Polymarket Adjusts Short-Term Cryptocurrency Market Settlement Rules

Polymarket will replace the single price snapshot with a time-weighted average price for settling related contracts in the short-term cryptocurrency market. Previous research and complaints from traders have indicated widespread manipulation during the settlement phase. A study on 5-minute Bitcoin contracts found that some large Binance trades occurred in the final seconds before settlement and appeared to drive price movements; most losses in the potentially manipulated settlement window were borne by retail investors. The new system will utilize Chainlink Data Streams and short-term TWAP windows. This mechanism is similar to the protective measures of competing platform Kalshi, which relies on regulated price indices and moving averages to increase the difficulty and cost of short-term price distortions.

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