Disputed Market Resolution Triggers Backlash
Blockchain-based prediction platform Polymarket has acknowledged a growing controversy over the integrity of its oracle system, following allegations that large holders of UMA tokens manipulated market outcomes. The issue surfaced over a market asking whether Ukraine would sign a mineral deal with the U.S. by April — a deal that hadn’t occurred, yet was resolved as “yes.”
Polymarket Apologizes But Offers No Refunds
In a Discord post, Polymarket called the situation “unprecedented,” but stated it could not offer compensation because it wasn’t technically a system failure. The company promised changes to prevent such manipulation in the future, but the immediate outcome left many users dissatisfied.
Whale Dominance in UMA Voting System
Equity analyst Folke Hermansen claims two wallet addresses control over half the votes in UMA’s dispute resolution system, creating a structural vulnerability. He also cited other allegedly manipulated markets, including one concerning the U.S. gold reserves at Fort Knox.
Calls Grow for Oracle Reforms
Hermansen and others argue that Polymarket’s design encourages vote clustering and deters honest minority opinions, as losing voters forfeit their staked tokens. Despite a major rise in popularity during the 2024 U.S. election season, Polymarket’s monthly volume has dropped sharply — from $2.5 billion in November to $687.9 million in March, per Dune Analytics.
