Polymarket is facing scrutiny following a controversial settlement in a political betting market. The issue arose from a market predicting whether U.S. President Donald Trump would finalize a rare earth mineral deal with Ukraine before April. Although no agreement occurred, the market was resolved as “Yes” on March 25, leading to backlash from users and industry observers.
Crypto threat researcher Vladimir S. indicated that a governance attack may have influenced recent outcomes in the UMA Protocol. He highlighted that a single whale used three accounts to cast 5 million tokens, representing 25% of total votes, which allowed the manipulation of the platform’s oracle system and resulted in the market settling on false outcomes for profit.
Polymarket uses UMA Protocol’s blockchain oracles to validate real-world events and resolve market outcomes. A disputed market on Polymarket reached over $7 million in trading volume before a controversial settlement occurred. A user, Tenadome, claims the settlement resulted from negligence by UMA whales linked to the UMA team, who usually do not trade on Polymarket. Tenadome alleges that these voters ignored clarifications to secure rewards and evade penalties.
Despite the backlash, Polymarket has stated it will not issue refunds, maintaining that the incident does not qualify as a platform failure.
“We are aware of the concerns surrounding the Ukraine Rare Earth Market,”
said Polymarket moderator Tanner.
“This market resolved against the expectations of our users and our clarification. Unfortunately because this wasn’t a market failure we are not able to issue refunds.”
In response to the controversy, Polymarket has pledged to introduce new monitoring mechanisms to prevent similar occurrences, calling this an “unprecedented situation” requiring stricter oversight.
Meanwhile, Polymarket experienced a surge in activity as users placed bets on Canadian Prime Minister Justin Trudeau’s political future. The platform had assigned an 80% probability that Trudeau would resign by the end of January 6, reflecting heightened speculation over his leadership amid shifting political dynamics.
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