Polymarket Trader Earns $233K From XRP Markets After Outsmarting Trading Bots

A trader on crypto prediction platform Polymarket has earned $233,000 after executing a calculated weekend strategy that exploited thin liquidity and automated trading bots. Notably, the move has drawn widespread attention across the crypto industry, with critics calling it market manipulation and urging Polymarket to take disciplinary action.

The incident occurred late Saturday night, a period when crypto markets typically see low trading volumes. During such hours, even modest trades can move prices sharply, yet the trader used this quiet window to turn small market distortions into a large payout.

How the XRP Bet Unfolded

The trader, identified by the wallet handle @a4385, focused on a Polymarket contract that asked whether XRP’s price would rise or fall between 12:45 p.m. ET and 1:00 p.m. ET on Jan. 17. The trader aggressively bought “UP” shares at almost any price, pushing the contract price to 70 cents.

At the same time, XRP’s spot price on major exchanges slipped by about 0.3%. That divergence triggered Polymarket’s automated market-making bots, which responded by selling more UP shares as prices rose. This allowed the trader to accumulate roughly 77,000 UP shares at an average cost of 48 cents.

Interestingly, two minutes before the contract settled, a Binance wallet reportedly linked to the trader purchased about $1 million worth of XRP. The buy pushed XRP’s price up by roughly 0.5%, just enough to ensure the contract settled in favor of the UP outcome. Each UP share was then redeemed at $1, locking in a sizable profit.

After settlement, the trader sold the XRP, pushing prices back down. Data from PolymarketHistory shows the trader spent about $6,200 in net costs, while several bots lost what amounted to a year’s worth of profits overnight. The trader reportedly repeated the strategy across multiple thin weekend markets, draining additional bot liquidity.

Calls for Smarter Bots and Stronger Rules

The episode highlighted weaknesses in Polymarket’s bots, which react to price changes without accounting for timing, volume, or adversarial behavior near settlement. Chris Tremulis, global head of commodities compliance at Goldman Sachs, warned that such incidents could hinder broader adoption.

“Prioritizing market integrity will be key for the leaders of prediction markets to achieve meaningful institutional adoption (if that’s what they want)… Stronger rulebook enforcement, quicker investigations from exchange surveillance staff, published disciplinary outcomes, and referrals to the CFTC will go a long way. Early days,” Tremulis asserted.

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