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BTC New research suggests manipulation of Polymarket five-minute bitcoin contracts
A new study points out that traders may be manipulating a five-minute bitcoin contract on the Polymarket platform to influence the outcome of their bets. Researchers at Stanford University and Singapore Management University said they observed approximately 16,000 five-minute bitcoin contracts on Polymarket for two months and found signs that traders might manipulate the spot price of Binance.
Theresearch paper pointed out: "In the last few seconds before settlement, Binance spot order flow surged, causing price fluctuations, which quickly recovered after settlement. Obviously, this is a temporary push up to manipulate spot prices and is not an information-based transaction."
Research points out Binance's responsibility for Polymarket manipulation
Polymarket uses the Chainlink oracle in its five-minute contract, which takes the average bitcoin price on major spot exchanges. However, researchers said that considering Binance's trading volume, its price is "economically very close" to the oracle's pricing. The central parity of Binance is highly consistent with the oracle price, so that "pushing the central parity of Binance a few basis points higher than the execution price is enough to reliably determine the contract outcome." The study also pointed out that in 85% of cases, the final settlement direction of the contract is consistent with the direction of the Binance price.
The study believes that other trading platforms offering similar contracts may face the same risks, not just Polymarket, because of the way such bets are settled. One of the paper's authors said: "These contracts have structural loopholes. They are based on prices that traders can change by trading the underlying asset itself."
Polymarket responds to bet manipulation concerns
In response to this finding, a Polymarket spokesperson said that the platform plans to change the settlement method in some markets to use prices over a longer period of time in the next year rather than prices at a single point in time. Polymarket has previously attracted attention over manipulation issues. A study last year showed that 25% of Polymarket's trading activity over the past three years was artificial and conducted through laundering transactions.
In March 2026, Polymarket tightened its market integrity rules to cover its U.S. exchanges and DeFi platforms, which are regulated by the U.S. Commodity Futures Trading Commission. The new rules involve the company's market design standards, settlement standards and data source requirements.
