Polymarket, Kalshi, and other prediction markets have taken the world by storm and in the process seen massive support from the cryptocurrency industry.
Kalshi makes claims about “democratizing finance” while Polymarket proclaims that “using decentralized blockchain technology removes the need for a central authority in trading, which fosters fairness and open participation.”
Kalshi wasn’t originally built on a blockchain at all, however, it’s expanded into tokenized positions on Solana, claiming that “tokenization is the endgame. It is non-custodial, instant, and crypto native.”
However, that’s not how it currently functions; instead, it depends on Jupiter to “handle the off-chain actions required,” including to “open positions,” “manage positions,” and “claim winnings.”
Not exactly “non-custodial,” suggesting we’re a great distance from the “endgame.”
These prediction markets aren’t meant to be truly decentralized, unstoppable, or censorship-resistant like other crypto projects.
Instead, they maintain extraordinary control over the markets that are made available, sometimes even removing them before resolution.
Removing markets
Recently, Polymarket listed markets that resolved based on whether or not nuclear detonations occurred.
It then removed these markets following backlash from the community.
Critics felt that markets on nuclear detonation were Polymarket finding ways to profit from the possibility of history-defining calamities and destruction.
Unlike earlier attempts at prediction markets, such as Augur, Polymarket and Kalshi don’t allow any user to make a new market, instead entrusting that responsibility to the centralized actors that operate the platforms.
This is something that Polymarket is upfront with, noting in its help center that “markets are created by the markets team” and “users cannot directly create their own markets,” though it does comfort them with the notion that “they are encouraged to suggest ideas.”
Kalshi also tells users that it “love[s] community ideas for new markets.”
Interestingly, although both Polymarket and Kalshi maintain the ability to remove markets, that ability is much less advertised; it’s not mentioned in any of the “Markets” articles in Polymarket or Kalshi’s help centers.
Screenshot of search of Polymarket’s Help Center for ‘archived’Screenshot of X.com search of Polymarket’s posts for ‘archived’Read more: Polymarket ends trading loophole for bitcoin quants
The Polymarket page for the nuclear explosion market now proclaims that market has been “archived.”
A search for “archived” in the Polymarket help center returns zero results, as does a search on X for any Polymarket posts that include the word “archived.”
When a Polymarket event is archived, it’s also no longer possible to retrieve details about the event using the Polymarket API.
The Polymarket API is meant to return the token ID, which can be used to query the smart contract for additional details.
Users in the Polymarket Discord claim that after Polymarket removed this market, they could no longer see the bet in their portfolio, with one user asking, “What happened to my money?”
Anybody who asks questions is directed to pay attention to the “#market-updates” channel in Discord, where it eventually announced that losses would be refunded.
Polymarket and Kalshi market resolution
Polymarket’s terms of service note that “the company is not involved in nor responsible for the resolution of any contracts displayed on the platform.”
The resolution on Polymarket relies on UMA, a blockchain oracle that allows tokenholders to resolve disputes about various outcomes.
Kalshi, however, doesn’t maintain the same claim, openly noting that when you “request to settle market,” that request will then go to the “markets team,” who “will thoroughly review all the settlement requests.”
Both Polymarket’s oracle-based resolution and Kalshi’s resolution mechanisms have provoked a great deal of controversy among users.
In one Polymarket controversy an Ethereum user with the Ethereum Name Service name “BornTooLate.Eth” manipulated the outcome of a Ukraine-United States mineral deal-related market by becoming one of the largest holders of the UMA token. This highlighted the governance dangers centered around the market.
Polymarket was also drawn into controversy several months ago when it launched a market that was meant to resolve based on whether or not Ukrainian President Volodymyr Zelenskyy would wear a suit before July.
Zelenskyy arrived at the NATO meeting in a non-traditional suit, meant to emulate more militaristic aesthetics, due to the ongoing Russian invasion of Ukraine.
The market was originally proposed as resolving to “yes” and ended up resolving in favor of “no,” arguing that the suit he wore didn’t meet the intent of the market resolution, which read simply, “This market will resolve to “yes” if Volodymyr Zelenskyy is is photographed or videotaped wearing a suit between May 22 and June 30, 2025 ET.”
Even the “Polymarket Intel” account on X, which has a gold check mark and the Polymarket logo, which indicates that “it’s an affiliate of @Polymarket,” posted a video with the caption “President Zelenskyy in a suit last night.”
Polymarket would subsequently try to distance itself from this account. This dispute was handled by UMA tokenholders, but that’s not always how Polymarket deals with controversial market resolutions.
The platform had listed a market that was meant to answer whether or not the so-called Department of Government Efficiency would “cut $3 billion of DEI contracts before March.”
The resolution criteria for this market was whether or not “doge-tracker.com” showed more than the $3 billion in cuts.
However, despite the resolution criteria being met, Polymarket pulled the market and refunded losses, claiming that doge-tracker.com wasn’t reliable.
Thus, markets don’t always resolve according to their resolution criteria.
Both of these cases highlight the tension between stated resolution criteria and how users and oracles expect the market to resolve.
Kalshi has also seen its fair share of controversy around market resolution.
In one case, X user “0xTyrael” claimed that they had lost money on Kalshi, as it ruled that Trump didn’t say “Mamdani” in an interview where he mangled the pronunciation of the New York mayor’s name.
More recently a market about whether or not Ayatollah Ali Khamenei would be “out” as Iranian supreme leader resolved to “no” because the resolution criteria noted that if the leader “leaves solely because they have died, the associated market will resolve and the exchange will determine the payouts…based upon the last traded price (prior to the death).”
Read more: Odds swing wildly as Polymarket bets on Iran’s successor collapse
Despite this being included in the resolution criteria, many users felt cheated, again highlighting the tension between the resolution criteria as written and as understood.
All of these various issues highlight the difficulty of creating a way to consistently resolve markets, especially in cases where resolution criteria are poorly written.
Donald Trump Jr.
Both Polymarket and Kalshi are intimately tied to the Trump regime, as both platforms have added Donald Trump Jr. as an advisor.
Additionally, Trump Jr. invested in Polymarket via the venture capital firm where he is a partner, 1789 Capital.
Additionally, Trump Media, where Trump Jr. is a director, has announced that it will launch prediction markets in cooperation with Crypto.com.
All these prediction markets have benefitted from the Commodity and Futures Trading Commission being permissive in its regulatory oversight of prediction markets under the Trump administration, and some portion of those benefits financially accrue to the Trump family.
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Source: https://protos.com/are-polymarket-and-kalshi-decentralized/
