Stanford Study: Polymarket’s Bitcoin Bets Were Rigged in the Final 10 Seconds

Striking New Findings Emerge

Polymarket’s fastest bitcoin betting merchandise shows systematic signs of colony manipulation, according to a new study by David Dai and Ruizhe Jia of Stanford University’s Department of Management Science and Engineering and Shihao Yu of Singapore Management University’s Lee Kong Chian School of Business.

Image source: arxiv.org

The moving paper, titled “Settlement Manipulation successful Prediction Markets,” examined astir 16,000 five-minute bitcoin up-or-down contracts from their Feb. 12, 2026 motorboat done April. The contracts settee against a Chainlink oracle that aggregates spot prices from large exchanges, meaning whoever tin nudge the spot terms successful the last moments tin determine which broadside of the stake pays out.

Describing the profits, the authors wrote that manipulators “take $8.2 cardinal successful the pushed cycles portion breaking adjacent successful the rest.”

The mechanics are straightforward, i.e. a trader buys the “up” broadside of a five-minute contract, past fires assertive bargain orders into the Binance spot marketplace (the world’s largest crypto speech by volume) seconds earlier the betting model closes. Because the Binance mid-price sits, successful the researchers’ words, “about 2 and a fractional ground points from the oracle” solution price, adjacent a tiny propulsion tin flip the colony outcome.

A Recurring Pattern successful the Final 10 Seconds

The fingerprints amusement up successful the bid books due to the fact that aft the five-minute contracts launched, nett bid travel connected Binance successful the last 10 seconds earlier each adjacent jumped astir 50% supra pre-launch levels. The bursts were concentrated and directional, arriving precisely arsenic the betting windows expired.

The behaviour was uncommon but lucrative and lone 821 traders retired of astir 243,000 (or astir 1 successful 300) exhibited wide manipulation patterns. The costs, meanwhile, were not evenly shared, with 93% of the losses falling connected retail participants, who efficaciously served arsenic liquidity providers connected the losing broadside of pushed settlements.

A Longer Clock arsenic the Fix

The researchers observed that the manipulation signature is “much attenuated” successful Polymarket’s 15-minute bitcoin contracts, suggesting that a longer colony skyline makes the commercialized excessively costly to propulsion reliably. Their superior argumentation proposal is simply to lengthen the declaration horizon.

The findings onshore astatine a delicate infinitesimal for the prediction market industry, particularly since crypto-native terms betting has go 1 of its fastest-growing segments, with traders stacking more than $100 million connected bitcoin terms outcomes crossed Polymarket, Kalshi and Myriad successful caller months.

Polymarket, the largest level by volume, is meantime preparing a token airdrop planned for the 4th fourth of 2026, a motorboat that would enactment an adjacent brighter spotlight connected the integrity of its colony design.

Neither Polymarket nor Chainlink has publically responded to the paper’s findings, and the authors stopped abbreviated of alleging immoderate rule-breaking by the level itself. Whether the level adjusts that plan is present an unfastened question.