Strategy’s disclosure that it sold 32 bitcoin last week has complicated the resolution of a Polymarket pool that has drawn more than $20 million in trading volume.
The market asked whether Michael Saylor’s bitcoin treasury company Strategy would sell any of its bitcoin holdings before May 31, which traders could take binary “Yes” or “No” positions on.
On Monday, Strategy revealed in an SEC filing that it sold 32 BTC between May 26 and May 31 to help fund distributions on its preferred stock offerings. The company sold the bitcoin for approximately $2.5 million, marking its first reported bitcoin sale since December 2022.
The disclosure sparked confusion and debate among the pool’s traders.
Supporters of a “Yes” resolution point to Strategy’s filing, which explicitly states that the sales took place before the deadline.
Others say the information was not publicly available when the market closed, making a “No” resolution appropriate under the market’s rules.
“The market should have been closed on the specified date,” one trader wrote in the market comments section. “At the time of the market closure, the information was missing, so ‘No.'”
The market has already been resolved to “No” twice and challenged twice, and is currently in the final review stage.
Conflict resolution on Polymarket
Conflicts like this have been a recurring challenge for prediction market platforms and how they determine whether outcomes should be judged on when an event occurs versus when evidence of the event becomes publicly available.
If the dispute is escalated further, it could ultimately be reviewed through the resolution process used by Polymarket for contested markets, which in some cases involves holders of the UMA token voting on the outcome.
This is its own can of worms, however.
A recent Wall Street Journal analysis found that more than 60% of active UMA voters over the past year could be directly linked to Polymarket accounts, while at least one voter had a financial stake in the outcome in nearly one in five disputes reviewed by WSJ.
The report also found that voting power is highly concentrated, with more than half of the votes in most disputes coming from the ten largest wallets.
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