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Polymarket to use time-weighted prices to curb settlement manipulation

Polymarket is moving short-dated markets from single-price snapshots to TWAP settlement and is adding $1M in liquidity rewards through August for impacted markets.

Reported · Written up by our desk · Market Structure

Polymarket is changing how it resolves short-dated prediction markets, shifting from a single settlement snapshot to time-weighted average prices after research and trader complaints highlighted patterns consistent with settlement manipulation. According to CoinDesk, the update comes as analysts said artificial price pushes near settlement were becoming easier under the prior design.

CoinDesk reports that a study of five-minute bitcoin contracts found unusually large last-second Binance trades that appeared to move prices before settlement, followed by rapid reversals. The research cited hundreds of accounts whose activity it said aligned with manipulation, and it estimated that 821 accounts made $8.2 million in settlement windows it classified as likely manipulated.

Under the new system, Polymarket will use Chainlink Data Streams and short TWAP windows to make brief price distortions harder and costlier. CoinDesk says five-minute markets will use a 30-second average, while 15-minute and four-hour markets will use a 60-second average.

Polymarket said the changes are aimed at protecting integrity in its crypto up and down markets, CoinDesk reports. To support liquidity during the transition, it is adding $1M in liquidity rewards across impacted markets through the month of August.

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