Polymarket rules are changing. How should the airdrop community respond?

Author: Chloe, ChainCatcher

Polymarket’s updated 《Market Integrity Rules》, officially announced on March 23, now apply in sync to its DeFi platform and to the U.S. exchanges under CFTC oversight. The new rules clearly ban three categories of insider trading and strengthen the crackdown framework against market manipulation. This policy shift did not emerge out of thin air; it is the product of a chain of controversies and public-opinion pressure, and it is also Polymarket’s compliance self-rescue action before U.S. mainstream financial regulators dealt a blow.

However, the new rules affect not only real insider players—do they pose a more direct threat to the interests of the massive “farming” user base? Or do they target the professional arbitrageurs that truly provide liquidity?

The pressure behind the rule upgrade: from a Venezuelan coup to the Iran war

Looking back at the public-opinion and regulatory pressure Polymarket has faced over the past few months. In early January 2026, an anonymous user spent $32,537 on Polymarket and bet that “Maduro will be ousted by January 31.” After Trump announced on Truth Social at 4:21 a.m. that Maduro was arrested, the user immediately received returns as high as $436,000, with an ROI of more than 13 times.

Investigations found that the account was only created in December 2025, that all the bet targets accurately pointed to Venezuela’s political situation, and that the betting time points were just a few hours before the event erupted. In this regard, Dennis Kelleher, co-founder of Better Markets, said the deal has all the hallmarks of insider trading: a newly created account, a large amount of funds, precise predictions of timing, and everything occurring in an unregulated, low-transparency market.

Not surprisingly, around the same period, Polymarket also saw suspicious trades related to “the timing of the U.S. taking action against Iran,” with some accounts setting up positions precisely on the eve of the U.S. military strike, profiting hundreds of thousands of dollars.

值得注意的是，Polymarket CEO Shayne Coplan 曾在 CBS 新闻的采访中说过一句耐人寻味的话：“内幕人士在市场中占有优势是件好事。

”然而，现实是 2026 年 3 月，参议员 Adam Schiff 与 John Curtis 联合提出跨党派立法，计划禁止预测市场上“类似体育或赌场游戏”的交易合约。商品期货交易委员会（CFTC）则在同月发布指引，要求预测市场平台采取防范内幕交易的具体措施，并鼓励交易所在设计事件合约时，主动与监管机构协商识别“操纵或价格扭曲风险”。

监管的围猎已然形成，Polymarket 的政策升级，是对这场围猎的主动回应。

Breaking down the new rules: three bans and a multi-layer monitoring framework

On March 23, 2026, Polymarket officially released updated Market Integrity Rules, clearly drawing three red lines: first, trades based on stolen confidential information; second, trades based on illegal sources of information; third, trades by those whose positions can influence outcomes.

On the front of market manipulation, the rules further explicitly prohibit spoofing, wash trading, fictitious transaction, and other behaviors. In response to these bans, ChainCatcher, in an interview with ChainCatcher (the chain habit society), said that judging the boundary between “wash trading” and normal trading lies in whether it generates real value and whether it bears trading costs. The “wash trading” of volume is carried out by the same group passing orders with one hand to the other—purely for data. Normal arbitrage or market making, by contrast, involves placing limit orders at different price levels while bearing the risk of holding positions. Each trade is executed against real market participants and can stand up to scrutiny.

In terms of the execution architecture, Polymarket uses a “multi-layer monitoring” design. On the DeFi platform side, all trades are recorded on the Polygon chain, and anyone can view them publicly. The platform partners with world-class monitoring technology and professional institutions for on-chain anomaly detection. Once suspicious behavior is identified, the sanctions that can be taken include banning wallet addresses and referring users to law enforcement agencies.

On the Polymarket US side (CFTC-regulated exchange), monitoring is divided into three layers: external monitoring technology partners, a real-time monitoring desk, and a regulatory services agreement signed with the U.S. National Futures Association (NFA). The latter can directly launch investigations and sanction violators. Sanctions include suspending eligibility, terminating accounts, imposing monetary penalties, or referring cases to regulatory authorities.

For “farming” users: benefits and the dilemma for related studios?

Polymarket’s move is a heavy blow to “insider players,” but it may spark different reactions among the “farming” user group and related studios. In response to the new rules, the market’s big players’ reactions are intriguing. According to ChainCatcher’s interview with ChainCatcher (the chain habit society), whose historical trading volume on Polymarket has already exceeded $200 million, the new rules were expected—indeed, long-awaited. They believe this is not a crackdown, but a sign that the market is moving toward maturity. As early as the platform began charging fees, the professional teams had already anticipated that it would eventually start charging the entire market and strengthen regulation.

For ordinary “airdrop farmers” who spam volume, in the past they relied on generating massive on-chain records and “wash trading” via dual-account back-and-forth in a single market—only to collide head-on with the new rules. Some even evolved into a matrix controlling 100 wallets, or hedged between Polymarket and Kalshi, but with the upgrade to the monitoring system, the risk of such behavior has increased dramatically.

ChainCatcher believes that truly high-quality strategies should not be about “farming,” but about genuine arbitrage. Arbitrage itself is the process of discovering price discrepancies and fixing market inefficiencies—healthy behavior that prediction markets need. As gray operations are squeezed out, the market will become cleaner, and the returns of professional arbitrageurs may actually be higher.

The liquidity dilemma: are wash-volume users parasites, or infrastructure?

In addition, behind this round of regulation there is a contradiction Polymarket cannot avoid: Polymarket’s liquidity is not naturally formed. According to on-chain data, 80% of users on the platform place a single bet of less than $500. Over the past month, the average single-bet amount has been only around $100. Therefore, what truly supports market depth is a tiny number of large traders and liquidity providers.

值得探讨的是，空投农民当中采取“合法策略”（如提供双向流动性、跨平台套利）的群体，是否在客观上扮演了非正式做市商的角色？

They narrow the bid-ask spread and improve the market’s capacity, allowing ordinary users to build positions at more reasonable prices. On the other hand, from a business logic perspective, after Polymarket returns to the U.S. market, it urgently needs vast amounts of real trading and depth data to prove the effectiveness of its market to the CFTC (U.S. Commodity Futures Trading Commission). This is crucial for obtaining further regulatory approval.

If the new rules are overly aggressive and scare off this group of “farming” users, liquidity drying up in the short term is almost inevitable, especially in long-tail niche markets, where these farmers are often the only source of counterparty liquidity.

In response, ChainCatcher says the platform should recognize the contributions of users who provide real liquidity. For example, in a multi-account system, if someone contributes millions of dollars in trading volume every day and all of it is maker limit orders, that is exactly what the platform’s mechanism encourages. Especially in events with low volatility and poor liquidity, these standing orders give the order book depth, allowing ordinary users to get filled. This behavior is, in essence, exchanging capital and time for rebates while serving the market.

Under regulatory compliance, do the related studios also need a strategic pivot?

It can be said that Polymarket’s move toward compliance is not just a brief market fluctuation, but a signal of the platform’s strategic shift.

From acquiring the licensed exchange QCX to signing an agreement with the NFA, everything indicates that prediction markets are converging toward traditional financial regulation. In such a highly transparent and regulated path, the space for “low-quality wash-volume” to survive will only get narrower. ChainCatcher believes the new rules are actually favorable for professional teams. In the future, they will take three countermeasures: first, increase liquidity provision to secure more maker rebates; second, actively discuss deeper market-making plans with the platforms; third, continuously optimize strategies to improve returns under the premise of compliance.

Overall, for studios that view Polymarket as their core profit source, now is the critical turning point where the strategic focus should shift from “quantity” to “quality.” Instead of controlling 100 wallets to conduct low-quality back-and-forth wash-volume—taking on the risk of being precisely identified by the monitoring system and collectively banned—there is a better choice: give up the multi-wallet matrix and operate a small number of high-quality accounts. Through deep trading driven by genuine market research, or by focusing on liquidity provision within the platform’s rules, you can not only effectively avoid the risk of bans, but also more likely receive a more favorable allocation in the final airdrop weighting calculation for contributing real value.