The popular decentralized event-betting platform, Polymarket, has suffered an oracle manipulation breach on a political bet contract after a governance attack allegedly allowed a major UMA token holder to manipulate the oracle system.
According to a report from Wu Blockchain, the incident centered around a high-stakes market titled “Ukraine agrees to Trump mineral deal before April?” Despite no official confirmation of such a deal, the market was controversially resolved with a “YES” outcome, leading to the resolving of $7 million in bets which brought significant gains for some traders while others suffered heavy losses.
Polymarket relies on UMA’s Optimistic Oracle to verify outcomes, with UMA token holders voting to determine results. However, the governance power appeared to be exploited in this case as a major UMA whale allegedly spent 5 million tokens to push the vote in favor of “YES.”
This whale controlled over 25% of the total votes which are enough to overturn the majority decision. Despite objections from traders and a lack of official confirmation, the market settled in favor of the whale’s vote with it allegedly pocketing massive profits.
While former U.S. President Donald Trump did state on March 25 that a revenue-sharing deal with Ukraine was expected soon, there was no formal agreement signed between the two governments, according to Reuters.
Despite this, UMA token holders – who benefit from outcomes that align with their financial interests – voted in favor of the whale’s position rather than waiting for clearer evidence. This raises concerns over the integrity of decentralized betting markets and whether governance power can be exploited for financial gain.
Polymarket has yet to issue an official statement on the matter, but the incident has ignited debates about the risks of centralized influence within supposedly decentralized systems.
