UMA Whale Incident Triggers Governance Assault on Polymarket

Allegedly, Polymarket was subject to a governance attack on their prediction market concerning Trump's Ukrainian mineral deal due to a whale's last-minute interference that swayed the results in their favor.

As per a report by Wu Blockchain, an insider whale spent 5 million UMA tokens to vote on the final outcome for the Polymarket betting pool called "Ukraine agrees to Trump mineral deal before April?"

Due to the whale's eleventh-hour intervention, it managed to overturn the final results by contributing 25% of the "YES" votes. Thus, the whale manipulated the final outcome using the UMA oracle.

Polymarket utilizes UMA's Optimistic Oracle to settle market outcomes and verify real-world events. UMA's oracle depends on community consensus, citing UMA token holders as "impartial arbiters of the outcomes of relevant markets."

The volume of funds that flowed into the betting pool amounted to over $7 million. As a result of the incident, many Polymarket traders who were betting "NO" incurred thousands in losses.

When the final outcome was announced, many traders argued that there was no official confirmation that indicated an agreement between President Trump and the Ukrainian government had been formally signed.

According to a report by Reuters, on March 25, Trump claimed that he expected a revenue sharing agreement between the U.S. and Ukraine will be "signed soon." However, traders disputed that this was not enough to confirm the results of the betting pool.

"This is a big joke, Zelensky just announced that they are looking into a bigger deal. Which means there was no deal before, wow real scam," said one Polymarket trader in the comments section of the betting pool.

"In the 2028 US presidential election, whoever owns more UMA will decide who wins the presidency, and Polymarket will become a joke," said another trader.

A user on X with the handle @Web3Marmot called out Polymarket in a recent post, accusing the prediction market platform of scamming its users. They alleged that event outcomes are not determined by real-world events. Instead, they claimed that final outcomes are determined by "influential users who secure positions and then vote in their favor, regardless of the actual results."

Moreover, they explained that UMA whales had voted "YES," despite the deal not having been officially signed nor announced. This means that UMA token holders ultimately decide the final outcome, not real-world events.

"The rules clearly state, "The resolution source for this market will be official information from the governments of the U.S. and Ukraine." Yet, there is no confirmation of the deal or the outcome of the decision," wrote Web3Marmot.

Polymarket's response to the controversy

In a post shared on Discord, a representative from Polymarket acknowledged the controversy surrounding the "Ukraine agrees to Trump mineral deal before April?" betting pool.

"We are aware of the situation regarding the Ukrainian Rare Earth Market. This market resolved against the expectations of our users and our clarification. Unfortunately, because this wasn't a market failure, we are not able to issue refunds," said Tanner, a Polymarket representative.

A governance attack occurred on Polymarket, where a UMA tycoon used his voting power to manipulate the oracle, allowing the market to settle false results and successfully profit. The tycoon cast 5 million tokens through three accounts, accounting for 25% of the total votes.

The Polymarket team views the situation as an "unprecedented situation" and claims they have been working together with the UMA oracle team to prevent it from happening again. Moreover, the team promises to share more details to traders as they attempt to understand the situation better and implement clearer rules.

"We're committed to building the future of prediction markets, which requires building resilient systems in which everyone can trust," wrote Tanner on the Polymarket Discord channel.