Polymarket's New Strategy: A Risky Bet on In-House Trading
By John Nada·Dec 5, 2025·3 min read
Polymarket's move to establish an in-house trading team raises concerns about fairness and transparency, potentially threatening its reputation in the prediction market space.
Polymarket, a leading name in the prediction market space, is making waves by forming an in-house trading team aimed at market-making against its own customers. This decision, while potentially lucrative for the platform, raises significant ethical and operational questions. As the lines between prediction markets and traditional sportsbooks begin to blur, both users and industry watchers are left grappling with the implications of this shift.
This strategic pivot comes as the prediction market sector faces increasing competition and scrutiny. Polymarket has historically allowed users to bet on the outcomes of various events, ranging from politics to pop culture, acting as a neutral platform for these wagers. However, with the introduction of an internal trading team, concerns arise about the fairness of this model. When a platform profits from the very wagers it facilitates, the objectivity of its operations may be compromised.
Experts warn that this could dilute Polymarket's reputation as a trustworthy space for predictions, much like how its competitors in the sportsbook realm operate. The essence of prediction markets lies in their ability to reflect unbiased views of future events based on collective intelligence. The introduction of internal market makers could lead to situations where users find themselves effectively betting against the house, rather than engaging in a free market of ideas and predictions.
For investors and users of the platform, these changes could have direct financial implications. Polymarket, which competes with other digital gambling platforms, may see its user base shake out as gamblers prioritize transparency and fairness. A potential decline in user trust can lead to decreased trading volume, which in turn can severely hit the platform's revenue model. This situation mirrors past instances in the cryptocurrency sphere where shifts in platform policies resulted in user backlash and loss of market share.
The market itself is already alert to the possible fallout. Since the announcement, there has been a notable impact on trading volumes and user activity on the platform. Recent reports indicate a 15% drop in active users within the first week of this announcement, reflecting a hesitance to engage with a platform that may prioritize profit over fairness. This decline can serve as a dire warning: when trust erodes, the foundation of user engagement weakens.
Moreover, regulatory scrutiny is likely to intensify as Polymarket treads this precarious path. As governments around the world become more attuned to the complexities of online betting and cryptocurrency, the potential for increased compliance costs and restrictions looms. Any hint of impropriety in market operations could trigger investigations, leading to further operational challenges for the platform.
In the context of broader market trends, Polymarket's decision could spot a chilling effect on the sector as a whole. If prediction markets start adopting a model reminiscent of traditional sports betting, they might alienate a segment of the crypto-savvy audience that values decentralization and fairness. The future of these platforms may hinge on their ability to maintain user confidence amid evolving operational strategies. As the landscape continues to shift, observers will be keenly assessing how Polymarket's gamble plays out in real-time, watching for signs of recovery or further decline.