In a story within the sphere of the decentralized prediction market, a researcher has accused a crypto gambler, operating under the pseudonym ‘Fredi9999’ or simply ‘Fredi’, of significantly manipulating the odds for former President Donald Trump on the crypto platform Polymarket. Over the past two weeks, Trump’s odds of winning have risen from nearly equal to Vice President Kamala Harris’s to a substantial 60.7%, while chances have fallen to 39.3%.
The accusations were brought to light by Domer (@Domahhhh), a pseudonymous political crypto gambler, who detailed his findings in an extensive thread on in prediction markets around the world. Spoiler alert: I was able to contact him, I think, and he blocked me after a few minutes. Sensitive guy! We will come back to that.”
Is Crypto Platform Polymarket Manipulated?
Domer elaborated on the mechanics of the alleged manipulation, highlighting that Fredi placed substantial bets exclusively on Trump, reportedly in excess of $25 million. This influx of capital has introduced a premium of approximately 5% to 8% on Trump odds, making betting on Trump more expensive while simultaneously reducing the cost of betting on Harris by a similar margin. According to Domer, this strategy disrupts the balance between supply and demand on Polymarket, leading to skewed prices that do not accurately reflect broader market sentiment.
Further analysis by Domer showed that Fredi9999 is not limited to a single account. Instead, multiple accounts – PrincessCaro, Michie and Theo – are believed to be controlled by the same entity, collectively holding positions worth approximately $28 million. Crypto exchange Kraken’s synchronization of large deposits, typically in increments of $500,000 or $1 million, into these accounts before deploying funds exclusively to Trump-related markets signals a coordinated effort to influence market outcomes.
In support of this claim, @fozzydiablo, another researcher, identified patterns in the four accounts that imply the control of a single user. Domer referenced @fozzydiablo’s findings and linked to a detailed analysis.
Records show that a single entity purchased all Trump-related bets @Polymarkt a total of $26 million.
-Fredi9999
– Princess Caro
– Michie
–Theo4If we look at their betting activities, we can analyze when the accounts place bets.
The most interesting thing is when… pic.twitter.com/2eSv2AKRhW— Fozzy (@fozzydiablo) October 16, 2024
Domer also speculated on the possible identity and motivations behind Fredi’s actions. Observations regarding the linguistic patterns in Fredi’s comments and related accounts – such as the use of both British and American English spelling and the peculiar spacing around punctuation – indicate a possible French origin. Domer stated: “AI thinks the spelling/spelling/weird misspelling points to a Frenchman who learned British English and spent time in America.”
However, Domer acknowledged the possibility of ulterior motives, including the scenario in which Fredi would be part of a larger plan or even an elaborate role-play designed to cover up the true intentions. The researcher highlighted the unprecedented nature of a $25 million all-in bet on a single candidate, highlighting the need for further investigation to uncover the underlying motives.
Domer wrote, “Maybe it’s all a LARP and someone is having fun pretending about it all and trying to appear unsophisticated on purpose. Maybe it has something to do with it Elon (musk) or another major GOP megadonor. I have no idea, and it’s a bit of a game to figure out what’s going on here. Maybe it’s actually (famous crypto trader) GCR, despite GCR saying it’s not him. GCR suspects it’s someone trying to do that causing Bitcoin to skyrocketwhich is a good explanation.”
This revelation comes amid criticism from Hasu, a strategic advisor to the crypto project Lido Finance and strategy leader at Flashbots. He commented via . (…) This market is not yet deep on a traditional scale, especially considering the size of the event. The misleading reporting and the gigantic shadow cast by the media make it seem that way. And this assumes there is no fake volume on Polymarket.”
Historically, significant individual bets have occasionally affected the prediction markets. Domer pointed to previous examples of the 2008 and 2012 US presidential elections, where some big bettors tried to influence the market odds for John McCain and Mitt Romney respectively. Both cases ultimately did not change the election results, leading to skepticism about the effectiveness and impact of such large-scale bets.
Domer concluded his analysis by questioning the broader implications of Fredi’s actions: “Why do I care? Good question! It is important to know who you are betting against. Is this a super smart trading company and should I be afraid? Is this an idiot betting on what he wants to happen and that I should be happy? Is this just a lame attempt to make it seem like Trump is winning for zero other motives? It’s hard to figure out what’s going on here.”
At the time of writing, BTC was trading at $67,646.
Featured image from Reuters, chart from TradingView.com