In 1906, Francis Galton, an English polymath who founded differential psychology (and, alas, eugenics), ran an experiment novel for its time. At a fair, visitors could pay sixpence to guess the weight of an ox.<\/p>\n\n\n\n
Galton hoped to collect the \u201cvotes\u201d of a crowd with disparate knowledge and skills to buttress his hunch about the dangers of universal suffrage. Just as a broker cannot eyeball an animal\u2019s weight, he supposed, neither can a farmer judge politicians\u2019 competence. <\/p>\n\n\n\n
The results said otherwise. Aggregating 787 entries and taking the median, Galton found, to his surprise, that the \u201caverage voter\u201d missed by a single pound\u2014remarkably accurate, given the ox weighed 1,198 pounds.<\/p>\n\n\n\n
The claim that, in forecasting, the uninformed majority can outperform individual experts is enticing to democrats\u2014and, as specialists in behavioral economics<\/a> know, flatters consumers of all political stripes.<\/p>\n\n\n\n But does \u201cwisdom of crowds\u201d apply to modern prediction markets? This was questioned<\/a> by researchers at London Business School and Yale. Analysing Polymarket transactions from 2023 to 2025, they reached a deflating conclusion for most: 3.14% of participants capture 30% of profits. <\/p>\n\n\n\n \u201cPrediction markets are remarkably accurate, but the source of this accuracy is not the \u2018crowd\u2019. [\u2026] Information aggregation in prediction markets operates differently from what the conventional crowd wisdom view implies. Rather than many participants each contributing partial information, prices appear to be set by a small number of informed traders who are skilled and whose trades move prices in the direction of final outcomes. The remaining participants provide liquidity and trading volume but contribute little to price formation,\u201d the authors conclude.<\/em><\/p>\n<\/blockquote>\n\n\n\n They point not only to speculative behaviour by traders, but also to numerous signs of insider dealing. <\/p>\n\n\n\n Such accusations are routinely levelled at Polymarket and Kalshi, for which Donald Trump Jr., the elder son of the sitting US president, serves<\/a> as a strategic adviser. After a scandal<\/a> over bets on a military operation in Venezuela, Congress began debating a ban<\/a> on prediction markets that touch on matters of public importance. Kalshi has already responded to possible regulation and began blocking<\/a> accounts, for instance those of politicians wagering on their own campaigns. <\/p>\n\n\n\n Incidents of another sort attract far less attention. Seemingly minor, they are increasingly ensnaring ordinary users. <\/p>\n\n\n\n In early March the radical Shia group Hezbollah fired rockets into northern Israel. In response the IDF<\/span> resumed a ground operation in southern Lebanon while striking Beirut and Tyre from the air. <\/p>\n\n\n\n As American diplomacy joined efforts to calm the conflict, Polymarket opened a prediction market inviting users to bet<\/a> on the date of an officially declared ceasefire between Israel and Hezbollah. <\/p>\n\n\n\n On 16 April US President Donald Trump announced a truce to take effect at midnight on 17 April. Soon after, the market\u2014having amassed more than $112m\u2014was closed early at the request of a user who had bet on \u201cYes\u201d before 18 April. <\/p>\n\n\n\n The decision angered those who had forecast that no ceasefire would be reached by the stated date. First, the ceasefire was largely formal: within hours of its supposed start, official Beirut accused<\/a> the IDF of new strikes on its territory. Second, Lebanon is not an active party to the current conflict, and Hezbollah said<\/a> it would not join talks until Israel withdrew its troops and freed the group\u2019s imprisoned supporters.\u00a0<\/p>\n\n\n\n Those unhappy with the closure, as the rules allow, tried to contest it via UMA\u2019s oracle platform<\/a>. They failed there, too: 86.6% of votes, weighted by delegates\u2019 token holdings, backed Polymarket\u2019s decision and just 1.48% opposed it. \u201cYes\u201d amassed ~14.5m tokens. On 16\u201317 April UMA traded around $0.45. <\/p>\n\n\n\n That sparked another wave of comments on the closed market. Angry users accuse Polymarket and UMA of collusion, criticise the oracle\u2019s model for letting whales sway outcomes, complain about the admins\u2019 silence and demand compensation. <\/p>\n\n\n\n \u201cIf Polymarket cannot reverse a final on-chain result, it should still consider refunds or compensation in cases where a disputed market failed to provide adequate protection against contested rule interpretation. This is a matter of market integrity, not just trader displeasure,\u201d one user notes. <\/em><\/p>\n<\/blockquote>\n\n\n\n At the same time, a similar incident unfolded, also tied to the Middle East. Yuri Yatsenko, co-founder of a Web3<\/a> start-up, posted<\/a> on X: \u201cA $50m crime is happening on Polymarket right now.\u201d\u00a0<\/p>\n\n\n\n The trigger was a market on a ceasefire between the US\u2013Israeli coalition and Iran. Under the rules, a positive resolution would be counted if the parties observed a ceasefire for 14 days, or 336 hours. Polymarket\u2019s admins held that they had. Yet, Yatsenko notes, on 7 April\u2014the day the market was resolved in favour of \u201cYes\u201d\u2014rocket attacks continued for 20 of the 24 hours.<\/p>\n\n\n\n \u201cDisputed resolutions sent to the UMA voting; 50 new wallets opening large \u2018Yes\u2019 positions before the announcement; one wallet turning roughly $72,000 into roughly $200,000 within hours,\u201d Yatsenko concludes.<\/em><\/p>\n<\/blockquote>\n\n\n\n Experience suggests such disputes rarely end well for prediction-market punters who feel cheated. In March 2025 Polymarket refused<\/a> to compensate users harmed by the premature, incorrect resolution of a market on a US\u2013Ukraine minerals deal. <\/p>\n\n\n\n Researchers found<\/a> that three large UMA tokenholders, accounting for 25% of votes, pushed through the unjust outcome. Polymarket acknowledged a governance attack, calling it \u201cunprecedented\u201d. <\/p>\n\n\n\n \u201cThis is not part of the future we want to build. We will create systems, monitoring and more to ensure it does not happen again,\u201d the platform said at the time.<\/em><\/p>\n<\/blockquote>\n\n\n\n Back in August 2024 Vitalik Buterin wrote<\/a> that \u201cto classify Polymarket as gambling is to misunderstand what prediction markets are.\u201d In that, the Ethereum co-founder\u2014himself well-versed<\/a> in how such venues work\u2014was quite right. <\/p>\n\n\n\n By 2026, prediction markets had indeed shifted from advanced bookmakers into yet another piece of infrastructure in which ordinary users are merely liquidity for big players.<\/p>\n\n\n\n ForkLog contacted Polymarket on April 23 and 28 to request a comment on these developments. We have yet to receive a reply.<\/p>\n","protected":false},"excerpt":{"rendered":" Two recent incidents that expose outcome manipulation on Polymarket.<\/p>\n","protected":false},"author":1,"featured_media":96673,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"How prediction markets became corporate barbershops","creation_source":"human_ai","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[1144],"tags":[2295,1148,1595],"class_list":["post-96672","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-longreads","tag-middle-east","tag-polymarket","tag-prediction-markets"],"aioseo_notices":[],"amp_enabled":true,"views":"13","promo_type":"1","layout_type":"1","short_excerpt":"How prediction markets became corporate barbershops","is_update":"0","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/96672","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=96672"}],"version-history":[{"count":5,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/96672\/revisions"}],"predecessor-version":[{"id":96681,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/96672\/revisions\/96681"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/96673"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=96672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=96672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=96672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
Beirut\u2019s 3D chess<\/h2>\n\n\n\n
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A $50m \u201ccrime\u201d<\/h2>\n\n\n\n
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