Polymarket, the largest decentralized prediction market in the world, is under fire after a controversial result has raised concerns concerning the potential manipulation of governance in a political bet with high issues.
A Paris market on the platform has asked if US President Donald Trump would accept a mineral agreement of rare land with Ukraine before April. Despite no event of this type does not occur, the market has been settled as “yes”, triggering a backlash of users and industry observers.
This may indicate a “governance attack” in which a whale of the UMA protocol “used its voting power to manipulate the oracle, allowing the market to settle false results and to successfully take advantage”, according to the researcher with cryptographic threat Vladimir S.
“The magnate has thrown 5 million tokens through three accounts, representing 25% of the total votes. Polymarket has committed to preventing this from happening,” he wrote in a post of March 26.
Source: Vladimir S.
Polymarket uses UMA Protocol’s blockchain oracles for external data in order to settle market results and check real events.
Polymarket data show that the market has raised more than $ 7 million in a negotiation volume before settling on March 25.
Ukraine / Us Mineral Deal Deal Pool on Polymarket. Source: Polymarket
However, not everyone agrees to say that it was a coordinated attack. A pseudonym Polymarket user, Tenadom, argued that the result was the result of negligence.
“There is no” magnate “which” manipulated the oracle “, wrote Tenadom in a post of March 26, adding:
“Voters who have decided on this result are the same UMA whales who vote in each dispute, which (1) are largely affiliated with the UMA team and (2) do not negotiate on Polymarket, and they simply chose to ignore the clarification to obtain their rewards and avoid being cut.”
In relation: Polymarket whale increases Trump’s chances, sparkling manipulation concerns
Polymarket will not publish a refund
Despite the frustration of users, the polymarket moderators said that no reimbursement would be issued.
“We are aware of the situation concerning the Ukrainian market for rare land. This market has resolved against the expectations of our users and our clarification,” said the Polymarket Tanner moderator, adding:
“Unfortunately, because it was not a market failure, we are not able to issue reimbursements.”
Source: Vladimir S.
Polymarket said that it would build new surveillance systems to ensure that this “unprecedented situation” would not happen again.
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US elections fuel 565% of prediction markets increase
The prediction markets experienced significant growth in the third quarter of 2024, driven by betting on the presidential election of the United States.
The three main prediction markets for cryptography. Source: Flirtatious
The volume of Paris on the prediction markets increased by more than 565% in the third quarter to reach $ 3.1 billion in the three largest markets, against only $ 463.3 million in the second quarter.
Polymarket, the larger decentralized platform, dominated the market with more than 99% in September.
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