A small group of traders extracted $8.2 million from Polymarket’s five-minute bitcoin contracts by pushing the spot price on Binance just before settlement, researchers from Stanford University and Singapore Management University found.
Key Takeaways
Stanford and SMU researchers found 821 traders took $8.2 million from Polymarket’s 5-minute bitcoin bets.Net order flow on Binance jumped about 50% in the final 10 seconds before settlement, the study found.The paper says 15-minute contracts show far less abuse, pointing to longer settlement windows as the fix.Describing the profits, the authors wrote that manipulators “take $8.2 million in the pushed cycles while breaking even in the rest.”
A Recurring Pattern in the Final 10 SecondsThe fingerprints show up in the order books because after the five-minute contracts launched, net order flow on Binance in the final ten seconds before each close jumped roughly 50% above pre-launch levels. The bursts were concentrated and directional, arriving precisely as the betting windows expired.
Neither Polymarket nor Chainlink has publicly responded to the paper’s findings, and the authors stopped short of alleging any rule-breaking by the platform itself. Whether the platform adjusts that design is now an open question.
