The default that breaks wallet forensics.

Polymarket outcome shares are ERC-1155 tokens on Polygon. They can be bought on the order book, minted by splitting collateral, or simply sent from one wallet to another — and a plain token transfer carries no cost basis to the receiving side. A wallet could, in principle, receive winning shares from a second wallet the same person controls, redeem them at $1.00, and book the value as profit it never earned.

Our original screen compared the inventory a wallet appeared to acquire, from its trade history, with the amount it later redeemed. A redemption that exceeded what the visible trade history could explain was flagged for transfer review — on the theory that the unexplained excess had arrived from a second wallet. The share counts behind that comparison came from Polymarket’s public /trades endpoint.

Run across a set of wallets our own method had flagged, the results were dramatic: across the three wallets in this report it flagged 4,725 markets carrying $4,772,218.83 of apparently unbacked redemptions. The screen’s logic was sound. The trade history feeding it was not.

Take the single largest flagged market in the worst-looking wallet: 0x8c901f67…a904, in “Bitcoin Up or Down — April 27, 9:35PM–9:40PM ET” (0x2981bbd7…89bb). A market that existed for five minutes.

At resolution the wallet burned 12,759.355696 shares and was paid $12,759.355696 — a figure Polymarket’s own records and the chain agree on to six decimals.

So the filter saw $16.74 of buying against a $12,759.36 redemption and concluded that roughly $12,738 of winning shares had been gifted in from a sister wallet. What actually happened is that the wallet bought 12,759.68 shares for $9,978.88 across 80 fills and made an ordinary $2,780.48 profit. Adding one query parameter — takerOnly=false — returns 79 of the 80 fills the default view withholds.

The April and July /trades rows differ slightly (21.19 vs 20.87 shares); we publish both rather than reconcile them away. The one-fill count — the part that matters — reproduces exactly.

The two fuller histories differ by $0.51 on one of the 80 fills; we traced it to the chain rather than rounding past it, and the discrepancy is reported rather than forced into agreement — derivation in Method and limits.

An API disagreeing with itself does not settle who is right, so we went to Polygon. We took the redemption transaction, decoded which token was burned and in what quantity, then scanned the blocks before it for every inbound transfer of that exact token and resolved each sender.

Every share came through Polymarket’s own contracts. Not one arrived from another user’s wallet. Both sender addresses are verified under those names on Blockscout, and the two calls in Section 06 reproduce this.

There is a trap here that is the mirror image of the first one. An ordinary purchase also arrives in your wallet as an inbound ERC-1155 transfer — the exchange contract is the sender. A raw count of “inbound transfers” is therefore not evidence of anything either. The sender has to be resolved before the number means what it appears to mean.

One market could be a fluke. We re-fetched the 50 largest flagged markets by excess within each of the three wallets — 150 in total — and asked the same question of each: is the “excess” explained by buying that the default /trades view failed to report?

Result. 150 of 150. The $926,462.58 the method called unbacked was backed by real buying of the specific shares each wallet went on to redeem.

Robustness. 108 of these 150 markets show the wallet trading both outcome tokens, not only the one that redeemed (the other 42 traded just the winning side). Re-splitting every row’s buying and selling by outcomeIndex and re-running the check against the redeemed token alone changes the classification on zero rows. It does change the dollar total: $947,711.94 above is money spent on the shares that were actually redeemed, not both outcomes of the market summed together, which is what an earlier pass of this table showed and which put the number $414,187.03 higher — real money the same wallets spent on the losing side of these same markets and mostly never recovered. Precision derivation in Method and limits.

Scope. These are the 50 largest flagged markets within each of the three wallets, 150 of 4,725 in total — chosen by size of excess inside each wallet, not a pooled ranking and not a random sample. That is the right sample for testing whether the method works, and the wrong one for estimating a rate. What it establishes is narrow: these redemptions were paid for by the wallets’ own purchases of the shares being redeemed — not that the wallets are profitable overall (flagged markets are selected for large redemptions, so losing markets are excluded by construction), and not that wallet-to-wallet transfers never happen, since a transfer traded out on the order book is paid for too and this method cannot see it.

Across all 150 markets, the default view retained 40.4% of buy-side dollars and 59.7% of sell-side dollars, leaving $811,984.53 of buying and $7,829.50 of selling omitted from the default response. Hidden buying dollar-dominates hidden selling here — more than 100 to 1 — because these are redemption-flagged markets by construction: the wallet held to resolution rather than trading out. That skew is a property of this sample’s selection, not a claim about every wallet or strategy: a wallet that sold down a transferred-in position before redemption could see the opposite bias.

If you run wallet forensics on Polymarket — copy-trading products, leaderboard screens, academic work using displayed profit as a skill proxy — this failure is worth checking for in your own pipeline. It produces confident, specific, technical output that happens to be wrong.

Polymarket’s /activity feed enumerates twelve event types — TRADE, SPLIT, MERGE, REDEEM, REWARD, CONVERSION, DEPOSIT, WITHDRAWAL, YIELD, MAKER_REBATE, TAKER_REBATE, REFERRAL_REWARD — and none of them is a token transfer. A wallet-to-wallet share transfer does not appear as its own event in either /trades or /activity, and displayed profit does not net it out. It is not invisible outright: it is a plain ERC-1155 transfer, visible on Polygon to anyone willing to do what Section 03 did.

The calls behind Sections 02 and 03, in full: