Scandal engulfs Polymarket over Zelensky suit

Did Ukrainian President Volodomyr Zelensky wear a suit during his recent trip to the NATO summit?

Only $200 million in crypto is on the line.

The crypto-based prediction market Polymarket is being accused of manipulation from outraged users over the seemingly prosaic question of whether Zelensky wore a suit in Europe in late June, raising doubts over its ultimate goal of being an arbiter of truth.

How we got here

The controversy all started on May 22, when a market showed up on the platform with the prompt: “Will Zelensky wear a suit before July?” (Zelensky has famously stuck to military-style clothing while his country defends itself against Russia.)

According to Polymarket, the bet would resolve to “yes” if Zelensky was photographed or videotaped wearing a suit based on the “consensus of credible reporting,” and gamblers spent more than $200 million betting on the outcome.

Well, at the NATO conference in June—before the July deadline—Zelensky was seen in formal attire. But the question of whether it was technically a suit he was wearing sparked ferocious debate online, including from popular menswear poster Derek Guy, who called Zelenky’s outfit “both a suit and not a suit.”

While the market was initially resolved as “yes,” those who bet on “no” objected, escalating the disagreement to a third-party dispute resolution system known as UMA, which labels itself a “decentralized truth machine” that “can record any verifiable truth or data onto a blockchain.”

• Those who hold UMA protocol tokens can weigh in on disputes as supposedly unbiased observers.
• But because Polymarket trading volumes are so much bigger than UMA’s market capitalization, critics say UMA whales could be placing side bets to exploit their role in helping resolve Polymarket disputes—as has been alleged in the Zelensky suit debacle.

Big picture: We’re expecting a final decision from Polymarket on whether the Zelensky suit market will resolve to a “no” or a “yes” later today. As of this morning, “no” is seen as the far likelier outcome. But no matter which result is handed down, this episode has delivered a significant reputational hit to Polymarket, a platform that had been booming, and doubts are rising about its ability to verify “the truth” scale.—NF