Polymarket shifts short-dated crypto contracts to TWAP after study flags likely settlement manipulation

Polymarket is replacing the single-price snapshot used to settle short-dated crypto up/down contracts with a time-weighted average price, or TWAP, after months of trader complaints and a study that identified 821 accounts whose activity was consistent with settlement manipulation. Researchers from Stanford University and Singapore Management University said those accounts made $8.2 million in settlement windows they classified as likely manipulated, while 93% of the losses in those windows, excluding market makers, fell on retail traders. Under the revised framework, five-minute markets will use a 30-second average and 15-minute and four-hour markets a 60-second average, with Chainlink Data Streams delivering the price data. Polymarket previously said the change would take effect on Aug. 7, 2026, at 00:00 UTC across Bitcoin, Ethereum, Solana, XRP, HYPE, BNB and Dogecoin, and it is offering $1 million in August liquidity rewards to support affected markets. The study, which reviewed roughly two months of five-minute bitcoin contracts, found unusually large Binance orders in the final seconds before settlement followed by rapid price reversals, though it did not prove intent or directly tie the spot-market trades to the same traders holding positions on Polymarket.

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