What are Dead-on-Arrival Markets?
This chapter explains what it means for a market to be dead-on-arrival (DOA) and why such markets violate the fundamental principles of prediction markets.
What Does Dead-on-Arrival Mean?
A dead-on-arrival market is one that's resolved the moment it is created because a qualifying event has already happened. There is nothing left to predict or trade on — the market is dead-on-arrival.
Why Can't Markets Be DOA?
Prediction markets can't be DOA for several reasons:
Prediction markets are forward looking
If the outcome is already decided, there is nothing to predict
DOA markets give anyone aware of the pre-creation event an unfair advantage, allowing them to trade with certainty and distort the market
What About Events Before Market Creation?
To avoid DOA situations, anything that happens before a market's creation does not count toward resolution. If an event happened even an hour before launch, it cannot be used to resolve the market. Only events after creation count.
Precedent examples:
Will Biden issue more pardons than Trump? — Polymarket clarified that pardons issued before market creation would not count. Including them would have meant the resolution criteria were already met when the market launched.
Next coin listed on Coinbase? (POPCAT, MOODENG, Pnut) — If MOODENG was listed minutes before market creation, it would be pulled from the options. POPCAT and Pnut would stay since the resolution criteria had not yet been satisfied.
In the past, many proposers did not check the market creation time and proposed referencing pre-creation events, which led to disputes. Polymarket has since updated its rules to show not just the deadline but also the market's start time so the timeframe for qualifying events is clear.
The Two Types of DOA Markets
DOA markets usually fall into two categories:
Single qualifying event There is only one event that could resolve the market. If it happened before market creation, it cannot happen again. Example: Supreme Court unblocks Alien Enemies Act? — If the Court already unblocked it before market creation, it cannot happen again.
Multiple qualifying events but reduced probability Another event could happen again, but if it already happened once, the chances drop significantly. Example: Earthquake 8.0 or above before September? — If one happened an hour before market creation, another is possible but much less likely.
The table below lists examples of both Type 1 and Type 2 DOA markets.
Nobel Peace Prize Winner 2025 If it was awarded, it cannot be awarded again.
Will Kanye launch a coin in 2025? If Kanye already launched one, another launch is possible but far less likely.
Will Coinbase's TBA app launch before October? If it launched before market creation, it cannot launch again.
Will Coinbase US perps offer more than 10x leverage? If leverage was already raised before creation, another raise is possible but less likely.
Will the Supreme Court overturn gay marriage in 2025? If it was overturned before market creation, it cannot be overturned again.
Obama in jail in 2025? If Obama was already jailed before creation, he could be jailed again but the odds drop sharply.
Market Title vs. Description
Sometimes market titles do not match the description. A description may be broader or narrower than the market title.
Example: Will Trump jail Elon Musk? — The rules specify Elon Musk serving time in jail, not Trump sending Elon to jail. Therefore, if the market launched after Elon had already begun a jail or prison sentence, it would not be DOA. Additionally, Trump could technically jail Elon multiple times. That said, it is still up to Polymarket's discretion whether to remove the market.
What About for the National Guard Market?
For Trump deploys National Guard in D.C. by August 31?, Polymarket's clarification effectively made it a Type 1 DOA. This was because they considered the Restoring Law and Order in the District of Columbia memo to be the qualifying event. The memo was released before the August 31 market was created. This meant the August 31 market resolved "Yes" on a past event — making the market dead-on-arrival.
But the Monday Market Isn't Dead-on-Arrival?
It is true that the second clarification could be used to resolve the Trump deploys National Guard in D.C. by Monday? market because it was within the market's timeframe. However, this creates several issues, including:
Polymarket creating the August 31 market after the memo was released signaled that they did not consider the memo a qualifying event. Otherwise, the August 31 market would be DOA.
If the Monday market resolved "Yes" based on the clarification while the August 31 market was DOA and could not resolve "Yes," there would be controversy. Additionally, Trump would more than likely not deploy the National Guard twice.
In addition, there were several concerns:
At the time of the August 31 market creation, "Yes" shares for the Monday market traded at 24¢.
Polymarket took seven hours after creation to clarify, without issuing a pre-clarification or signaling that they had any issue or would intervene.
They decided to clarify after the market deadline, which unnecessarily cost a proposer their $750 bond as someone was able to dispute it with certainty.
What Could Polymarket Have Done Instead?
If Polymarket wanted to issue a clarification that would not make the August 31 market dead-on-arrival, they would need to reference an event after the market's creation. For example, Polymarket could say the Department of Defense statement that stated "approximately 800 soldiers were activated today" was a qualifying deployment.
This would effectively resolve both the Monday and August 31 markets since the statement was made after both markets were launched. This does not address the broader issues of legitimacy with the clarification itself, but it would have avoided violating the dead-on-arrival principle.
Summary
Polymarket's handling of the National Guard markets created confusion and controversy. By launching the August 31 market after the memo's release, they implied that the memo was not a qualifying event. However, their second clarification for the Monday market treated the memo as qualifying, essentially overturning their own earlier position. This contradiction undermined consistency in resolution standards and left traders questioning the reliability of Polymarket's criteria.
Coming Up
Having seen how Polymarket's second clarification contradicted their earlier position, we now turn to criticisms of how it was handled.
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