Polymarket Breaks 'Deafening' Silence on Oracle Manipulation Allegations

Crypto-based prediction marketplace Polymarket apologized on its Discord server for what it described as an “unprecedented situation,” after users flagged apparent manipulation of market results by UMA whales.

UMA is Polymarket’s oracle system whereby the results of betting markets are determined by recourse to external sources of data, and by staking UMA tokens behind a particular resolution. For example, if there were a market that allowed users to predict whether the sun would rise tomorrow, UMA holders would be rewarded for backing “yes” and risk losing their tokens if they chose "no."

But now, in apparent response to allegations of manipulation, Polymarket took to its Discord early Wednesday to acknowledge a “situation regarding the Ukraine Rare Earth Market.”

Polymarket did not immediately respond to a request for comment from Decrypt.

Official announcement from Polymarket Discord:

...we are not able to issue refunds... - OF COURSE. WHO'D DOUBT IT?

...This is an unprecedented situation... - NO, IT'S HAPPENED MANY TIMES BEFORE; LOOK AT THE QUOTED THREAD.

...this won't happen again... - NO, IT'S HAPPENED MANY… https://t.co/iqHU10PeOP pic.twitter.com/owA60yUHKK

— MARMOT (@Web3Marmot) March 26, 2025

The market asked whether Ukraine would agree to a mineral deal with the U.S. before April. And despite the fact that no such deal has been agreed, UMA participants have resolved in the affirmative.

They resolved as “yes” even after this outcome was disputed on two separate occasions, with Polymarket admitting in its Discord post that the “market resolved against the expectations of our users and our clarification.”

Even though it has admitted that such an outcome “is not a part of the future we want to build,” Polymarket has also said that, because the issue “wasn’t a market failure,” it can’t offer compensation or refunds.

The post also affirms that the company is working to ensure that such a situation does not repeat itself, with the platform promising more details in the near future as it collaborates with the UMA team on finding a solution.

However, some users and observers have claimed that manipulation of market outcomes by UMA whales has been ongoing for at least several weeks.

Polymarket is revealing itself to be revealing itself a totally FRAUDULENT platform.

INSIDERS write rules, place bets, and co-ordinate with verifiers to RIG markets and SCAM their own customers for MILLIONS daily.

Last night they rigged market by @zerohedge to resolve NO,… pic.twitter.com/FW5yNZufTE

— Folke Hermansen (@hermansen_folke) March 11, 2025

In a March 11 thread on X, Norway-based equity analyst Folke Hermansen flagged several markets which he alleged had been manipulated by UMA whales, including a market created by ZeroHedge which asked whether the U.S. Government would confirm that Fort Knox actually holds less gold than previously recorded.

According to Hermansen, two addresses “control over half the votes” within the UMA system, with one whale accounting for 25% of the votes cast in the above Fort Knox market

Hermansen also suggests that the UMA system is structured in such a way that it creates a tendency towards clustering, given the risk of losing UMA tokens in the event that you stake behind the losing side.

“This is because when you vote you stake your tokens and if you vote ‘wrong’ – i.e. not what the majority voted for – you [lose] those tokens,” he posted on X.

Speaking to Decrypt, Hermansen said his impression is that “manipulated/fraudulent markets” are increasing in frequency on Polymarket.

“Polymarket’s silence on the issue has been deafening and perhaps even inculpatory,” he told Decrypt. “Polymarket saw a massive user growth running up to the election, but a slow down afterwards—so this may just be an effort to capitalize short term on what would be a dying platform instead of trying to build something for the long term.”

Polymarket’s monthly volume declined from $2.5 billion on Nov. 1 to $687.9 million on March 1, according to data from Dune.

While the run-up to the U.S. presidential election was a busy time for Polymarket, it faced accusations in late October that wash trading was taking place on its platform, as concluded in separate investigations by Chaos Labs and Inca Digital.

Edited by Stacy Elliott.