Polymarket's prediction market on whether Ukrainian President Volodymyr Zelenskyy would wear a suit before July concluded in turmoil after UMA's decentralized oracle reversed an initial "Yes" ruling to "No" despite widespread media evidence. The market attracted $237 million in trading volume, becoming one of Polymarket's most active bets this year.
The controversy centers on UMA's dispute resolution mechanism, where token holders vote on outcomes. Critics highlight that 95% of UMA tokens are held by large holders, creating centralization risks. Prominent trader RememberAmalek—who earned over $1 million on Polymarket—stated, "UMA's voting incentives encourage people to vote with the perceived majority to avoid penalties, not based on factual correctness," adding that this enables manipulation. He noted that whales holding millions of tokens can sway multi-million dollar outcomes, undermining decentralization.
On June 24, Zelenskyy wore an outfit described by BBC and New York Post as a suit during a NATO event. UMA's oracle rejected this evidence, citing lack of "consensus of credible reporting." This marks the second suit-related controversy involving Zelenskyy on Polymarket; a similar May dispute also ruled "No" despite expert analysis. Traders like Martin Shkreli labeled the process a "scam," threatening to escalate concerns to Polymarket's investors.
Amid the backlash, Polymarket is finalizing a $200 million funding round led by Peter Thiel's Founders Fund, valuing the platform at $1 billion. Despite U.S. restrictions and an FBI raid last year, it has surged to $700 million in active trading volume and partnered with Elon Musk's X for AI integrations.