Former quant alleges Kalshi engaged in wash trading on ETH perpetuals, claiming $539M notional volume from only $3.1M open interest with suspicious market maker behavior.
DeFi & Yields ·
A former quant has alleged that Kalshi engaged in wash trading on its ETH perpetual contracts, pointing to a gap between reported volume and underlying open interest. The market generated approximately $539 million in notional volume against only $3.1 million in open interest, and the accuser argues that fee rebates and a contract-count volume metric artificially inflate activity levels.
The allegation centers on suspicious repetition in trade patterns. A single trade size of $5,500 accounted for 48 to 58 percent of all ETH perpetual volume on four separate days, according to the former quant's analysis. He contends that market makers are incentivized to execute trades in this concentrated manner through volume-based deal arrangements offered by the platform.
Kalshi has not publicly detailed a response to these specific claims about its perpetual market mechanics. The distinction between prediction markets and perpetual futures contracts, and how volume is measured across these product types, remains a point of contention. Whether the pattern reflects intentional coordination, rebate-driven behavior, or other factors has not been definitively established.