Polymarket Adds TWAP After Users Flag $7.6M Manipulation Losses

Traders on Polymarket's community forum calculated roughly $7.6 million in losses from such last-second manipulation, posts show. The same traders had flagged the vulnerability and requested TWAP-style protections for months before Polymarket publicly acknowledged the problem and committed to a fix.

TWAP averages the price across a defined window of time, making it more expensive to manipulate than a single last-second snapshot. Traditional finance has used the method for decades. Polymarket runs on the Polygon blockchain with USDC settlement and uses a hybrid central limit order book. The TWAP mechanism will serve as the resolution layer for short-duration contracts.

The delayed fix damaged trust among some active traders. Critics have pointed to the gap between user reports and the platform's response as a factor in market share losses to competitors that moved faster on user feedback. A $4 billion cumulative volume on 5-minute contracts is not a struggling product. Momentum and trust are separate things. The manipulation problem was eroding the latter even as volume numbers looked strong.