5 hours ago
Polymarket is locked successful different contention implicit the mentation of UMA, a decentralized oracle that utilizes token holder voting to resoluteness prediction markets.
UMA – a protocol which is simply a abstracted entity from Polymarket – is nary alien to controversy, having ruled before with interpretations that adjacent Polymarket doesn't hold with.
This time, it’s astir Ukrainian President Volodymyr Zelenskyy's attire: Polymarket bettors were asked if the typically casual person would look successful a suit earlier July.
On June 25, Zelenskyy wore an outfit described by the BBC, New York Post, and others arsenic a suit. Yet the marketplace is acceptable to resoluteness “No,” sparking outrage from those acceptable to suffer their bets connected the $200 cardinal market.
"UMA's voting incentives promote radical to ballot with the perceived bulk to debar penalties, not based connected factual correctness," RememberAmalek said. "This creates conditions ripe for manipulation."
RememberAmalek is simply a salient Polymarket bettor who earned $300,000 predicting Zohran Mamdani's upset triumph successful New York's mayoral superior by identifying captious flaws successful polling information and betting against accepted wisdom. Between his aggregate accounts, he's earned good implicit $1 cardinal successful wins.
In UMA's quality solution system, voters involvement tokens to enactment successful deciding marketplace outcomes. Those who ballot against the last statement look penalties known arsenic "slashing," wherever a information of their staked tokens is confiscated oregon reduced.
This economical punishment operation motivates voters to align their choices with the anticipated bulk opinion, adjacent erstwhile it contradicts their genuine mentation of factual correctness.
"One idiosyncratic holding millions of tokens and deciding multi-million dollar outcomes is not decentralization," helium said, referring to UMA's largest whales that clasp a controlling stock of tokens and sometimes slash those that ballot against them.
On-chain information parsed by IntotheBlock shows that 95% of UMA tokens are held by ample holders. For the involvement of comparison, conscionable implicit half of ETH tokens are held by ample holders.
"It undermines the full constituent of utilizing prediction markets to find truth," the trader continued.
Reflecting connected his ain strategies, RememberAmalek admitted openly to betting connected UMA resolutions alternatively than the underlying facts of markets.
"Polymarket and UMA request an contiguous rethink of their solution mechanism," helium said. "Every large quality damages idiosyncratic trust, peculiarly smaller bettors who consciousness scammed and leave."
And what's the solution successful his eyes? Perhaps ironically, centralization.
But done professionally and transparently. By Polymarket itself, not immoderate extracurricular protocol.
Because close now, "this isn't decentralized," helium concludes.
Read more: Polymarket Embroiled successful $160M Controversy Over Whether Zelenskyy Wore a Suit astatine NATO
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