Crypto-based prediction site Polymarket is facing criticism after settling a prediction market asking whether “TikTok will be banned in the U.S. before May 2025,” which was settled to “Yes” on January 20, 2025, after the Supreme Court voted to keep the app in the country, even though former President Donald Trump issued a 75-day stay to further review the decision.
What Triggered the Backlash?
The prediction market traded $120 million, and everything rested on how one defined the word “ban.” Many argued that because access to TikTok did not cease, it was not really banned. Critics were even labeling Polymarket as a manipulator for changing the outcome, but its advocates say that the law actually technically went into effect on January 19, even though there was an extension.
Problems with Conflict Resolution
Polymarket utilizes UMA’s Optimistic Oracle (OO) to settle predictions, which further lead to escalations of disputes to UMA’s Data Verification Mechanism (DVM). In this incident, the DVM process was simply bypassed, creating much bias accusations. It’s not the first time Polymarket has faced controversy, either: earlier this year, user criticism followed similar disputes over Ethereum ETF and memecoin markets in 2024.
The recent Polymarket decision on the TikTok ban prediction has sparked unprecedented backlash, with a record-breaking 24,000 comments from frustrated users. Despite TikTok only suspending operations in anticipation of a ban—not being officially banned—Polymarket declared "Yes" pic.twitter.com/IcZ67yMd9q
— n23eo | (Ø,G) (@n23eo_n) January 27, 2025
What’s Going to Happen at Polymarket Next?
To beef up its operation and bring onboard tokens that can be used in validating results by users, the company is scouting for $50 million investment. The update promises to rebuild users’ trust with increased openness in the platform but whether it’ll be enough for the alleviation of the issue at hand of user worries remains to be seen.
This ban on TikTok is a wake-up call for clearer rules and more transparent dispute resolution in prediction markets. To users, it is a wake-up call to carefully consider platform policies before joining. How Polymarket addresses these issues will determine its future in the prediction market space.
