Nine crypto whales dominate polymarket disputes worth billions

Nine anonymous cryptocurrency wallets have effectively gained control over who wins and loses on Polymarket’s most contested prediction market bets, giving a tiny group of unappointed people outsized power over billions of dollars of wagers.

Over the past year, nearly 2,000 Polymarket financial contracts have been disputed and adjudicated by the company’s complicated third-party resolution mechanism — including bets on war, elections and geopolitical conflict. In April alone, 230 contracts that attracted more than $1 billion in trading ended up being decided through the process, up from 79 contracts six months earlier, according to a Bloomberg News analysis of blockchain records and past votes.

Under Polymarket’s rules, whenever the outcome of one of its financial contracts faces an official challenge, the dispute goes to a vote among holders of UMA, an independent cryptocurrency. In one recent case, UMA owners voted on how to resolve a contract tied to whether the US and Israel had struck Iranian facilities in February, with the odds bouncing around as traders tried to guess how the UMA holders would vote.

The process was designed to give bettors an open, crowd-sourced path to the truth — central to Polymarket’s identity as a decentralized “global truth machine.” It has, though, ended up concentrating power in the hands of whoever bought the most UMA tokens, even if they make decisions that defy logic and are motivated by pure economic self-interest, rather than any adherence to the real answer to the question being wagered on.

Just nine wallets accounted for roughly half of all UMA tokens that have voted on a Polymarket resolution over the past three years, the Bloomberg analysis found. That’s out of more than 6,400 accounts that have participated in at least one dispute. The nine wallets have essentially always voted together and for the winning position.

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The concentration of voting power has drawn blowback from a growing number of unhappy traders who say the system has given the biggest holders the ability to tip votes in ways that serve their own financial interests, even if it leaves others holding the bag.

“No serious investor will put money there as long as there’s no transparency regarding the resolution criteria,” said Jan Czarnocki, general counsel at prediction markets startup Elastics. Czarnocki lost money on an UMA dispute about US forces entering Iran earlier this year. “Here it’s just a discretionary use of power basically.”

A spokesperson for Polymarket said the company “is committed to setting the standard for market resolution in prediction markets, continually strengthening our infrastructure to deliver the transparency, reliability, and scale our users expect.”

Polymarket founder Shayne Coplan has acknowledged the shortcomings with the UMA process at a number of points in the past. The company and the team behind UMA, Risk Labs, said last year that they were working to improve or replace the process, Bloomberg reported at the time.

Since then, though, little has changed. Eigen Labs, which was working with Polymarket and Risk Labs on the update, said the project has been put “on pause.”

“The focus has been on market expansion from Polymarket’s end,” said Sreeram Kannan, Eigen Labs’ founder. “We haven’t actually been working on that for the last several months.”

Polymarket declined to answer questions about changes to the UMA process. Risk Labs did not respond to requests for comment.

The UMA controversies are the latest signs of Polymarket’s struggles to move away from its scrappy crypto roots as it grows and becomes more intertwined with the traditional financial system. The company has attracted investment from Intercontinental Exchange Inc. and hosted $9 billion in bets on its primary exchange last month. But it has struggled with technical problems, and fallen behind its main rival, Kalshi Inc., in trading volume.

When contracts on Kalshi are disputed, the company’s employees are the final authority on which side wins. That has drawn complaints from customers after unpopular outcomes, in part because of the lack of transparency around Kalshi’s decisions. On Polymarket, the company can step in and reverse decisions made by UMA voters, but it has rarely done so.

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Disputes have particularly wide ramifications on Polymarket because the exchange offers more bets on geopolitical events, and it has become a new and widely-cited source of forecasts and information on fast-developing situations. Bets tied to global conflicts have been the source of many recent disputes as traders try to see through the fog of war to figure out the specifics of what happened on the ground.

In the dispute over the alleged US and Israeli attacks on Iranian nuclear facilities in February, Polymarket traders argued over whether the first military strikes in Iran met the exact conditions laid out in the financial contract.

In UMA’s official Discord server, potential voters discussed news reports indicating that a targeted nuclear facility had been left unscathed, and satellite imagery suggesting the first known strike on a different building came after the month was over.

As often happens during these disputes, trading remained open as the deliberations went on, allowing people to put millions of dollars down in response to where the UMA debate seemed to be trending on the Discord server. Risk Labs has warned investors on UMA’s Discord that “some commenters may attempt to influence vote outcomes for their own profit.” In the end, there was far more trading after the voting process began, than before it.

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The nine biggest wallets were all involved in the vote and backed the winning side, as they almost always do. The similar voting patterns are, to some degree, a product of UMA’s design. The mechanism offers a financial reward to any voter who ends up on the winning side — and a penalty for those who lose — encouraging users to choose the position that appears most likely to carry the day. The Discord conversation often ends up being an exercise in people trying to figure out which way the biggest holders — the whales — are leaning.

The criticism of this process is reminiscent of more momentous controversies in the traditional financial world, where small groups of traders had the power to swing much bigger markets. Several global banks paid huge fines between 2012 and 2015, after it was discovered that traders had colluded to manipulate the benchmark London Interbank Offered Rate that influenced the cost of borrowing money around the world.

The stakes for Polymarket bettors are much smaller. Less than 1% of all contracts traded on the exchange have faced disputes that led to an UMA vote. But the frequency with which market outcomes are challenged is rising as trading continues to grow.

A number of smaller users have banded together to create a group called UMA.rocks, aimed at taking on the power of the biggest whales. But as UMA.rocks has gained more voting power, accounting for 8% of all votes last month, it has been accused of becoming a new kind of whale, and another part of the same problem. In an attempt to tackle that criticism, its founder recently overhauled the way users’ funds are automatically allocated to votes.

One of the most prominent prediction market traders, who goes by the screen name Domer, has been complaining about the problems with UMA for the last year. He recently wrote a social media post expressing frustration with UMA.rocks, but also with Polymarket, for not fixing the problem.

“We were assured that things would change,” he wrote. “Unfortunately nothing has changed, and it has gotten far, far, far worse.”

© 2026 Bloomberg

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