughly 20% by October.

The findings illustrate how easily decentralised markets can be manipulated when transaction costs are negligible and identities pseudonymous.

The authors, including Columbia Business School professors Yash Kanoria and Hongyao Ma, economist Rajiv Sethi of Barnard College, and doctoral student Allen Sirolly, emphasised that their estimates are not definitive.

However, the data suggests a consistent pattern that raises questions about how on-chain markets represent real sentiment and liquidity.

Token speculation may have fuelled artificial activity

While the study did not allege direct involvement by Polymarket itself, it identified structural features that make wash trading possible.

The exchange charges no transaction fees, supports self-custodied crypto wallets, and enables stablecoin settlements, allowing traders to operate multiple pseudonymous accounts without meaningful cost.

The researchers also linked several spikes in artificial volume to rumours of a potential Polymarket token launch.

In decentralised finance, such speculation can drive traders to inflate their activity in hopes of qualifying for “airdrop” rewards when a new token is released.

In early October, Polymarket founder Shayne Coplan posted on social media hinting at a possible token, coinciding with one of the sharp rises in wash trading.

Sirolly noted that authentic trading volumes tended to surge around real-world developments like election polls or sports results, whereas wash trading peaks aligned more closely with token-related rumours.

This suggests that some users were trading not for market insight but for eligibility in prospective reward distributions.

Regulatory context and industry competition

Polymarket, founded in 2020, has become one of the most active blockchain-based prediction platforms, allowing users to bet on political, financial, and cultural outcomes.

Its closest competitor, Kalshi Inc., operates under US regulation but does not run on a blockchain, limiting external scrutiny of its data.

The report’s timing is significant. In 2022, Polymarket reached a $1.4 million settlement with the Commodity Futures Trading Commission (CFTC) for operating an unregistered exchange and subsequently barred US users.

Despite regulatory pressure, Polymarket remains attractive to institutional investors.

Intercontinental Exchange Inc., owner of the New York Stock Exchange, recently signalled plans to invest up to $2 billion in the company, underscoring the mainstream financial world’s growing interest in blockchain prediction markets.

The post Wash trading accounts for a quarter of Polymarket’s activity, Columbia study reveals appeared first on CoinJournal.

Wash trading accounts for a quarter of Polymarket’s activity, Columbia study reveals

Source: https://coinjournal.net/news/wash-trading-accounts-for-a-quarter-of-polymarkets-activity-columbia-study-reveals/