A small group of nine anonymous crypto wallets now plays a major role in deciding outcomes on Polymarket’s biggest prediction markets, raising concerns over fairness and control in a system meant to be decentralized.
The finding comes from a latest Bloomberg report, showing how a concentrated set of UMA token holders repeatedly settles disputed contracts tied to billions in wagers.
The report reveals that about 2,000 Polymarket contracts had disputes during the year on issues related to election results, war outcomes, and other political events. Approximately 230 contracts valued over $1 billion were settled using UMA-based votes in the month of April. Even though the mechanism was developed for a wider audience, the findings proves that the control over this process has moved into the hands of a few key wallets.
Whale voting power shapes market outcomes
Polymarket relies on UMA token holders to resolve disputed contracts when outcomes remain unclear. In these cases, UMA voters decide how markets settle after real-world verification becomes difficult. In one example, voters debated whether the US and Israel struck Iranian facilities, while traders quickly adjusted positions based on expected voting direction.
Bloomberg analysis shows that just nine wallets control nearly half of all UMA voting power. These wallets sit among more than 6,400 participating accounts, yet they often vote together and frequently end up on the winning side. Consequently, critics argue the system has shifted power toward concentration instead of decentralization.
Jan Czarnocki of Elastics said, “No serious investor will put money there as long as there’s no transparency regarding the resolution criteria.” He also raised concerns about discretionary control in settlement outcomes. Additionally, traders warn that large holders can influence results that directly affect payouts and market trust.
Rising pressure on prediction market integrity
Polymarket says it continues to improve transparency and strengthen its market infrastructure. However, founder Shayne Coplan has previously acknowledged weaknesses in the platform’s dispute resolution system. Earlier efforts by Risk Labs and Eigen Labs aimed to upgrade the process, but those changes have largely stalled.
Trading often continues while disputes remain unresolved, allowing market participants to react to signals from ongoing voting activity. Hence, some traders now follow whale behavior instead of relying on fundamentals. Critics say this creates distorted incentives, especially in geopolitical markets where outcomes directly affect payouts and risk.
Prediction platforms have also been subject to increased regulatory oversight. The House Oversight Committee in the United States is conducting inquiries regarding potential risks for insider trading on Polymarket and Kalshi.
Moreover, Spain has temporarily blocked their use as the country assesses any regulatory issues. Consequently, the prediction market industry is experiencing increasing pressure around the world due to the growing interest in these markets.
Also Read: Trump Backs Prediction Markets As Family Holds Ties to Polymarket and Kalshi
