Data Modeling: How to Enhance the Quality of Interactions on Polymarket?

This article is from: arise

Editor｜Odaily Planet Daily (@OdailyChina); Translator｜Azuma (@azuma_eth)

The core message of this article is simply — how to prepare for the potential largest airdrop in the prediction market sector.

Data Issues That Must Be Clarified

Before building any model, we need accurate, reliable data. Polymarket’s trading volume data has long been widely misreported.

In December 2025, Paradigm published a key research finding: most Polymarket dashboards calculate trading volume by summing all “OrderFilled” events. However, this event triggers on both the order placement and the fill side of a trade, leading to double counting. The actual trading volume is roughly half of what the dashboards show.

Dashboard trading volume vs. unilateral trading volume — the latter is the truly important figure for airdrop modeling.

This is crucial for airdrop modeling. If Polymarket considers trading volume as a metric, they will rely only on internal data rather than various statistics from Dune. Your actual “score” for trading volume is likely only half of what tools like Polycool display.

User Distribution

Regarding airdrop speculation, the most important dataset comes from research by IMDEA Networks Institute, covering over 86 million trades (April 2024 – April 2025).

• Only 0.51% of addresses achieved profits exceeding $1,000;
• Only 1.74% of addresses (estimated) had trading volumes over $50,000;
• The top 3 arbitrage addresses extracted $4.2 million in “risk-free profit”;
• The top traders can profit over tens of millions of dollars.

In terms of LP rewards, the stratification is even more apparent.

79% of traders have never earned even $1 in LP rewards — this is a currently overlooked interaction. Out of 314,000 traders, only 66,567 wallets have received LP rewards. This means only 21% of traders have provided liquidity. Compared to overall participation, this reward mechanism is significantly undervalued.

Lower engagement levels are generally seen as “underestimated” signals in airdrop models.

Historical Airdrop Precedents: What Have They Taught Us?

All major DeFi airdrops reward “active behavior,” not “profitability.” Polymarket will follow the same logic.

Common features of large-scale airdrops include:

• Pure equal distribution can be exploited by sybil attacks (Polymarket will definitely not distribute evenly);
• Distribution based solely on volume can lead to excessive concentration among whales (PR risks + SEC risks);
• The best strategy: tiered levels + reward caps + multi-dimensional metrics (volume + LP + diversity + activity duration);
• In all major airdrops, even losers are rewarded — profit and loss (PnL) are not standard criteria.

This last point is critical: if you trade $100,000 and lose $20,000, you are more likely to receive a reward than someone who earns $500 on a $1,000 trade. Platforms do not want to incentivize only profitable traders — that makes it easier to identify insiders.

Reverse Thinking: How to Limit Whales?

Some airdrop calculators on the market use the simplest proportional volume model: Airdrop share = individual volume / total volume × total airdrop amount.

This is incorrect because mainstream airdrops typically use a “diminishing curve.”

I prefer a model where Polymarket limits whale airdrops through a square root compression — for example, if volume increases fourfold, the score only doubles. This would drastically change the results for whale-targeted airdrops.

So how much would top wallets receive? Suppose the total POLY supply is 10 billion tokens, with 7.5% allocated for community airdrops (750 million POLY), and the FDV at TGE is $3–9 billion.

Without limits on individual addresses, if trading volume is $85 million (taking top trader fredi999 as an example), the model estimates they could receive about 3–5 million POLY. At a $9 billion FDV, that’s roughly $30–45 million. Theoretically feasible, but PR-wise, very poor.

A more realistic approach is to cap individual airdrop amounts, say between 500,000 and 2 million POLY. Under a $5 billion FDV, the top address could receive about $4.5–10 million.

“LP” and “Volume”: Where Are the Opportunities Now?

If you start interacting with Polymarket in February 2026 with a $5,000 principal, mathematically, the more advantageous approach for new participants is to deploy LP.

• To earn $49 in LP rewards (top 10%), you need to place limit orders in high-reward markets continuously. Using $500–$1,000 capital, this can be achieved within 30–60 days.
• To earn $1,563 in LP rewards (top 1%), higher capital or sustained high-frequency participation is required.

Regarding volume, you should avoid wash trading and aim to accumulate genuine trading volume:

1. Trade in more than 5 different categories of markets (politics, crypto, sports, science, culture);
2. Hold positions for at least 1–24 hours before closing;
3. Avoid cross-market manipulations across different addresses;
4. Accept moderate losses — proof of “genuine participation”;
5. Target market volume > $500,000 (Polymarket may filter micro-markets);
6. Single bet size: $50–$500.

Airdrop Modeling Predictions

Airdrops will not be as most expect.

Most guesses are based on simple volume-weighted distribution, but Polymarket will be smarter and more interesting. They have on-chain LP data, which is clean, verifiable, and denominated in USD. They also have volume data that can filter out sybil attacks. Additionally, they possess data on wallet age, market diversity, and geographic distribution.

Here is my model — Polymarket has not confirmed any of this, so it’s just my speculation.

• Volume weight: 40% — using a square root compression formula, with a minimum threshold around $500;
• LP rewards: 35% — on-chain verifiable, resistant to sybil attacks;
• Market diversity: 15% — number of independent markets participated in;
• Activity duration: 10% — active months before snapshot.

Furthermore, Polymarket will likely impose a cap on rewards per address (possibly $500,000), otherwise the top 50 addresses could dominate the share, undermining community narrative. Losers will be rewarded equally with winners of similar volume — profit is not the standard. This creates unreasonable incentives and distortions.

79% of traders have never received even $1 in LP rewards. If LP weight accounts for 35% of the airdrop formula, the most capital-efficient behavior now is to place limit orders in high-volume markets and start accumulating traceable on-chain contribution proofs.

In short, POLY could become the largest prediction market airdrop in history. With a $9 billion FDV, the total community airdrop value could reach $450 million to $900 million. Even capturing just 0.1% of that would be $450,000. That’s why optimizing LP data now is more important than most realize.