A working paper says a small group nudged Binance’s spot price in the final seconds before settlement to decide which side of Polymarket’s five-minute bitcoin contracts paid out.
Posted July 16, 2026 at 3:34 pm EST.
A small group of traders may have pulled $8.2 million out of Polymarket’s popular bitcoin markets by nudging the spot price on Binance in the seconds before each bet settled, researchers at Stanford University and Singapore Management University suggest in a working paper published this week.
The paper examines Polymarket’s five-minute bitcoin up-or-down contract, a binary bet that pays out based on whether bitcoin is higher when a five-minute window closes than when it opened. The contract does not settle on Polymarket itself. It resolves against a Chainlink oracle that averages spot prices across major exchanges, which means whoever can move that reference price in the final moments can steer which side of the bet wins.
How the Push Works
The authors, David Dai and Ruizhe Jia of Stanford and Shihao Yu of SMU, found that Binance’s mid-price sits “about two and a half basis points from the oracle” resolution price. A trader buys the “up” side of a contract, then fires aggressive buy orders into Binance seconds before the window closes, and even a slight push can flip the outcome. In the final ten seconds before each close, net order flow on Binance jumped roughly 50% above the levels seen before the five-minute contract launched on Feb. 12, 2026. The price typically reverted within ten seconds, a sign the move carried no real information.
About 821 traders, about one in 300 of the roughly 243,000 who traded the contract, were identified as profiting in markets with the identified pattern. They “take $8.2 million in the pushed cycles while breaking even in the rest,” the researchers wrote in the paper. Meanwhile, retail participants bore 93% of the losses during manipulated cycles.
The authors’ main recommendation is to lengthen the settlement window, noting the manipulation signature is “much attenuated” in Polymarket’s 15-minute contracts.
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AI-assisted content: This article was produced with the assistance of AI tools and was reviewed, edited, and fact-checked by a member of the Unchained editorial team before publication.
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