Polymarket is changing how it settles contracts tied to short-term crypto markets, replacing a single price snapshot with a time-weighted average price, or TWAP. The move follows research and trader complaints that pointed to widespread manipulation around the platform’s settlement process.
One study covering 5-minute Bitcoin contracts found that some large Binance trades arrived in the final seconds before settlement and appeared to move prices. In settlement windows that were considered potentially manipulable, most losses were borne by retail traders, according to the report cited in the source material.
Under the new setup, Polymarket will use Chainlink Data Streams together with a short-duration TWAP window. The approach is described as similar to protections used by rival platform Kalshi, which relies on regulated price indexes and moving averages to make short-term price distortions harder and more expensive. CoinDesk was cited as the source for the report.
Polymarket changes settlement rules for short-term crypto markets
Polymarket will replace single price snapshots with a time-weighted average price for settling contracts tied to short-term cryptocurrency markets, according to Odaily, citing CoinDesk.
The change comes after research and trader complaints said the platform’s settlement process showed widespread manipulation.
Study focused on 5-minute Bitcoin contracts
A study of 5-minute Bitcoin contracts found that some large Binance trades appeared in the final seconds before settlement and seemed to push prices. In settlement windows seen as potentially manipulable, most of the losses were borne by retail traders.
Chainlink Data Streams to be used in the new system
The new system will use Chainlink Data Streams and a short TWAP window. The mechanism is similar to safeguards used by competing platform Kalshi, which relies on regulated price indexes and moving averages to raise the difficulty and cost of short-term price distortion.
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