Moving Forward

To move forward from this mistake, Polymarket can consider several solutions.

Tracking Clarifications

Betwick suggested Polymarket start tracking clarification metrics, including how often they clarify against the market price.

If a market is overwhelmingly in favor of one option but Polymarket clarifies in the opposite direction, it may reveal that the rules were unclear.

However, price action alone does not always reflect trader consensus. For example, in the Another successful Houthi attack on shipping in July? market, "Yes" shares were trading above 83¢ when Polymarket clarified against "Yes."

Zooming out, however, shows that shares had been below 20¢ for the week prior. The pump from 10¢ to over 80¢ was driven by a group of users arguing that an attack that began before the market was created would qualify. At market launch, shares were around 65¢, showing most traders did not believe the past event counted. The clarification did not overturn sentiment but instead shut down bad actors exploiting ambiguity.

The National Guard Market

By contrast, in the Trump deploys National Guard in D.C. by Monday? market, "Yes" shares had traded below 40¢ for most of its duration. Around the time of the memo, the price was near 25¢.

This suggests that tracking prices and sentiment over a longer period before issuing a clarification may be a more accurate measure. Issuing pre-clarifications earlier, when debate emerges, would also help. Without this, it can appear that the market has already decided that the event does not qualify.

Taking Accountability

Another step forward is for Polymarket to show accountability.

One option would be to offer refunds to users who lost money due to unclear or inconsistent clarifications.

Acknowledging when a clarification fell short would also help rebuild trust.

But accountability cannot stop there. There needs to be a process for preventing similar issues.

Increasing Transparency

A final step is for Polymarket to improve transparency around clarifications. This ties directly into taking accountability.

The clarification team does not explain their reasoning in detail, and it is unclear whether they fully consider all arguments. At minimum, clarifications should state why an event does not qualify. In one market, for example, Polymarket ruled against a drone being shot down without offering any reasoning, leaving users frustrated.

In the past two months Polymarket generally issued clear clarifications, but the National Guard clarification fell short.

Summary

To move forward, Polymarket can track clarification patterns, issue pre-clarifications earlier, increase accountability when clarifications fall short, and provide more transparency about their reasoning. Together, these steps would reduce controversy and build user confidence.

Coming Up

Having explored how Polymarket could move forward, we now turn to the most pressing issue: how Polymarket could develop an Oracle philosophy.