Stanford Study Finds 821 Traders Extracted $8.2M From Polymarket Bitcoin Contracts in Final 10 Seconds

According to Stanford University and Singapore Management University researchers, 821 traders systematically exploited Polymarket's 5-minute bitcoin betting contracts, extracting $8.2 million through settlement manipulation between February and April 2026. The study found net order flow on Binance surged approximately 50% in the final 10 seconds before contract close, enabling traders to nudge prices and flip settlement outcomes. The behavior concentrated among just 0.3% of Polymarket's roughly 243,000 traders, while retail participants absorbed 93% of losses.

Researchers noted the manipulation signature was significantly reduced in Polymarket's 15-minute contracts, suggesting longer settlement windows mitigate the vulnerability. The paper recommends extending contract horizons as the primary fix. Neither Polymarket nor Chainlink has publicly responded to the findings.