A betting contract on Polymarket has been found to be clearly manipulated, but the project team stated they would not refund participants.

Polymarket is controversial due to a betting contract manipulated by a whale.

The prediction market platform Polymarket stated that they have experienced a governance attack on one of their betting contracts.

Specifically, between March 24 and 25, the contract "Will Ukraine agree to Trump's mineral deal before April?" saw odds surge from 9% to 100%.

And so, this $7 million contract self-determined as "Yes" although in reality, Ukraine has not officially agreed to Trump.

First, it is necessary to explain how Polymarket works. With a betting contract A, the outcome of A is answered by the proposer. Each proposer must stake a bond of 750 USDC to be able to respond. If there is consensus, that will be the final outcome.

But if the answer is contested, the oracle system will allow holders of Universal Market Access (UMA) tokens to participate in a decentralized vote to determine the outcome.

With the Ukraine mineral contract, @Web3Marmot claimed that one person voted from three different accounts using 5 million UMA tokens, accounting for 25% of the total votes, to maintain the distorted market result. This created a "fake" result as above.

Many users have expressed dissatisfaction on X, even inciting calls to "boycott" Polymarket:

"You must stop betting on Polymarket immediately."

The results of the event are determined by a group of influential users, who self-select the outcome and then vote in favor of that direction, regardless of what the actual event is.

"Polymarket is said to be a decentralized truth system, but now there is an anonymous whale that can vote to manipulate the results. This is a terribly dangerous mechanism that needs to be amended immediately."

In response, Polymarket announced on Discord, acknowledging that the betting contract has self-resolved contrary to reality. However, the platform stated they would not refund participants because "this is not a failure on the platform's part."

"This is an unprecedented situation. We have held internal meetings, as well as meetings with the UMA team all day today to ensure this does not happen again."

Polymarket calls on the community to contribute ideas, suggesting potential measures to prevent similar manipulation incidents from occurring again. However, the project team has not specified the specific actions they will take, only stating that they will develop more transparent rule-based solutions.

This somewhat indifferent response has further fueled community criticism. Many point out that this manipulation is not the first time, as Polymarket claims.

Last year, with the betting contract "Is Barron Trump related to DJT memecoin on Solana?", UMA voted to resolve with the outcome being "No". But Polymarket flipped the result to "Yes" without further explanation.

Reddit user iamzheone wrote:

"This is not the first case and certainly not an isolated incident. There have been several similar manipulation cases, but with smaller value betting contracts. This time the value is larger, which is why it has attracted so much attention."

Previously, the U.S. Commodity Futures Trading Commission (CFTC) stated in its lawsuit against Kalshi that unregulated prediction markets, including Polymarket, are highly susceptible to manipulation.

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