Post author here: To clarify, this is not a post from Polymarket.

This is talking about using Compound AI (product I'm working on) to query Polymarket data, including finding insiders, just as a fun example analysis you could do.

Often you need a well-calibrated probability of a future event to feed into some other analysis, and Polymarket is pretty great for that. An example is how much insurance (hedge) to buy for some disastrous event.

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jwpapi a day ago | parent [-]

Why dont you just copy the trades?

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0x3f 21 hours ago | parent | next [-]

If I'm an insider with 100% confidence, I'll take all offers at a certain price as long as I can afford it. Similar story for lower levels of confidence (but still inside info). There won't necessarily be any left for you to copy at a viable price.

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jwpapi 15 hours ago | parent | next [-]

The examples didn’t look like they’ve completely emptied the orderbook

	▲	0x3f 6 hours ago \| parent [-]
		Because there's always some uncertainty and capital limits. But the uncertainty about the outcome is itself inside info, and that's compounded with your own uncertainty about the insider as a copy trader. So the insider will empty out certain price levels only, and your certainty is strictly less than theirs, meaning you have even fewer viable levels to buy.

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chii 19 hours ago | parent | prev [-]

> Similar story for lower levels of confidence

therefore, the polymarket betting odds will reflect the truth - even if that info is a secret that nobody else but the insider knows. And if this is the case, then even an outsider could make use of the odds as a source of info which would ensure that market efficiency (which is about the flow of information) is high.

So what's wrong with insider trading again?

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wqaatwt 14 hours ago | parent [-]

That someone with inside information will e.g. make 500% while those late to the party e.g. only get 10%? (of course your example is not very realistic to begin with)

	▲	nubg an hour ago \| parent [-]
		So is any kind of business illegal? Making investments?

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genidoi a day ago | parent | prev [-]

Past performance is not an indicator of future performance.

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kylecazar a day ago | parent [-]

Shouldn't it be if you suspect they are executed by an insider?

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genidoi 21 hours ago | parent [-]

You can't be sure that they are an insider or lucky, just from onchain data.

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bergen 15 hours ago | parent [-]

If they make single market predictions with high accuracy it is very very likely they are

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genidoi 12 hours ago | parent [-]

No vigilant insider is making a series of "single market predictions with high accuracy" on the same account. They would make unlinkable bets on fresh accounts.

	▲	BoxFour 10 hours ago \| parent \| next [-]
		> No vigilant insider is making a series of "single market predictions with high accuracy" on the same account. There seem to be quite a few non-vigilant insiders. That's the very premise of the post we're discussing. This is unsurprising to anyone who's seen the various ways people get busted for insider trading in equities.
	▲	meetingthrower 2 hours ago \| parent \| prev [-]
		Also insider trading is A-OK on prediction markets!