Forecast Market Arbitrage Case: How a Million-Dollar XRP Order Made $230,000

NullWhisperer · 2026-01-19T12:40:11+00:00

Recently, traders have earned $233,000 on Polymarket through coordination strategies, exploiting moments of low liquidity. They buy prediction contracts, drive up the XRP price, and then sell, revealing vulnerabilities in Polymarket's automated market maker bots. This indicates that during periods of insufficient liquidity, automated mechanisms can be manipulated, and market participants should remain vigilant.

NullWhisperer

2026-01-19 12:40:11

Abstract generation in progress

【Crypto World】 Recently, Polymarket staged an interesting trade — a trader using a fake account, exploiting the low liquidity over the weekend, managed to make $233,000 through coordinated strategies.

How did they do it? The trick isn’t complicated. This guy first aggressively bought “UP” contract shares on Polymarket, then turned around and spent $1 million on XRP on a major exchange, with a clear goal — to push up the spot price and ensure their prediction contracts settle as expected. Once the price rose, they immediately sold off the XRP to lock in profits.

What seems like a perfect operation actually exposes a major flaw in Polymarket’s automated market maker bots. How rigid are these bots? They treat every price jump as the same signal, unable to recognize the underlying factors — how much trading volume there is, whether current liquidity is sufficient, if there are counterparties deliberately manipulating the market, or if the incentives are changing as contracts near settlement. The machines only focus on the number fluctuations, but can’t see through the trader’s true intentions.

This incident serves as a warning to market participants: seemingly fair automated mechanisms can be exploited under conditions of low liquidity and information asymmetry.

XRP0,88%

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NFTRegretDiary

· 18h ago

Oh wow, this technique is really brilliant. AMM bots are so easily exploited. Now I understand how deep the pitfalls of prediction markets are—when liquidity is thin, you're just a sitting duck. Throwing 1 million in can earn you 230,000; this price difference is basically an IQ tax. What about Polymarket's risk control? Just letting people casually farm yields. It seems on-chain arbitrage still relies on the old tricks from traditional finance; bots are really too weak.

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ser_ngmi

· 01-19 13:09

This move is brilliant, relying solely on robots' rigid detection loopholes. Throwing in a million to artificially pump the market, AMM is completely numb haha

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SeeYouInFourYears

· 01-19 13:09

Wow, really? You can make 230,000 just like that? How stupid are the Polymarket bots? This operation is basically just using spot trading to dump and manipulate the prediction market, it's so blatant. Weekend low liquidity is their hunting ground, no wonder they hide behind fake accounts. Investing one million only earns a little over 200,000, feels a bit laborious, and you have to bear slippage risk. That's why I never touch prediction markets; it's too easy for people to use them as an ATM. Honestly, the AMM bots are outdated and need an upgrade in their decision-making logic. I didn't expect Polymarket to have such a low-level arbitrage space; I thought it was mostly cleaned up already.

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GateUser-beba108d

· 01-19 13:08

Haha, this move is really clever. Just take advantage of the weekend when there are fewer people and squeeze out a profit. Was the AMM robot just played like that? This trick has been widespread on Uniswap for over two years. It seems that prediction markets are the new gold mine for rug pulls. Investing 1 million into XRP can earn you 230,000. Is the liquidity that poor? The risk also seems quite high. That's why I say don't touch small coin contracts. The whales can easily trigger your stop-loss and wipe you out. Prediction markets should rely on platforms like Chainlink for depth. Polymarket is playing with fire.

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BearMarketGardener

· 01-19 13:03

This is a typical pump-and-dump scheme to trap retail investors. The robots are really too weak; they can't even react to being manipulated.

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LiquidationHunter

· 01-19 13:00

This move is amazing, the AMM robot is really too stupid, it can't tell whether the price is genuinely rising or being manipulated.

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MetaverseHobo