Though it may appear otherwise from the outside, Polymarket doesn’t actually decide on the outcomes of its markets. Instead, they rely on UMA (Universal Market Access), an open-source project that describes itself as "a decentralized truth machine."[6] UMA resolves disputes through a manual voting process, with each staked UMA token conferring a single vote. However, a majority of these tokens are owned by just a few individuals, some of whom are known to participate in the markets and profit from their outcomes.

In order to reach consensus, tokenholders are encouraged to discuss markets publicly before voting. The insiders and so-called whales who control large portions of voting shares weigh in by signaling how they intend to vote. UMA’s voting system discourages disagreement and punishes users who vote against the majority by reducing their tokens. Predictably, many voters choose to mimic these whales rather than rely on their own judgment. The result is a system that perpetually rewards the elite and punishes dissent — all at the expense of Polymarket’s broader user base.

The recently covered Ukraine minerals deal resolution illustrates how this dynamic plays out in practice. A market asked whether a minerals deal would be agreed upon with Ukraine.[7] A well-known insider proposed the market resolve as "Yes" before any such deal had been agreed upon. During the voting process, Polymarket issued a clarification stating the answer was not "Yes." Despite this, a small group of whales voted in favor and in the final minutes, the market resolved as "Yes" — resulting in immense losses for retail users. Many users lost in excess of $10,000 and several took losses of over $100,000.