Polymarket is under scrutiny following allegations of a governance attack involving a significant holder of Universal Market Access (UMA) tokens.
Polymarket is under scrutiny following allegations of a governance attack involving a significant holder of Universal Market Access (UMA) tokens. The incident, which occurred between March 24 and 25, involved a $7 million bet on whether Ukraine would agree to a mineral deal with President Donald Trump before April.
The bet’s probability surged from 9% to 100%, leading to the market resolving in favor of "yes" despite Ukraine not officially agreeing to the deal.
Multiple users on social media platforms, including X and Reddit, accused a "UMA whale" of manipulating the outcome by casting a large number of votes. In response to the uproar, a Polymarket team member acknowledged in a Discord post that the market resolution went against expectations but stated that no refunds would be issued, as it was not deemed a market failure.
"This is an unprecedented situation," the team member noted, adding that internal discussions with the UMA team were ongoing to prevent similar incidents in the future. The platform has solicited community feedback on potential measures to enhance security and transparency but has not specified any immediate actions.
Polymarket utilizes UMA's optimistic oracle to determine market outcomes, allowing users to challenge resolutions by staking a bond. However, critics argue that this model is vulnerable to manipulation by influential token holders.
Previous controversies have included the overturning of a market resolution concerning Barron Trump and allegations of undue influence in decision-making.
The U.S. Commodity Futures Trading Commission has previously highlighted the risks of manipulation in unregulated prediction markets, further complicating the landscape for platforms like Polymarket.
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