UFC mistakenly judged the outcome of a fight! Polymarket traders somehow made a profit of over 100x by exploiting the timing gap

Polymarket sparked a bidding frenzy after a UFC broadcast misjudge, as traders took advantage of the information gap to buy the dip at a difference of 0.01 dollars; 676 dollars turned into 67,608 dollars.

According to the report, the prediction market Polymarket recently saw an incident in which an in-venue broadcast error during a UFC event led to extreme price volatility in the order book. A trader exploited the timing difference of information dissemination, buying contracts at low prices that the market mispriced, and achieved a 100x gain in less than ten minutes.

A wrong decision triggered volatility in the order book

Near the end of the UFC Fight Night bout between Marcin Tybura and Tyrell Fortune, the event organizer first announced Tybura as the winner. At that moment, the contract price for Tybura’s win was pushed up to $0.99, while the contract price for a bet on Fortune’s win quickly dropped to the minimum quote of $0.01 because the market believed he had lost. But a few minutes later, the organizer apologized and brought Fortuna back into the Octagon, correcting the official result so that Fortune won by unanimous decision.

Traders used the information timing gap to buy low-priced stakes

Within a few minutes from the broadcast error on-site being made to the organizer noticing it and correcting it, an information timing gap appeared between the real-world situation at the venue and the platform’s contract quotes. In this window, a trader seized the opportunity to buy contracts at $0.01 per share for a total cost of $676, before the market had responded to the information. When the result was corrected, the value of his position rose to $67,608, instantly achieving a 100x profit.

Image source: Polymarket

Investors suggest introducing a circuit breaker mechanism to manage risk

In light of the trading process in this incident, market participants began to examine the risk controls of existing trading mechanisms. Some community opinions noted that when prediction markets handle event result determinations (Market Resolution), they should consider establishing “circuit breaker” mechanisms similar to those in traditional financial markets to prevent comparable blunders from impacting verdicts. At present, decentralized prediction markets lack a buffer mechanism to deal with sudden human oversights. If investors only place bets based on probabilities, they may also suffer massive losses.

• This article was reprinted with authorization from: 《Chain News》
• Original title: 《UFC event misjudged the outcome; Polymarket traders profited 100x using a timing gap》
• Original author: Co2