Polymarket says governance attack by UMA whale to hijack a bet’s resolution is ‘unprecedented’

Crypto-based prediction market platform Polymarket said it is "aware" of the alleged governance attack on one of its bets, possibly involving the manipulation of its UMA oracle provider.

Between March 24 and 25, a $7 million Polymarket bet, "Ukraine agrees to Trump mineral deal before April?" surged from a mere 9% yes chance to a 100%, sparking controversy and speculation of coordinated manipulation. 

The $7 million bet resolved to a "yes" despite Ukraine not yet officially agreeing to U.S. President Donald Trump's deal aiming to gain access to Ukraine's critical mineral resources.

Multiple Polymarket users alleged on social media platforms X and Reddit that a "UMA whale" — a large holder of Polymarket's vote-determining UMA tokens — cast a significant number of votes to yield a resolution in their favor. 

"You must stop betting on Polymarket," wrote X user @Web3Marmot. "The event outcomes are determined by a group of influential users who secure positions and then vote in their favor, regardless of the actual results."

In response, Polymarket posted on its Discord server, admitting that the market resolved against expectations. However, Polymarket said it will not issue refunds to bettors as it "wasn't a market failure."

"This is an unprecedented situation, and we have been in war rooms all day internally and with the UMA team to make sure this won't happen again," a Polymarket team member said on its Discord channel on Wednesday.

The bet was resolved contrary to the actual event

UMA, or Universal Market Access, is an optimistic oracle that Polymarket uses to determine the outcomes of prediction markets. 

Polymarket allows anyone to post a resolution for a bet by staking a $750 bond in USDC.e, which can be challenged. When the market resolutions are contested, the oracle system enables UMA token holders to participate in a decentralized vote to determine the final result.

For the case of the bet on U.S.-Ukraine mineral deal, Polymarket made a clarification saying that it was too early to resolve the market as the two countries have not come to a mutual agreement.

While Polymarket, aware of the situation, trusted the UMA vote to correct the result, users were again left with a resolution likely manipulated by "whales."

"Polymarket is supposed to be a decentralized truth machine, but now an anon whale can vote anyway to manipulate the result," another user going by @0xcoconutt wrote. "This is dangerous and a terrible model that should be modified."

Polymarket has sought community feedback on its Discord channel regarding potential measures to prevent future platform exploits without outlining specific actions it would take. It said it would announce more details and develop solutions for more transparent rules.

The protocol has previously faced criticism for subjective decisions in contentious market outcomes.

Last year, Polymarket overturned the UMA resolution for a market betting on whether Barron Trump was involved in Solana-based DJT memecoin. Despite UMA resolving the market to 'No,' Polymarket overturned the result, leading to speculation about undue influence from large UMA token holders.

The U.S. Commodity Futures Trading Commission previously said in its legal case against Kalshi that unregulated prediction markets, including Polymarket, are prone to manipulation. 

The Block has reached out to Polymarket for further comments on the matter.

Updated to add context on Polymarket's initial clarification prior to UMA voting.