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Polymarket Scrutinizes Builders Program as Copy-Trading Apps Spark Insider-Style Concerns
Polymarket has launched a review of third-party startups participating in its Builders Program, amid growing concerns that some products are encouraging insider-like trading behavior, according to Huo Xing Cai Jing.
The Builders Program, introduced in November, lets outside developers build trading apps on Polymarket's infrastructure. About 200 developers have joined, with participants eligible for as much as $2.5 million in funding plus weekly rewards.
The review comes as several of the program's highest-volume developers have converged on the same business model: copy-trading apps. These tools surface accounts showing unusually high win rates or highlight suspicious timing and abnormal trade sizes, then let users replicate those trades with a single click.
Some apps market the approach explicitly. Kreo promotes helping users "find insider traders before anyone else." Polycool publishes a page titled "Polymarket Insider Trading Guide," arguing, "This isn't the stock market—using nonpublic information to place bets won't land you in jail; the rules of decentralized prediction markets are entirely different."
Activity tied to the Builders Program has grown sharply. Trading volume generated by the program rose from $100 million in November to more than $600 million in March, representing 16% of Polymarket's total monthly volume. PolyGun, another copy-trading app, has claimed that at one point its weekly volume reached 11% of Polymarket's entire platform.
Security issues have also surfaced. In February, PolyGun was hacked through a code vulnerability, with about $70,000 in user funds stolen. Another copy-trading app, Polycule, was previously compromised for roughly $230,000.
Many of these copy-trading products are run by anonymous teams reachable only via Telegram. PolyGun's press release lists three executives under pseudonyms, and operations are said to be largely handled by a single individual.
Insider-trading worries are not limited to copy-trading apps. On April 7, four accounts reportedly earned $663,000 by betting on a ceasefire between the U.S. and Iran. Blockchain analytics firm Lookonchain said the accounts were created and funded on the same day and had no prior transaction history.
Polymarket has taken steps to bolster oversight. Last month it partnered with data analytics firm Palantir to strengthen compliance monitoring for sports betting and updated its rules to ban trades based on "stolen confidential information." Still, Polymarket does not require identity verification, and many traders use VPNs to mask their locations and rotate accounts—factors that can make enforcement harder than at rivals such as Kalshi, which mandates KYC.
Polymarket's trading volume reached about $23 billion in March, up roughly tenfold from a year earlier. The platform is currently raising capital at a $20 billion valuation, compared with $9 billion in October. Kalshi closed a funding round last month at a $22 billion valuation.
Both platforms are facing heightened scrutiny from lawmakers in multiple U.S. states, who contend that prediction markets function as illegal gambling operations that sidestep state law.